[taylodl]

The GOP can't force interest rate cuts unless they eliminate the Federal Reserve, and if they do that we're straight back to the boom/bust cycles of the late 19th century - which doesn't help the economy. Since we know tax cuts for millionaires and billionaires does not lead to economic growth and only serves to increase federal deficits, the policies the GOP favors lead to interest rates increases. Like I said, we just got their last round shenanigans under the previous Trump administration under control.

[temporarely]

We have definitely experienced "boom bust cycles" since the creation of the Federal Reserve. The very first such bust was called the Great Depression.

[taylodl]

We have not. Look at the economic history of the latter half of the 19th century in the US. We haven't experienced those levels and frequency of market swings since the creation of the Federal Reserve. Also, the Great Depression was a world-wide event. That was our first clue that isolationist policy was misguided.

[techostritch]

I have a question maybe you know, are boom and bust cycles good for the economy long term? Or is it too extreme to be useful,

Like my understanding of risk in financial markets is that (though of course a security could go bust) a high risk security is one that has bigger swings, but that those bigger swings lead to bigger long term gains.

I guess even if things go bust if you’re let’s call it morally flexible, boom cycles give you a better chance of making your millions.

[verdverm]

1929 is an example where the boom-bust was extreme, leading to a lot of pain for a lot of people. The 2008-9 was less extreme and Covid (economically) may have been more extreme, but also short lived and we never had the recession that was widely predicted. It may be that we overreacted on the handouts and put too much money into the economy and now we are dealing with elevated inflation, though that is mostly gone now and we are slightly above historical averages.

I would not use the stocks as an analogy, most people don't have them, which in itself say something about our economy. There will always be an amount of turnover in the economy, going out of business / layoffs, new companies and hiring. Having a steady rate, within some margin of error, is an aspirational goal for economists / fed, but there will always be shocks...

The current issue to me is big changes or swings in policy. Presidents come in and reverse everything, Congress is incapable of passing incremental change, with the current session seemingly unable to pass just about anything...