Good Economic Policy Helps YOU Today and Tomorrow
Sometimes we focus on how good economic policy helps us in the future, by controlling our deficits and debts. That is important given the huge and growing debts this country is accumulating and the problems that will bring. We don’t want to destroy this country for us, our kids or our grandkids. So we go over and over again the Debt Bomb (if you haven’t seen the video, please invest 2+ minutes to understand why we focus on it). But, good economic policy is important because it is good for all of us today as well. Let’s think about what good economics looks like: Good policy provides incentives and a framework for us to live well today and continue to grow our economy. We have been fortunate to live in a country where good policy has brought us one of the highest standards of living in the world. And we want to keep it that way. We live well, and we want to keep living well. The best way to do that is to look at what got us here, and emulate the past. But we are not doing that today and it has consequences that are hurting our standard of living right now. Many of today’s policies do not improve our lives, quite the contrary. We got to be a rich country following prudent policy where the government played a limited role in our lives, and lived within its means. It was much smaller and fiscally responsible. We evolved in a free enterprise, market economy with limited government and regulations into a great and wealthy nation. We had incentives and that fostered new and better products and a rising standard of living. Today, we have a government that has gone well beyond the role that existed when we grew into a rich country. It spends recklessly and borrows endlessly. This is hurting us today in ways we are just now seeing. Inflation: we all feel that today and it hurts. Our real income is declining as prices soar. There is one major explanation for this - bad economic policy. Our reckless and irresponsible fiscal policies have finally come home to roost. These enormous deficits our government runs must be financed in some manner. So we have been printing money, and that is inflation. The money supply is growing faster than our output. Growth and opportunities: This reckless spending and growing government not only leads to inflation, but it stifles growth and opportunities for all. What we really want is for output to grow, not the money supply - that will improve our lives. And that is accomplished by good economic policy, leaving more capital in the hands of the people (i.e. less taxing and spending), and free enterprise will do the rest - grow the economy. It is that simple. Bad fiscal policy, coupled with bad monetary policy is hurting us all. Fixing it helps us today and tomorrow as we grow the economy - not the government.
BOTTOM LINE
If we want to grow, prosper, and live well today, we need good economic policy. Economic policy falls into three buckets:
Good
Bad
Ugly
That is the subject for next week.
LEARN ECONOMICS, THEN VOTE SMART
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