Uh no, being the only industrial nation of any consequence to survive WW2 unscathed, and making our currency the de facto world currency, set that stage. Once the rest of the world caught back up in the early 1970s, the boom was over. The rest has been, more or less, either stagflation or a huge debt bubble.

Steve asks in lieu of the bubbles, what kind of economy we would have created. At least with respect to the internet bubble, I’m not sure we’d have done much differently.

It’s hard to say. The massive amount of funds flowing into the stock market have been partially caused by low interest rates. Not only does more money flow out in debt, but less money flows into savings accounts, since the returns turned so pitiful. Trying to stay ahead, and boosted by favorable tax policies, we turned into a nation of speculators instead of savers.

In a large sense, though, nothing can stop the death of America’s middle class. Technology continues to make workers obsolete. Many Americans, myself included, no longer do anything useful but shuffle papers to follow this or that directive. Globalization means you can replace an American worker for someone costing a tenth, even lower. Bad government policies haven’t helped, to be sure, but the brute force of technology and 6 billion more workers calls the tune.

What would the economy have been like without the tremendous amount of malinvestment that went on during the dot com and housing booms?

All of that money was spent on everything from computer mice to warehouses to everything in between and created loads of jobs

In 1998 we added over 250k jobs a month which was not even eclipsed in 2005 during the peak of the housing boom.

We shall see what the answer is to these questions shortly because a simple analysis of the unemployment numbers show that we would have to add 200+ jobs a month for years on end just to bring the jobless rate down and without a dot com boom or a housing bubble or the necessary credit expansion to facilitate such an expansion it wont happen…

This is just simple but hard factual mathematics and cannot be disputed.

There will be no recovery and the answer to the guys question will be forthcoming over the next decade.

It wont be pretty

AndyC