No, Ido not refer to champagne.  I mean economic “bubbles” and  I say such “bubbles” are good for the economy.  Heresy you say, these were the causes of our recent economic catastrophes, the “Dot.Com Bubble” of the 1990’s and the “Housing Bubble” of the first decade of this new century.  We were going “too fast” and borrowing too much.  Investments did not reflect real income potential. 

Trust the American people and their economic gurus to, when the economy is steaming along at full tilt, always draw back in horror saying it is growing too large, too fast.  But look at the basic elements.  The “bubbles” were fueled with lots of cheap, easy credit, in the form of mortgages for the homes or stock issues for the dot.coms.  And the money was there,  it did not come from the ether but from the “wealthy.”  And the money was used to finance construction in one case and build new companies in the other, which in turn meant more jobs.  Thus available funds were used productively. 

Both “bubbles’ burst when the American people and their economic gurus decided that the “bubble” had reached  the breaking point, regardless of whether there was evidence of this.  It was sentiment, not facts that determined the breaking point.  And as soon as confidence was lost the “bubbles” did burst.  Self-fulfilling prophecies. 

As any good economist will tell you, the fortunes of an economy depend  on trust and confidence.  Lose this and you lose momentum and thus growth.   So one can easily tell when “happy time are here again” and that is when trust and confidence are restored.