What is happening now on the global economy had to be long awaited. The way we were improving our life was a "glass left on the beach". Not that living better, increasing our life standards has any problem - it is quite the opposite, really! But the way we have been doing it over the past decades is probably questionable.
There is nothing wrong is living better! But we should primarily do it by incorporating in our living patterns our own productivity rise, or the expected product that we will achieve through our life (and that is a mechanism of credit leveraging, that has a natural, but usually assumed risk). In the last few years (especially in the last decade), we have seen a strong surge in consumption, that was possible through debt leveraging - but one that was not only considering our own productivity, but the product of the future generations. Not that it would happen directly for a short term consumption (like a LCD TV screen or even a car)! No! What one would do was to buy a house, counting on its appreciation, that was supported by a general feeling and urge to buy - that's the market working full scale. But at one point, houses were not being bought in one's family actual income, but on what one (and the market) would believe it would value in the long run - hence, what one would believe future generations would be willing to give to buy it. If we really think about it, on the limit, one would be pricing the house at an infinite price.
But we know our planet lives on finit resources - is one of the basics pillards of the economic theory. We had real warnings on this issue - but only a few were able to relate the "ecological footprint" to its economic consequences. When you say that if everyone would consume like the US, then you would need 3 Earths, what you say, is that available resources aren't enough to withstand that consumption pattern! Of course, not everyone in the World is living like a western citizen - but the point is that the global economy was already consuming above its generational fairshare, above the share of resources it should to allow for its safe and sustainable replenishment (if you have any doubts, please, think about one of the pillards of our economy, our number one energy source, oil). Basically, we were (and we are) consuming part of the resources that should be used by our children, and our children children.
Another way to see it, usually more 'economy wise', is when you measure debt burdens on families. From 2001 to 2004, the debt burden of a tipical middle income American family rose 33.1%. 33.1% in 3 years! Such a growth increase was to incurred to support (not short term luxuries, as one should expect) but to cover for heavier borrowing in house investment. By 2004, american families were facing a 108.4% debt/income relation - the first time in the US (at least in modern times) that debt would exceed income. That meant the american family spent more than 18% of their income in servicing debt... (data from a "Center for American Progress" report, written by Christian E. Weller in... 2006). The same happened in Portugal and throughout the rest of the western economies. When we let debt climb to become such a burden, what we are doing is conditioning the future generations choices and living standards, by compromising nowadays the share of resources that should be theirs on their own time.
What we are seeing nowadays is a strong market correction. We have leveraged our living standard in the expected earnings of future generations - we are now stoping our irrational growth, and dropping it to more rocksolid nowadays production. And, as always has been, that is called a recession.
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