The current tax cut increases the national debt during a good economy. So this irresponsibility limits America’s options when this bubble (if it exists) bursts.
This time is not different
Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region).
The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years.
The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.
Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.
I'm not sure the dot-com boom and bust affected the rest of the economy nearly as much as it affected our industry. If there was a recession, it was the smallest in decades:
https://tradingeconomics.com/united-states/gdp-growth-annual
It was a modest recession, but it wiped out a huge amount of wealth held by "main street" investors. It was bad enough that Bush, a very, very pro-business president, signed into law the Sarbanes-Oxley Act, which is widely criticized as an onerous and needless regulation by conservatives.
Bush inherited a guaranteed recession, and then 9/11 occurred on top of that context.
Which then led the Fed to make stupid mistakes on interest rates, which helped spur immense asset inflation in the real estate sector, which then collapsed, which led to the great recession, which got Obama elected with a Dem super majority to go with it, which delivered the ACA.
Then the Fed lowered interest rates to basically zero, or below zero when QE is considered, for the better part of a decade to combat the great recession, which spurred / enabled extreme corporate debt binging, extreme government debt binging, and re-inflated both the stock market and real estate asset bubbles. The debasement of the dollar due to the Fed's abusive interest rate policies during the ~2001-2004 period also dramatically spiked both healthcare costs and college costs, while eroding US purchasing power and the US standard of living (represented by the simultaneous global skyrocketing of GDP in all other nations, as well as being represented in the epic commodity bubble (commodities are mostly priced in dollars)).
Now we're waiting for the fallout from another round of idiotic Fed policies.
All in the name of initially trying to avoid or skate around a rather mild recession in the GW Bush first term - because no politician can tolerate a recession these days - the assholes at the Fed delivered more than a decade of immense suffering with more to come.
However in 2008-2009 the Fed policy was actually extremely tight. The recession of 2008 can not be explained by the monetary policy of 2001-2006. It simply does not add up. And even people who argue for the Austrian Theory (i.e. unsustainable investment boom in long term investments).
If monetary policy was to easy, then there is simply no way to explain nominal income. How can you explain this with 'Fed was to easy':
https://oregoneconomicanalysis.files.wordpress.com/2011/10/n...
The people who developed the Austrian cycle theory actually called this 'secondary deflation'. A static central bank policy can be inflationary or deflationary depending on the outside of the economy. Or more technically the stance on monetary policy depends on the Fed target rate relative to the natural rate.
What happened in 2008 is that the natural rate fell bellow the Fed rate and Fed policy became deflationary. They did not notice this because they observed false signals from high oil prices, you can read that in the documents from their late 2008 meeting. In the middle of a NGDP collapse they were talking about high inflation expectation, pretty insane.
The story of successive Fed created bubbles simply does not hold up.
The fact that the US has enjoyed a economic boom post 2008, while the rest of the world struggled for several more years (especially Europe), can be considered evidence that it was the correct action to take at the time. The current expansion is the second longest in modern history.
(And it’s useful to go back in 2008-2011 and see what different economists were saying about stimulus and inflation. There was a big partisan divide.)