What is wrong with a sizzling hot smoking hot economy?

Question

I know we had a serfiously smoking sizzling hot economy under Bill Clinton and despite his troubles with his oersonal life he allowed that a lot of people had work that paid well. The nation was doing great and the economy was smoking. However I have heard that having tyhe economy so hot was a bad thing. Why is this?

Answer 1

There is nothing wrong with an economy that is growing quickly, as long as prices remain low. Generally the concern about an economy growing too fast is due to a concern that the economy is growing faster than it should. An economy can only grow as fast as how productive we are, so there are limits as to how fast an economy can grow. If it grows faster than it should, it leads to price inflation, which is obviously a bad thing.

The economy during the 90s grew quickly which was a good thing, but near the end of the decade prices began to rise quickly. This was because worker productivity wasn't increasing as fast as people were trying to push the economy; producitivity was starting to lose some of its steam. So that's probably what those people were referring to, the fact that the economy was growing too fast at the END of the decade when producitivity was not matching the growth speed.

Answer 2

I am not going to comment on the Clinton years, but a super hot economy is usually associated with inflation.

I live in Western Canada and oil and construction are leading an economic boom. It means labour is in shortage. Wages go up, but that means the labour shortage just shift more to things like fast food restaurant. The labour shortage attracts more people so there is a housing shortage. That means housing and renting costs skyrocket. With construction doing so great, if you want to fix up your house you better be a do it yourself type. The wait list for home renovations is huge because of construction demands.

Answer 3

I think that's a referral to the web boon of the late 90's. There's nothing wrong with a hot economy, it's a lot better than what we've dealt with the last 6 years!

Answer 4

The tax cuts are purely one piece of the puzzle. the U. S. government does not administration the economic gadget. The fed reserve performs a greater robust roll. I too have 5 youngsters and make the main of the greater advantageous tax breaks, however the marriage penalty continues to be there. as quickly as I have been given a divorce, I had the choice to report joint or separate. We filed separate to maintain a number of 1000's of greenbacks. i detect it exciting that maximum individuals think of that they have not benefited from the "tax rebate" thinking that they could get a separate verify back from the government. they do no longer even understand that they pay much less each and every 365 days.

Answer 5

The reason that we have an hot economy could be that goods are decreasing so their prices are going down

Answer 6

people will get burned by being zealous and trying to get rich quick

Answer 7

Does not alleviate, it should.