We keep hearing people make comparisons between this recovery and those of the past as if it's apples-to-apples. For example, comparing job growth today to job growth after the 2008-2009 Panic. All in an effort to make the case that government spending creates economic growth.

But there is nothing normal about the current economy. The things our government leaders have done in the past year are unprecedented. As a result, using normal economic words and phrases to explain things makes no sense – these things have never happened before.



Normal economic downturns are called "recessions." Growth phases are called "recoveries." And the combination of these ups and downs a "business cycle."

This has not been a normal business cycle. The contraction in the economy last year was not a normal recession, and the return of growth in the past year has not been a normal recovery. Comparing to the economic recoveries after the Panic of 2008, or Volcker's tight money of the early 1980s, makes little sense. In fact, trying to compare the current rebound to historical events minimizes the pain that COVID-related and government-mandated economic shutdowns have caused.

At the same time, giving credit to government spending for creating the current "recovery" is simply not true. Yes, when government borrows money from the Fed (which the Fed creates out of thin air) – or borrows money from future taxpayers – and gives that money directly to people, spending goes up. But that is not a real (or sustainable) recovery. To use the Fed's favorite term, it's transitory.

Countries across the globe shut down major parts of their economies and kept people from working. This caused major economic disruptions with supply chains, and put businesses and services that weren't labeled "essential" under undue stress. Not to mention the displacement of tens of millions of workers.