If the Central Bank (or the gov't) could actually steer the economy into permanent prosperity, why does the business cycle still exist? Why do depressions occasionally occur? After all, England has had a central bank since like the 1600's.
We had the largest credit inflation in history. Debt used for consumption doesn't "pull demand forward." That's a fallacy. Debt used for consumption simply converts savings into pre-landfilled junk. The debt system was a vast conduit for financial savings to be consumed. Savers today have statements saying they own stuff...but do they? At the same time, bull markets for stocks, real estate and beanie babies caused people to think they had increased their wealth by hundreds of percent.
All bull markets come to an end. The bull market for debt ended in 2016 after 35 straight years. The bull market in stocks may have ended this year already (the jury is still out.) The bull market for commodities ended a while back (remember when oil was $147/bbl and people were certain it was headed to $500?)
Stocks rose 400% in just 9 years!! That means that a bear market that simply removes the most recent bull run (which itself was within a larger bull market dating back to 1974--DJIA or 1982--SPX) will see stock averages fall 80% (just to get back to 2009 levels.)
And what will people do if stocks fall hard? They'll do what recent experience told them to do....BUY MORE STOCK! That's not capitulation, and capitulation is a requirement for a lasting low. My guess is that stocks will fall 80%, then rally 150%, then fall 80%, then rally 150%, each time the rally will get people to think it's just like 2009-2018. Only what will happen is four -80%, +150% iterations...and just four of those nets to -98%.