It's not all that complicated. The fundamental limiting factor of economic growth is resources. Not just natural resources, though they can provide a first order approximation, but technological and mental resources as well, and population and land. These are the actual things that result in wealth, the purpose of the economy is just to find the most efficient way to turn those resources into wealth. The economy naturally grows as new resources become available to it, analogously to a population of animals in an ecosystem.
The financial sector, and banks in particular, however have the ability to accelerate growth beyond that dictated by resources. Left alone, bankers and investors will lead to a massive boom, exploiting all available resources (both materials and ideas) faster than they can be replenished. Once the resources available can no longer support the now bloated economy, it starts self-consuming. It collapses. This is the fundamental boom-bust cycle.
Financial sector regulation acts as a brake on the economy, to stop it from accelerating out of control and exceeding its available resources. It does this by, for instance, requiring banks to keep a certain amount of their money in reserve, rather than lending it out, keeping liquidity lower and slowing down investment, leading to fewer new companies springing up. Funds get directed to more profitable (efficient) business instead of to every business or product that might have some profit. The effect is that resource use is slower and more efficient. If done properly, economic growth will approximately follow increase in available resources. It's a more stable system, overall.
Now there are times when you *can* allow unlimited economic growth. The settlement and exploitation of the resources of the North American continent between 1750 and 1850 was a situation when there were near-limitless resources available, so there was no need for a brake on the economy. This boom extended a little bit farther through the industrial revolution, where the main resource was ideas and engineering talent. But it still slowed down eventually, and thankfully, before it self-consumed there were limits placed on banks and corporations.
Banks were deregulated in the US between 1919 and 1924, and the US experienced one of its biggest booms ever--followed by its biggest bust. Banks were deregulated in the late 1980s too; the 90s saw a huge boom, then a small bust; a period of stagnation through the early 2000s; and a big bust in 2007/8. The pattern, though not as textbook as the 20s-30s, is still clear. The catalyst for the big bust of 2007, of course, was real estate, in which case there was too much money invested in too little land with too little actual value.
Taxes, by the way, are secondary to the economy. First off, it's worth pointing out that the US's tax rate is exceedingly low by the standards of developed countries, and is effectively even lower due to massive legal tax dodging by large companies. Companies will not leave a country because it has high taxes; that's ridiculous and if you believe that you need to educate yourself. Profits are (nominally) taxed in the country in which they are earned. It doesn't matter if Ford's headquarters are in the US, China, or Nigeria. They need a US branch to sell cars in the US effectively, and the money earned on those cars sold in the US is taxed in the US. Companies aren't going to stop selling things in the US, because the US is one of the world's largest, most profitable markets. They need to sell in the US, so they will deal with the taxes, because they're still making money. Right now they're not paying taxes, at least not to the degree they should be, thus removing another brake on the economy, as well as reducing revenue which is needed for essential government services, which must instead be gained by levying income taxes or incurring debt.
The problem here is that banking deregulation and exceedingly low tax rates starting in the 80s lead to a huge economic boom feeding mainly on technological advances. Eventually the value of the economy exceeded the value of the resources (tech and ideas) it was feeding on and it suffered a small bust. Through the early 2000s the economy was relatively static due to uncertain conditions, what with 9/11 and the wars. But eventually it caught up with us as the good ideas dried up, and the housing crash triggered a massive economic crash.
Now we find that the majority of our economic growth is occurring either from the services industry (a low-margin sector whose growth relies first on population growth, and second on population wealth) and high-tech industries. Due to America's garbage education system, most Americans are not qualified for or capable of working in the high-tech industry, since the average American is a undereducated dunce that couldn't find Beijing on a map and has a 50/50 chance of thinking the earth is 6000 years old. They're only qualified for service jobs, but there isn't enough population growth or increase in wealth to cause enough service sector growth to employ these people. So they stay marginally employed, or not employed at all, earning less money, reducing wealth, thus slowing service sector growth, thus making their situation worse.
The only way out of this mess is to slog through it until natural resource growth becomes great enough for us to recover. Until then it doesn't matter if our banks are deregulated or not, the investment wankers are just cannibalizing each other for now with minimal growth. For now we need to focus on education, as it appears that the more valuable resources now are ideas, not materials, and we need people who can have ideas and carry them through to completion. In a decade or so we need to have the mental capital available to make it feasible to give the economy a temporary boost (tax holiday and bottomed out interest rates, perhaps), followed by careful regulation to prevent runaway growth that could result in another bust. But it won't work if we're just a bunch of uneducated slobs whose job spectrum is limited to burger flipping, gadget flogging, or data entry.