Start a conversation with people about economic policies and things are likely to go nowhere in a big hurry. It’s just not a topic that interests people or one which they know anything about, at least on a theoretical level. You might get some comments about supply and demand or inflation, but they’re not likely to be very substantial. Bring up the different “schools” of economic thought, and you’re pretty much guaranteed to get blank stares.
All of this is tragic because economic policy impacts all of our lives in enormous ways. These impacts include whether we find or keep a job, how much our food will cost, whether we will be able to retire, what our tax bill will be, and an incalculable number of other factors impacting our lives. That’s some important stuff, and the failure to understand the economics behind forces that are so pivotal in determining out current and future lifestyles is a catastrophe.
For one thing, ignorance of economics makes investing and planning our financial futures much more difficult. For another, it empowers politicians who can get away with financial policies that the people would never stand for if they understood the economic and financial consequences of those misguided policies.
All of this helps to explain how Barack Obama managed to keep the US economy propped up during his tenure. To boil it down to as simple of an explanation as possible, Obama robbed future generations by pulling money from the future into the present through massive deficit spending. How much? He doubled the national debt during his tenure, turning a $10 trillion debt into a $20 trillion one.
ZeroHedge puts it this way, “If Barack Obama had not taken the extreme measures that he did, we would be in the midst of a historic economic depression right now. But by propping things up in the short-term, he has absolutely demolished our long-term economic future. But like most politicians, Obama has been willing to sacrifice the future for short-term political gain.”
Lest anyone misunderstand, that statement is not meant as a compliment to Mr. Obama. He just chose whatever method was required to keep the devastating depression out of his tenure as president, the future be damned.
Even someone with little to no understanding of economics should, at least at a very basic level, realize that doubling the national debt every eight years is not going to end well. The question that remains is when will it end, and what will that end look like.
To make sure that the point is made about the catastrophic effects of massive deficit spending, ZeroHedge repeats the warning in a different way, “Of course the bad news is that whenever the government borrows money it is stealing consumption from the future. So we are literally destroying the future that our children and our grandchildren were supposed to have in order to make the present look a little bit brighter.”
Like a giant Ponzi scheme or the game of musical chairs, there will come a time when the music stops, when there is no longer anyone or any future from which to borrow more money for current consumption. At that point, the collapse occurs. Think about that as you see students on their way to classes at universities, hopeful of bright futures after their graduation. What will we say to them if we’re still around post-collapse?