Economic Ignorance

Economic ignorance is commonplace. Here are 3 examples from the past few days:

1. I don’t know if a second stimulus will work, but I’m glad Obama is doing something.

2. We’ll never get our economy back on track if the rich don’t pay more taxes.

3. [The economics of] healthcare is too complicated for me to figure out. I’m just glad the government is stepping in to make sure I get it.

For many of you, the logical flaws in these statements is obvious. As for comment #1, why is “doing something” better than doing nothing if what is being proposed has already been tried and failed? Why must the government “do something” whenever a problem exists? Shouldn’t it act only when it can solve the problem.

As for #2, the “rich” do most of the hiring in a free market economy, and they hire fewer people when they pay more taxes. You could argue that the rich should pay LESS in taxes before the economy will recover.

#3 suffers from the same problem as #1, the idea that government needs to control our lives when things get complicated.  In both instances, I responded by asking the person what he or she was doing to learn more about the issue (stimulus spending or healthcare). Following the blank stares, I had my opening and countered with 2-minute presentations of some basic facts.

I rarely win free market converts in a few minutes, but I do try to make people think. Perhaps they’ll start listening more critically to the news, or maybe they’ll come back to discuss the issue again later. Perhaps someone else will pick up where I left off. If we are going to change Washington next November, I’m convinced we need to stay informed ourselves, and educate our friends, neighbors, and coworkers. It won’t happen overnight.

By the way, the runner-up for “top 3” this week was “I’m not sure what’s going on in Copenhagen, but we need to do something about the environment.” I’ll save my thoughts on this gem for another day.

4 thoughts on “Economic Ignorance

  1. A guy I work with said the government could solve the problem of high drug costs if they set a price limit for all prescriptions at $1 per pill. I asked him how drug companies would even be able to pay for R&D, testing and FDA approval if they couldn’t charge more. I got the same blank stare. He went to college. What do they teach in economics?

  2. my brother said that doctors should only be allowed to charge $20 for an office visit so insurance wouldn’t even have to cover it. i asked how doctors will be able to make enough money to cover expenses and justify their student loans. he said the government could pay off the loans by adding a tax on insurance companies. to this day he doesn’t understand the stupidity of this idea.

  3. The government has it all wrong, when it comes to healthcare. The problem started 20 years ago with HMO’s. That changed how healthcare is delivered and paid for. We have switched from what is the cost of healthcare to who going to pay the bill. We do not care what healthcare cost, as long as we can get it. We are only interested in someone else paying the bill. Get rid of office visit copays, hospital copays, get back to coinsurance and deductibles and people will start asking questions of cost and outcomes. Once this happens insurance cost will come down. Congress just hasn’t figured this out and neither has the American people.

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