And so it goes until the next downward cycle. There is also a long-term economic downturn in the United States from deindustrialization due to capital flight. Companies flee overseas or down south, say, to Mexico, attracted by the cheap labor and capital available, and also the lack of safety and environmental regulation on business. Neither the Republicans nor Democrats addressed overproduction or capital flight. They talk about taxation policies as being solutions.
Lower taxes do temporarily stimulate business activity by injecting money into the economy.
This also causes budget deficits. When deficits get to be too big, they are a drag on the economy. Too much of investors' money is attracted into government bonds that might have gone into businesses. There are several objections to this by those who recognize the need for basic social and economic change. First, governments do not necessarily behave any better than private owners.