The economy is in the dumper because...
1. A lot of people out of government said "there is gold in them thar Internet stocks" and they bought them in huge numbers. Internet stock growth fueled the economy from the mid 90's right up until people realized that these stocks had no real value in 2000 or so. Even though just about every stock analyst repeatedly observed "You know... these companies are valued in the millions but they really have no worth", people continued to chase those Internet IPOs. Also, computer technology stocks soared as well because no one ever thought that people might wake up one day and say "Gee... I have more than enough computing power here, why do I need to upgrade?"
When people realized that all of these thousands of Internet stocks were nothing but thin air, a large segment of the economy evaporated as thousands and thousands of people lost their savings, investments, etc. Also, lots of governments who were counting on high tax revenues lost out when the taxes didn't materialize.
2. Changes in the accounting codes allowed auditors to have a vested interest in the companies they audited. The result... Enron, MCI, etc., etc., etc.
3. The attacks on 9/11 has resulted in some well justified expenditures for fighting terrorists overseas and billions of wasted dollars looking for terrorists back here.
Combine all three of these things and you have higher deficits, bankruptcies, lost tax revenues, etc.
