First of all, the entire basis of your argument does not hold water, since the economy is much, more complex than that. With all the advanced trading systems, market type and human influences, inflation/deflation, supply/demand, among so many other things, I would tend to think the economy is much more than just the stuff we have in our country. If nobody wants all your books cars food houses streets lightbulbs lumber etc etc etc then they don't contribute to your tradeable wealth, maybe your personal comfort and productivity, but whatever.
One very good example of how an economy can crash is by making money, ironically. If your supply of dollars goes up, demand will go down, since they're not worth as much. That's inflation. Should our government ever decide to try to print their way out of a deficit, like our Current Account deficit, and try to sneak it past the world through some shady Hedge Fund trading, well you better believe that's going to catch up to us.
Another way an economy can crash is if a previously cheap, essential good goes up in price, like how energy prices have doubled. Now the price of this good affects the price of just about everything. This can have a very complex reaction in a country's economy. Or let's say another country like China or Korea starts making all the same things we do, well now you got a lot more supply, so demand for our stuff goes down, jobs are lost and all the spending power that came with them.
Let's say really low interest rates and expanded credit make it easy for people to buy homes. Loan officers and mortgage brokers are just looking to make their buck, so they use a little creative thinking and come up with really crappy mortgages, like 50-year or interest-only, that broke and ghetto people snatch up because they want a house damn it. They can afford to commute to work from the suburbs and heat this home because energy is cheap and the dollar is strong.
But all that money printing and trillion dollar debt and competitiveness overseas is really fueling inflation, and crap energy costs just doubled last year! Well these people with crappy jobs are hurting, and got to foreclose
Or maybe they lost their job because they worked for Ford or any of
the many companies doing layoffs. Mortgage companies can afford to buy homes from the home-builders only because of Fannie Mae and Freddie Mac, two
semi-governmental institutions, that buy the mortgage from the company itself and thus the company is able to continue doing business. They're only
semi because they only get like a 20 billion dollar bailout from the government if they go insolvent, which is nothing compared to the trillions that
they still owe and depend on all these on-time payments to stay afloat. These two institutions are already groaning under the waves of foreclosures that went up 13% in december alone, and uh-oh, all their accounting fraud isn't enough to hide it anymore, and they implode. Oh crap, now all the derivatives so many major banks are holding cause them to sink with Fannie and Freddie, and you know how Americans will act when they can't get their money out of banks. Don't worry, they're federally insured right? HAHAHAH, the account that insures you is only so big, in fact, you'll be lucky to get a penny to the dollar! Realistically you won't get a dime, as the rich and connected will be allowed to withdraw their savings first, I'm sure.
So it's SELL SELL SELL time. Everyone starts going broke, the biggest consumer in the world can't consume anymore, so those factories in China selling us cars, clothes, and knickknacks got to close, you got tons of PO Chinese rioting and whatever you get the picture.
So you see how an economy is a delicate, inter-woven object? A crash in one sector of the market can cause a crash in so many others these days, because everyone's always buying derivatives or whatnot. You can say energy, free trade, corrupt officials printing money, and this soon to be collapsing climate are our dust bowls. The dustbowl shouldn't have happened anyways, stupid farmers seeding rain clouds with salt.
