Fri 18 Apr 2008
Economics of Politics
Posted by Jack under Economics
When I started writing this blog, I had every intention of writing about my current financial situation and how I was bettering it. I still get to write some of those posts, but not as many as I would if I was laser focused on just my own financial well-being.
Instead, I have seen this take a wider view and, dare I say it, even some political overtones. While it has not been intentional, it is a logical progression. There has always been an interest in economics and how wider forces can impact me. So I started looking at those forces in an effort to find ways to suggest to you, my readers, ways to take advantage.
In my efforts to make sense of these larger forces, there has been a need to explain the lessons learned about them. This has resulted in some more interesting posts like: How To Live on Minimum Wage, Wal-Mart is Bad for US(A), and Leasing a New Car Makes No Sense. Others have proven to be less popular, but helped me understand more: What is Financial Independence?, The Scale of the Federal Deficit, and How to Snowball Debt.
The surprise has been that by looking into some larger scale items like the national debt and Social Security, my interest in politics has grown. It certainly is not because of politicians or their attempts to protect us from us. It is because of how tightly integrated politics is to economics which strongly influences what happens to me and you as individuals.
It should not have been such a surprise. Politics is about deciding what needs to be done as a country. Getting things done is about using resources (money). Those resources have to come from somewhere. That somewhere is the economy.
I guess it was because in my mind the economy was like a wild elephant and the government a ranger. The government could poke and prod the economy and tell it where to go, but you never knew if the economy would cooperate or if it would try to trample the ranger.
The more I learn, the more the analogy changes. It still seems like the economy is a elephant, but is a trained one. The government has carrots and treats and a small slender prod to get it to do tricks. Usually, it behaves well. Rarely it gets upset or sulky and bad things can happen until the circus gets shut down.
It seems to be a valid analogy. The bigger government is, the more the economy is like a performing elephant. The smaller government is, the more of a wild elephant. Despite the apparent dangers, the more I learn, the more I think we ought to be looking for a wild, untamed economy.
Give me your thoughts - pro and con. I'll start you off with just a few of the multitude of items that can be expanded on:
Pro
- A smaller government means it needs less money out of my pocket to operate
- A wilder economy means that only the best companies will be able to survive the harsher cycles
Con
- A larger government is better able to address the thousands of dangers that face us from carcinogens to global warming and recessions
- A tame economy means fewer layoffs and more stable employment
Agree? Disagree? Want to add to the list? Add your comments.
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