The Bubble in Real Life

Artificially lower interest rates cause future spending to happen now – that's the boom. But there's a limit to how long they can keep forcing the future into the present – it creates a big gap at some point, and that's the bust. What the politicians call "stimulating the economy" always amounts to nothing more than accelerating future economic growth to the present, creating a current boom and a future bust. And of course, things in the economy as a whole move slowly, so these economic cycles are longer than our election cycles. That's why the politicians have an incentive to do it.

When they force future spending into the present, it's absolutely inevitable that there will be a bust at some point. That's what we see here.

It's a microcosm of the bubble.

Myron Weber explains the boom and bust so that we regular folks can understand it and, as you probably guessed, government involvement was a prime factor.