AH+-+Econ+Cycle

To what extent does the economic history of the United States represent the natural cycle of economics (boom/bust)?

Definition of boom and bust:a period of economic prosperity followed by a depression or recession. Why does this occur? During a period of economic prosperity, consumers and are spending a lot of money and producers are producing large amounts of products or services. From most evidence from history, the sudden bust is due to consumer greed and not enough of the product or service to be created or distributed. Therefore, the once prosperous economy falls rapidly.

The economic history of the United States fully represents the natural cycle of economics (boom and bust):


 * The 1920s was a decade of prosperity-the boom in the natural economic cycle
 * It was followed by a stock market crash on October 24th, 1929 called Black Tuesday which was caused by a combination of debt and lost stocks
 * The Great Depression lasted from 1929-1941-the bust in the natural business cycle. $30 billion lost in the stock market.
 * Increased deficit spending, the trickle down theory, Keynesian economics and a Monetary policy ended the Great Depression
 * an era of prosperity followed in the late 1940s and 1950s
 * There was another recession in the 1960s
 * There was a period of stagflation in the 1970s (stagflation is when workers are payed the same amount of money yet prices in the market increase)
 * The economy was stagnant in the 1980s
 * There was an era of prosperity in the 1990s
 * Currently, there is a recession