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  1. Hey Tom,

    Thanks again for your great work explaining this stuff to me, a mere engineer. Please bear with me as I play liberal troll by asking, “Let’s say that the increase in receipts during the last years of Clinton’s presidency were due to the dot-com bubble rising, which wasn’t real wealth being created. Could you say the same about 2007 receipts, but this time due to the housing bubble? That is to say that the Bush economy wasn’t really creating wealth, but instead just rising on an artificial housing bubble.”

    I look forward to your setting this thinking straight.

    Thanks!

    Comment by GW — December 5, 2012 @ 9:36 am

  2. #1, thanks for the nice words. There is some validity to both premises.

    The crying shame is that in both instances it didn’t have to work out that way. Clinton’s SEC looked the other way while dot-coms who never had a realistic plan to sell anything went public with inflated valuations, while the housing bubble was fueled by explosive subprime lending (and deception of the ratings agencies) by Freddie Mac and Fannie Mae. Both prosperities were sustainable, and both ended up not being so because of government failures.

    Comment by Tom — December 5, 2012 @ 10:12 am

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