2008Crash

Quora Answer : Would it be accurate to argue that humanity got itself out of a major economic depression (in the late 2000s) only temporarily and by burying itself in debt?

Mar 28, 2019

That would be a reasonable take.

It got itself out of the major economic depression by printing lots of extra money to stimulate the economy. (Technically "quantitative easing")

It avoided that huge amount of extra money causing inflation, by making sure most of it went directly into the pockets of the financial sector and rich people who didn't use it to push up prices of everyday goods and services, but used it to prop up and expand their own wealth.

So basically the rich got bailed out. And some poor people lost their homes.

The economy is probably going back into recession soon, because of normal oscillations. And there are few resources left to do anything about it. We can't do more QE. Or lower interest rates much. Trump has given away most of his tax cuts already.

Maybe, if we're lucky, we'll recognise that the only option left is the massive public works projects that we should have done last time.

Quora Answer : Economics: Why was the dotcom crash not followed with a recession on the level of the late-2000s crash?

Jul 7, 2015

The dotcom crash was a stock-market crash. The people who lost money in the dotcom crash were

a) professional tech investors
b) members of the public who'd bought into the hype

The 2008 crash was a collapse of a housing bubble and the people who were hurt were banks. (Seriously hurt because their complex system of opaque financial instruments left them blind, unable to work out how much money they'd lost and how much they had left.)

Banks have a hell of a lot more political clout than the losers in 2000. And were able to persuade the governments of the world that their pain would freeze up the global economy entirely. (This might even have been true.)

So the governments saved the banks and nationalized their debts.

Then the same economics geniuses who'd told politicians that the banking system was effectively "self-regulating" then managed to convince everyone that the governments' new-found debts weren't the result of them absorbing the costs of a crashed global finance system, but the result of reckless public pending in the years prior to the crash.

These people called for austerity (ie. a sudden drop in government spending), which chilled the economy and drove it into a recession.

tl;dr : governments didn't bail out shareholders of pets.com.