[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...