With so much money circulating in the economy in the 2000's, how is it that the country did not grow?  The problem is that much of the money was stale.  By stale, I am saying that it was not circulating and adding to the "velocity" of money.  In the late 1990's, the ultra-wealthy invested in venture capital and alternative investments that contributed to the creation of new businesses and industries.  The money helped grow ideas into what are now some of the world's leading companies.

Then, the hedge funds emerged.  They diverted the funds of the ultra-wealthy into vehicles of leverage and speculation, rather than investments such as venture capital.  Venture capital is an investment.  A hedge fund is speculation.  The diversion of so much wealth out of legitimate investments into levered speculation was a major catalyst in the downfall of the US economy.