A lot of the excess we've seen in tech post 2008 is a result of zero-interest rate policy (ZIRP). After the 2008 financial crisis, the Federal Reserve engaged in quantitative easing (QE) and monetary policy which lowered the Federal Funds Rate by quite a significant margin. Because interest rates were near-zero, hundreds of billions flowed into angel investments (i.e., tech). The cost of financing was dang near free. This allowed Big Tech players to hire aggressively. At the same time, it allowed for a plethora of new startups to enter the market. Therefore, there was a boom in the number of SWE & AE jobs, etc. Now, with sky-high inflation, interest rates have gone up precipitously. This has led to massive carnage on a biblical scale against a lot of tech firms who benefited from cheap financing. These same companies are essentially now being told: "Hey pal, the party's over. Get profitable or else!" Darwinian capitalism enter stage right. This is why we've seen such a large drawdown in the job market. Ironically, at least for the tech market, the high interest rates seem to have harmed tech even more so than COVID (at least after the initial panic of the first 3 months). (Obviously, that was not true for other industries like travel, etc.) However, it doesn't seem like we can lower rates again any time soon, does it? The US National Debt is standing at $32 trillion, and spiraling upwards, it's likely that inflation may be persistent for a while. If so, the Federal Reserve will be loathe to lower rates. Moreover, I haven't heard any politician in the US put forth a comprehensive plan to pay off the national debt over any course of time. [As a matter of fact, I was (and perhaps still am?) considering running for Mayor of a major American City, because the US deserves better! However, I don't think I can financially afford it at this time. But maybe next cycle.] So the question is: where do we go from here? Is the high-national-debt + high-rate + high-inflation environment going to be a long-term detriment to the growth of SaaS & tech? Or is this a short-term cyclical hurdle where "this too shall pass"?

Me, a keyboard economist, struggle to believe there will be an upcoming prolonged recession. Unless one considers the recent uptick in GDP as dead cat bounce, it appears that we might experience a brief economic downturn, but I'm skeptical it will endure beyond a two-year span.

I keep thinking how history repeats itself and how it's 20s again and how there was 1929 crash. Then again we're all just people and someone always profits.

Eh. Been through 2001 and 2008. Keep working hard.

Dow is near all time high. I think jpow got us a soft landing.

AchillesOfAdTech

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Where do we go from here?

A lot of the excess we've seen in tech post 2008 is a result of zero-interest rate policy (ZIRP).
After the 2008 financial crisis, the Federal Reserve engaged in quantitative easing (QE) and monetary policy which lowered the Federal Funds Rate by quite a significant margin.
Because interest rates were near-zero, hundreds of billions flowed into angel investments (i.e., tech). The cost of financing was dang near free.
This allowed Big Tech players to hire aggressively. At the same time, it allowed for a plethora of new startups to enter the market. Therefore, there was a boom in the number of SWE & AE jobs, etc.
Now, with sky-high inflation, interest rates have gone up precipitously. This has led to massive carnage on a biblical scale against a lot of tech firms who benefited from cheap financing. These same companies are essentially now being told: "Hey pal, the party's over. Get profitable or else!" Darwinian capitalism enter stage right. This is why we've seen such a large drawdown in the job market. Ironically, at least for the tech market, the high interest rates seem to have harmed tech even more so than COVID (at least after the initial panic of the first 3 months). (Obviously, that was not true for other industries like travel, etc.)
However, it doesn't seem like we can lower rates again any time soon, does it? The US National Debt is standing at $32 trillion, and spiraling upwards, it's likely that inflation may be persistent for a while. If so, the Federal Reserve will be loathe to lower rates.
Moreover, I haven't heard any politician in the US put forth a comprehensive plan to pay off the national debt over any course of time.
[As a matter of fact, I was (and perhaps still am?) considering running for Mayor of a major American City, because the US deserves better! However, I don't think I can financially afford it at this time. But maybe next cycle.]

So the question is: where do we go from here? Is the high-national-debt + high-rate + high-inflation environment going to be a long-term detriment to the growth of SaaS & tech? Or is this a short-term cyclical hurdle where "this too shall pass"?

https://www.usdebtclock.org/

How long will this recession last?

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Structural: it will last for years; this decade will be very challenging Cyclical: it could be over by next year

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