Is it inevitable that the economy goes through a cycle of crashes and bubbles?

People have short memories i

I think it’s inevitable with how we run business and politics, and the American culture. Always pushing for huge profits, talking about the economy often in a dishonest way, and Americans have short memories as said by another jelly above, and we like a quick buck. Perfect storm for highs and lows. We have some safeguards in there, but not enough to prevent at least some sort of roller coaster.

The standard business cycle used to be 54 months. I learned that in the 70s and it was a consistent time frame dating back a hundred years, including the Depression. (I know the Depression lasted a lot longer, but the cycle still held up to some extent throughout the thirties.)

The Fed has gotten a lot better at moderating the swings, and lengthening growth periods, so it isn’t as awful as it used to be.

The business cycle is much different from bubble periods like the dot com boom/bust, and the real estate bubble. The real estate bubble was caused by fraudulent behavior; that can be hard to avoid.

The current bubble really only applies to crypto currencies and cannabis, but there are three major things to be concerned about:

1. A difficult Brexit disrupting European markets would spread to the US.
2. The GOP tax cuts coupled with increased defense spending is adding huge debt with little benefit.
3. Increased barriers to trade are already disrupting agriculture and manufacturing.

All three of those issues are easily avoidable, but not at all popular to address by the Administration.

It seems inevitable. Economists throughout the years have tried to keep it under control, but some greedy I-think-I-know-a-better-ways guys always get it there and muck it up for the rest of us.
If you want to learn more, watch “Economics USA” on PBS.

Absolutely as long as the government tries to “plan” the economy with money supply and interest rate manipulation.
When rates are kept low, and/or money is printed, it gives Entrepreneurs the sense that there is “savings” available for investment. Normally, investment would mean decreased consumption, since there would be less money. But if printed money is in high supply, and cheap, people will try to both consume and invest, until the truth that there is no real “savings” to continue capital growth projects and consumption is realized. Then a bust occurs, and consumption and investment stops while real “savings” build up, and prices get so low that people start spending again.
Then, because it is politically popular, the government begins the process of centrally “planning the economy, thus creating the illusion of good times, and guaranteeing the next bust.

It is an inevitability of capitalism.

Of course it is, that’s just how this shit works, always has done all around the world.

And FYI there is nothing inherent in capitalism that guarantees a boom bust cycle. It happens when central banks print money and artificially set interest rates. They do it to be popular. And everybody wants to be popular.

I also think there is a primal need for humans to have something to look forward to. We act like we want everything to be peaceful and perfect all the time, but that would give us nothing to hope for, nothing to strive toward. That’s why “end times” talk is so popular, why we’re always starting wars, why our presidencies are basically just flip-flops without much new happening, and why the economy needs to have boom-bust cycles. But that’s just my theory…

We are talking about an economic system and philosophy, that is driven by short term profits, quarterly reports and mandated perpetual growth in a universe with finite resources.
It is not enough to be profitable this year and have the same profit next year. No. Next year’s profit must be even higher, and so forth, and so forth.
This system forces those in charge to take unjustified risks, and at the same time, undermine its own customer base, by gimping the wages and salaries of its workers, blind to the macroscopic effects this has, because they only care about their own plate.
It is a flimsy, yet ballooning house of cards, built on a foundation of ever increasing, un-backed debt, that is just destined to one day collapse in on itself.
So yeah, it is inherent.

Can any economy just keep growing and growing year after year? I don’t think so and history says it can never happen.

I think economies are cyclic. Cost of living goes up and up until it can no longer be supported by the wages and then things come back down. Depending on how exaggerated the climb is will dictate how precipitous the crash will be. The 2008 housing crisis was actually exacerbated by governmental attempts at boosting the housing market. People were getting home loans that had no business getting them…they couldn’t realistically afford them. But incentives were there for the banks to loan regardless of income. When they loans started failing, the market got flooded by repo’d houses. It was the efforts of man to try artificially boost part of the market that made the crash that much worse.