The key issue is that as economic upturns mature over the course of decades, they lose momentum in real terms over the later half of the cycle, they lose dynamism, they therefore have lower real economic growth over the course of time during the later part of the cycle (even though the stock market is going up then, and in our case, even staying up during the very late part of the cycle that we have been having due to the enforcement of the law against recessions). This means that an economic downturn is inevitable eventually.
The Kondratieff wave proves this - and the details of that are described on this website. But the Keynesian economists don't like it one bit - because they are totally focused on just avoiding downturns. The Austrian economists take it in stride and simply note that recessions are actually good for the economy in the long run (this website explains why - in the context of the Kondratieff wave theory) and that the recessions should be allowed to run their course as quickly as possible and that the society and the system will be better off for it in the long run if one does that.
I will note that there is one caveat to the statement that I just made above about the Austrian economists that has to be taken into account that is stated at the link "A comment on Austrian economics" on this website. That caveat is based on what is apparently being taught in modern times at a few American universities as Austrian economics. My statement above is based on the perspective of the original Austrian economists, the names of several of which are listed at the link "Austrian economics resources" on this website.
The basic concept, that as economic upturns mature over the course of decades, they lose momentum in real terms over the later half of the cycle, they lose dynamism, they therefore have lower real economic growth over the course of time during the later part of the cycle (even though the stock market is going up or staying up), is actually playing itself out in reality in a very obvious way lately, but the Keynesians just do not want to accept it. Their idea is that if if recovery and growth are not happening nearly as strongly or quickly as they would like it to, just push harder so it will happen anyway.
Why are we not getting much stronger growth with the much stronger pushing?
Because our deficits are so high. They are much higher than deficits of past times.
And that is the reason why even the growth we are getting is not real. It is being driven by massive deficit spending. Growth in such times cannot be compared to growth during times of much lower deficits. The growth during times of much lower deficits is much more real. Unfortunately if one wants to register growth during the tail end of the cycle increasingly large deficits that are huge over the years though sometimes lower are inevitable.
Unfortunately, the economy is no longer capable of strong private growth for a relatively long period of time. The following trend description makes this clear.
The economic upturn of the early 1990's was substantially weaker than that of the early 1980's and the economic upturn of the early 2000's was substantially weaker yet - and the economic upturn since 2009 is the definitely weakest yet.
See a pattern?
The Kondratieff wave explains why this is the case (modified by the law against recessions, which extended the current wave). Basically, by trying to extend prosperity in the current Kondratieff wave, the authorities have ensured that every subsequent recovery that has still happened during the current wave was substantially weaker than the previous one.
And the economic up times after the recoveries have also been consecutively weaker (as documented along the way by Forbes magazine, among others) - the boom of the 1980's (after the recession of the early 1980's) in terms of GDP growth was quite substantially lower in real terms than that of the 1960's (the 1970's were the stagnation phase of the current Kondratieff wave anyway), the boom of the 1990's (after the recession of the early 1990's) in terms of GDP growth was quite substantially lower in real terms than that of the 1980's (despite a booming stock market), and the growth of GDP in the 2000's (after the recovery of the early 2000's) was quite substantially lower in real terms than even in the 1990's and was held above zero only by increasingly massive federal government deficit spending over the years.
See a pattern?
This is no coincidence - but the Keynesian economists just do not want to see it, nor accept it, because they are totally focused just on avoiding recessions. The Kondratieff wave (modified by the law against recessions, which extended the current wave) explains it.
Years ago, in the early 2000's, the Fed chairman at the time, Greenspan, explained away the weaker upturns in more recent times until then by asserting that since the downturns were milder than in the past, the upturns coming out of those downturns were inevitably going to be milder, too - but since I had accepted the Kondratieff wave in the meantime, I already knew that if the authorities were going to try to continue to push the system, the recoveries were going to be weaker than the ones before anyway, that is to say, each subsequent recovery would be weaker than the previous one. In other words, in a law against recessions environment, we really had two separate phenomena going on, the authorities trying to keep the economy from going down on the one hand - ever-more-successfully-so for the time being at the time - and the implications of the Kondratieff wave ensuring that each subsequent upturn would be that much more mild, more weak, because the economy was slowly losing dynamism in real terms.
If the reasoning of the authorities had been correct (i.e., things had been consistent), then the recovery coming out of the latest downturn (2008) should have been a very vigorous one, i.e., like the ones coming out of the previous major downturns that Greenspan was comparing to - but it isn't, it is the weakest one of all. That is entirely consistent with what one should expect based on my model - and since the first big downturn happened right when my model said it should and was as severe as my model said it should be, I think one should take note and prepare for the rest of what my model says is coming.
One other comment in that regard - some people say that since the downturn of 2008 was driven by a financial crisis, and downturns in the past that have been driven by a financial crisis have also had a slow recovery, we should not be surprised that the recovery coming out of the downturn of 2008 is a slow one. I say why should one be surprised that a financial crisis happened, given how far the system had been pushed before? Only a Keynesian would think one could get away with it - an Austrian economist would not think so at all. And, for that matter, the law against recessions did, in fact, expire in 2000 - it was only the decision of the authorities in the system at that time to continue to enforce the law against recessions that caused the law against recessions to continue to be enforced, the law itself did not even require that. As I note right near the beginning of this website, on that basis, I knew that we were headed for a big crisis sometime between 2007-2010. Given the severity of what I was predicting, the most likely candidate was a financial crisis - one big enough to overwhelm the Fed. So simply saying that it is no wonder that this recovery is so slow because the downturn was driven by a financial crisis does, in my opinion, not capture the full extent of what was going on.
It should be noted that with regard to record deficit spending, we also had record deficits during the Reagan years in the 1980's - and the economy did quite well by most people's view then and in the 1990's. So why not this time, too? Because in the 1980's, the economy was doing well, but the big deficits were a threat to future prosperity - this time, the big deficits are being used to hold the economy up in the first place at all. In other words, in the 1980's, the economy was holding up on its own - this time, the deficits are being used to prop up the economy in the first place.