My "Hybrid Economic System" is the next logical choice.
You start with a socialist base: Some things need to be done ALL THE TIME & are good for ALL the people.
So, infrastructure repair & construction, ignored for so long, becomes an economic CONSTANT.
Also, in the interest of giving people a hand up, everyone in poverty, or who has 'slipped through the cracks in the system' gets food, clothing, shelter, education & health care.
"Whatsoever you do unto the least of these my brethren, you do unto me."
THEN, you put your re-regulated capitalist economy on top of that: if anyone wants more, they get off their butts and EARN it!
The 2 systems working together cancel out each others negatives.
There is no stagnation under socialism, because capitalism is there to provide incentive.
And, the fluctuations under capitalism are mitigated by the constant level of activity under the socialist base.
ex: X lives in a barracks style facility. He lives in one large room with 80-100 others. He has a locker and half a bunk bed. He has a roof over his head, but he wants more.
He wants his own place. He gets educated in something he enjoys doing, gets a job doing it, and gets a 1 bedroom apartment. He is on his way up.
[Feel free to forward this to the Occupy Movement.]
[CONSERVATIVES: YOU should love this, it turns tax burdens into taxpayers!]
Note: I started with 2 premises:
There must be incentive and
Capitalism fluctuates too much & can be cruel.
Then, I used logic, compassion, a pinch of electronics & Maslow's Hierarchy of Needs to create a new system.