Economy is not an exact science. It never was. Applied Mathematicians have built elegant theories and models. Forecasting has become a vast industry. Although it was not too hard to see that there is an economic crisis in the making the oracles of financial industry and economy, all but few, failed to see it coming. The ones who did see, failed to communicate the depth of crisis, if they ever appreciated the enormity of the disaster. For a very long time, many predicted a gargantuan disaster in coming, this was not what they foresaw. Many people thought that the US government financial obligations will not be met in the future and this is going to be the genesis of a catastrophe. However as long as US economy was growing at a respectable pace, the government seemed to have no problem servicing its debt. The problem happened when US economy started to slow down, in the late months of 2007 and the full scale of the crisis became clear at the end of 2008.
The world's capacity for producing goods and services has long surpassed the real needs of the world's affluent population, the ones who have the money to pay for those goods and services. The World's richest countries stubbornly refused to invest in the development of the poor countries, worse, These countries headed by US, went to extraordinary lengths to prevent any improvement in the living standards and working conditions of the world's poor. The need for keeping economic growth apace, was satisfied for a long time by inducing the customers to borrow. Massive domestic and global debt was accrued, especially in US.
As Americans spent, the world came to rely on US customers, having denied the poor economic growth and development, there was no other market vast and voracious enough to be able to consume the goods and products produced in Japan, China, India, and some other countries.
The stock market bubble of 2000 imploded causing all the liquidity to be moved to housing and real estate as a safe haven. Banks got into action and created a vast new industry based on pushing US population to borrow more money. With the burst of housing bubble, people were left unable to borrow money.
Borrowing was the cash cow, the gift that kept giving for years, when borrowing stopped, people stopped buying. When people stopped buying the economy of consumption by the world's affluent stopped working. Companies raced to the bottom and started laying off their workers, shooting themselves in the foot. Some of the companies that were laying off workers had cash and could borrow, in the traditional myopia of corporate culture, they decided that laying off workers is a better way to raise money and make a profit.
For decades the world's richest countries refused to raise the level of salaries paid, in US salaries and wages have been stagnating for decades.
If you are not a real participant in the economy, if your role is to work to produce the goods and spend your salary in consuming what you have produced, you don't matter. The chieftains of industry became handsomely wealthy. Now that we can no longer spend, they would simply take their money and run.
The Industrial revolution and relentless inflation of bank notes and currencies along with the rise of Public Relation and advertising industry has completely undermined the supply and demand rules of the economy. For a very long time, the Market economy has been unable to function by naturally matching real supplies and real demands.
The chickens have come to roost.
Have a nice day.