[qooleot]

Are you sure COVID-19 didn't partially prick a systemic issue that was hard to see on the rise (as many also missed the housing crisis before the fall)? For example, the amount the stock rise was attributed to stock buybacks in an unsustainable manner caused by late stage government policies (tax cuts, low rates). There has been some pretty extreme levels of corporate debt that correlates with this.

[wahern]

It probably did prick a bubble. But all the economic recovery measures for the pandemic may, ironically, push further out the point at which the systemic issues break the market and force resolution. Especially in the U.S., economic aid invariably ends up contributing far more to corporate balance sheets than it does citizens' wallets. I mean, what was the first response of the GOP to prospective economic issues? Cut taxes, including payroll taxes, which could have dealt a death blow to Social Security and Medicare considering how many Republicans are itching to get rid of those programs entirely.

Once COVID-19 passes I would expect more of the same. For reasons that aren't entirely understood, inflationary effects of monetary stimulus are highly attenuated, at least for the average consumer, although they clearly contribute to the ever increasing wealth of top earners, not to mention financial assets. Who knows how long we can keep going down this road.

[raincom]

'inflationary' effects are manifested elsewhere: inflated financial assets (say, stocks); inflated real estate wherever top earners live.

[mntmoss]

In crashes all the vulnerabilities tend to collapse at once like a house of cards, and in a sense we have learned things one crash at a time. When gold was the primary form of money, there were many crashes because of lack of control over money supply. Likewise with fiat, all the crashes from indebted governments trying to print their way out and inducing hyperinflation.

In the 1929 crash there was a run on the banks because there was no confidence in their survival. The world going to a wartime economy and increasing public spending reinvigorated things but it eventually caused high inflation in the US by the 1960's - one of those factors in the country's "1970 turning" in many policies. Fear of the balance sheet getting out of control again created the strategy of huge bailouts in the latter part of the 20th century, but a downside of doing it just through lending is the "crowding out" of those actors who aren't given bailouts - which in prior recent crashes were generally individual workers, homeowners and retail investors who just took it on the chin and were told to lower their expectations.

This time is different. The attention is on individuals and their problems, and I'm seeing an uptick in discussion of UBI and benefits beyond the existing trend. There isn't faith in this crisis being solved through the existing toolset.

[microcolonel]

You don't get to bundle criticism of a basic income tax reduction with these other economic policies, just because there's a crisis.