There is nothing that irks me more than people discounting economics as “only theoritcal” or “not real”. Sure there are economists toiling away on pure economic theories. But economics as it is used by the government, President, and press to set and analyze policy is by definition very real! Even Keynes himself referred to his theories as Applied Economics. The price of gasoline changes due to a blockade of the Strait of Hormuz. That’s real economic theory in action. Jobs are destroyed in times of falling GDP and built in times of rising GDP – also explained and predicted by real economic theory.
It is only through an understanding of economic principles that one can judge the success or failure of economic policies. Here’s an example. In 2008 George W Bush sent out checks of 300 and 600 dollars to American taxpayers in spite of the fact that his very own economic advisers tried to talk him out of it.
After the fact, the economy was no better off, but W still touted this as something great he did – “Look! I made everyone wealthier, aheh aheh (imagine his laugh).” But the economists who told him not to do it and those who independently watched the economy all agreed that it did nothing. It did not grow the GDP, real jobs were not created, and increases in consumer spending were not noted.
If you don’t know your economics, it might be easy to accept W’s argument. “Hey yeah, I got that check. And paying bills was easier that month. Good for him.” But, we need to be smarter. We need to know the difference between economic policies that are good for the country and those that are good for the candidate. There is no such thing as a free lunch. Whatever he gave you has to be paid for by someone – likely our children. Don’t be fooled.
Besides, who thinks its cool to borrow from their kids?