Just like fires destroy, they also clean - and economic downturns do similar things, thinning out the companies that have no excuse continuing and strengthening the remainder.
Since economic policy is now dedicated to keeping the companies going vs keeping everyone housed and fed, those companies can survive the downturn and end up "too big to fail".
There's also perhaps something to be said about more and more of the "economy" being optional spending of various sorts.
That is complete nonsense. Permanent money is always in disequilibrium, by avoiding interventions that result in temporary equilibrium you basically just get stuck with opportunity costs. You should rather question why we have modelled money to be permanently in disequilibrium so that it constantly requires interventions to keep it alive until its inevitable collapse. Permanent money is guaranteed to collapse because of its structural disregard of the real economy so the best you can do is keep it alive as much as possible, liquidationism just shortens the lifespan of your permanent money system.
Isn't it quite ironic that permanent money systems don't last very long? It is particularly amusing that everyone thinks that permanent money collapses because of government meddling when it collapses on its own just fine. The best part is that people keep repeating the permanent money experiment over and over again over the last two thousand years and they all reached the same conclusion: it doesn't work in the end but we will do it again
Isn't it ironic that money that abandons permanence can essentially last forever?
What? We know what the root issue is very well, it is liquidity preference. People prefer money over goods and services.
For the US, I find this hard to believe. How can it be a liquidity preference when a majority of Americans live paycheck to paycheck? Unless, we are counting corporations as "people" in this context. Then perhaps, I would agree.
Frankly I don't think the groundwork has been done to really figure out what the root issue is here. There are so many candidates - the handouts, the years of government-shutting-down-the-economy through COVID, the financial crisis that was looming in late 2019 that got obscured by the pandemic, a possibly peak-oil related energy crisis, war in the wake of all the other problems. But there are a lot of political shenanigans in the banking sector to keep the status-quo, and the status quo was shown to be "incompetents are in charge" in around 2008. So it is unlikely that they are up the the challenges that the world is facing.