There are still some economists who fear another crash. The latest is Eugene Steuerle of the Urban Institute, a liberal think tank in Washington. In a new article, he warns that the economy may be on the edge of a giant "wealth bubble" that will collapse with possibly-dire consequences.
Steuerle is especially worried by parallels between Americans' present wealth — stocks, homes and private businesses — and the overvaluations of 2000 (the "tech bubble") and of 2007 (the "housing bubble"). Suffering was widespread. In the 2007-2009 Great Recession, monthly unemployment peaked at 10 percent.
To test his theory, Steuerle compared U.S. household net worth (what people own minus all they owe) to the economy's annual output, gross domestic product. Since 1950, the ratio has mostly remained 4-to-1 or less. Americans' assets, from homes to stocks, grew roughly in tandem with the overall economy.