Warren Buffett likes Cherry Coke. He plays bridge. He lives in Omaha. He is amiable and quick with a wisecrack. He has a folksy, friendly, humble demeanor. And $62 billion.

Yes, the unassuming white-haired man munching fries in the bleacher next to you at the minor-league Omaha Royals ball game was Forbes’s richest man in the world last year.

Buffett was born in Omaha, Nebraska. He got a paper route, went to college, got married, had three children, and began the world’s greatest career in investing. He slowly built up capital by buying stocks in companies that: a) he understood, and b) were worth less than the companies’ intrinsic value.

He got it right.

Since 1965, his investments have earned an over 400,000 percent rate of return. If you invested $10,000 with him in 1965, as some did, by 2008 you would have had $51 million. Shares in his company were worth $19 apiece in 1965. Today, each is worth $82,000.

When he became the most valuable man in the world, Buffett was worth more than the productive capacities of many small countries. But he still lives off his modest annual salary of only $100,000. He still works out of his hometown in a high-school-principal-size office, and he still lives in the same Happy Hollow home he bought for $31,500 when he was 28. He thinks the rich should pay more taxes, and others should pay less. In 2006, after his wife Susie died, he gifted more than half the shares in his company to charity. Valued at $37 billion, it was the largest donation in history.

When Mr. Buffett talks, people listen. Especially now that the economic system he gets so right is going so dreadfully wrong.

A week ago, Buffett said that the nation came days, perhaps hours away from economic destruction last September, the result of people getting greedy on housing. Everyone wanted to buy homeowner debt because home prices did nothing but swell. Then the bubble burst. The jobless figures, heading for double digits, tell the story.

“It’s fallen off a cliff,” he said, “and not only has the economy slowed down a lot, people have really changed their behavior like nothing I’ve ever seen. … When people get scared, they change their buying habits. When they quit buying as much, people lay off. We are in a very, very vicious negative feedback cycle.” Since 2008, that cycle has decreased his net worth by billions.

Warren Buffett is a businessman, an investor and a realist. He knows and admits that the American economy is in a crisis of rare magnitude.

About these things, like so many of his stock picks, Warren Buffett is right.

But Buffett is also a classic, old-school American optimist. “[Unemployment] is probably going to go a fair amount higher, but on the other hand, five years from now I can guarantee you the machine will be running fine—but I’d like to get there a lot faster than five years. And we can,” he said.

Mr. Buffett pointed to the example of the Dow Jones industrial average over the past hundred years.

[A]t the start of … the last century, 1900, it was at 66. So it’s gone up 100 for one. And we had the Great Depression, two world wars, the flu epidemic, the nuclear bomb, the Cold War. I mean, you name it. At least 15 years in that 100 years looked terrible, and five or six of them looked, you know, almost disastrous. And in the end, this system works extremely well. It doesn’t work well every day or every week or every month … but it will work. I will guarantee you that the Dow will be a lot higher.

Terry from San Antonio e-mailed Mr. Buffett with a simple, sincere, concerned question: “Will everything be all right?”

Everything will be all right. We do have the greatest economic machine that man has ever created, I believe. We started with 4 million people back in 1790 and look where we’ve come. And it wasn’t because we were smarter than other people, it wasn’t because our land was more fertile or we had more minerals or our climate was more favorable. We had a system that worked. It unleashed the human potential. … [W]e have a system, largely free market, rule of law, equality of opportunity, all of those things that cause the potential of humans to get unleashed, and we’re far from done.

Mr. Buffett says that the poisonous taproot of the current crisis, housing, is fixable. “… I would say that, you know, you can work your way out of it in a couple of years, probably, two to three years,” he said, adding later that the banking system will largely cure itself and that “This country will work fine, even if we screw it up.”

“You know, we’re gummed up at the moment, but this is the place to be. And this is the right time. I mean, I wish I was 21 now instead of 78.” With 65 years of business experience, Mr. Buffett believes “the best days of America really do lie ahead.”

About these things, Warren Buffett is wrong.

Today’s American economy is nowhere near the worst-case scenario toward which it is plunging. It’s about to get a lot worse. The system probably is the best economic machine ever. And it is irreparably broken.

Mr. Buffett believes in the system. He has seen it work for decades. He has been so right about it that he has made billions in it. He knows his stuff—better than any of us. So how can you rain doom down on the charitable, ukulele-playing, buy-American charm-billionaire? How can you fault his hearty optimism? Because it’s not the system that made America the single greatest nation to ever exist.

It came from God’s blessings.

Abraham Lincoln said America’s economic system was indeed fueled by more fertile land, more minerals, a more favorable climate and the “choicest blessings of heaven.” But take away God’s promises and blessings, and you are left with nothing. From these shakily leveraged heights, we are looking straight down into the foundations and beams of our economy: debt bolted to dishonesty nailed to greed covered with selfishness. Our economy is not a machine made of figures and mathematical equations. It is made out of people. And those people have forgotten God, as Lincoln said. We are carnal, ungrateful, unwise, impatient and intrinsically selfish. Rule of law and free-market principles are no match for human nature.

So do not put your faith in the system. Do not trust human selfishness writ large. The best system man can make is about to crash completely.

But that is good news!

Mr. Buffett and many others believe the American economic machine will clatter its way back into working order again. But nobody believes it is perfect, that it can control excesses, protect the poor or guarantee fairness for literally every individual. Mr. Buffett has pointed out many such failings himself.

But the fall of this flawed economic system is leading to a new one! That system will give every person a wide margin for success and earning honest wealth. Unlike carnal capitalism or communism, it will treat each individual with fairness and truly unlock the human potential!

Imagine it. A system based on laws of honesty, unselfishness, gratefulness, giving, sharing, contributing to society and being rewarded for hard work. No one extorts another’s work to make himself rich. No one gets rich doing nothing. Hard work is rewarded. Think of tiny debt. Think stable currencies. Think almost-universal individual land and property ownership. Think of economies built on productivity, not spending. Think of living standards triple or quadruple what middle-class Americans enjoy—for the whole world. Think of sending the government only 10 percent. Think of zero federal waste. Think of affordable universal health care. All hard-working families have large incomes, not only for plenteous food, good houses and quality clothes, but also for traveling, educating themselves, and reaching out to help others.

This economy is not the American economy. But it lies just ahead. And that is the place to be.