Wow, how profound: "The business cycle is not driven by the 70% of GDP. It is driven by a narrow slice within that 70% that most commentary never isolates." The Austrian Business Cycle has been eloquently refined.
Austrian Business Cycle - Why are there constant “booms & busts”?
“When the government and its central bank encourages the expansion of bank credit, it not only causes price inflation, but it also causes increasing malinvestments, specifically unsound investments in capital goods and underproduction of consumer goods. Hence, the government-induced inflationary boom not only injures consumers by raising prices and the cost of living, but also distorts production, and creates unsound investments. The government is then faced repeatedly with two basic choices: either stop its monetary and bank credit inflation, which then will necessarily be followed by a recession which serves to liquidate the unsound investments and return to a genuinely free-market structure of investment and production; or: continue inflating until a runaway inflation totally destroys the currency and brings about social and economic chaos.” Murray N. Rothbard
FYI: I copied and pasted your link and asked ChatGPT to read and comment. Here is what she said:
"Recent macroeconomic analysis emphasizes that the U.S. economy is heavily dependent on consumer spending, which comprises roughly 70% of GDP. However, this consumption is increasingly supported not by real income growth, but by credit expansion and asset price appreciation. As liquidity conditions expand, asset values rise, generating a wealth effect that sustains consumer demand. Conversely, when credit conditions tighten, asset prices fall, and consumption contracts—revealing the underlying fragility of the system. This dynamic confirms that modern economic growth is not anchored in production, but in financial conditions. When viewed through a thermodynamic lens, this represents a fundamental distortion: consumption has been decoupled from the energy and material throughput that ultimately sustain it." [OpenAI/ChatGPT for the preferred account of Carl L. McWilliams]
Wow, how profound: "The business cycle is not driven by the 70% of GDP. It is driven by a narrow slice within that 70% that most commentary never isolates." The Austrian Business Cycle has been eloquently refined.
Austrian Business Cycle - Why are there constant “booms & busts”?
“When the government and its central bank encourages the expansion of bank credit, it not only causes price inflation, but it also causes increasing malinvestments, specifically unsound investments in capital goods and underproduction of consumer goods. Hence, the government-induced inflationary boom not only injures consumers by raising prices and the cost of living, but also distorts production, and creates unsound investments. The government is then faced repeatedly with two basic choices: either stop its monetary and bank credit inflation, which then will necessarily be followed by a recession which serves to liquidate the unsound investments and return to a genuinely free-market structure of investment and production; or: continue inflating until a runaway inflation totally destroys the currency and brings about social and economic chaos.” Murray N. Rothbard
FYI: I copied and pasted your link and asked ChatGPT to read and comment. Here is what she said:
"Recent macroeconomic analysis emphasizes that the U.S. economy is heavily dependent on consumer spending, which comprises roughly 70% of GDP. However, this consumption is increasingly supported not by real income growth, but by credit expansion and asset price appreciation. As liquidity conditions expand, asset values rise, generating a wealth effect that sustains consumer demand. Conversely, when credit conditions tighten, asset prices fall, and consumption contracts—revealing the underlying fragility of the system. This dynamic confirms that modern economic growth is not anchored in production, but in financial conditions. When viewed through a thermodynamic lens, this represents a fundamental distortion: consumption has been decoupled from the energy and material throughput that ultimately sustain it." [OpenAI/ChatGPT for the preferred account of Carl L. McWilliams]