Economic Realities

Dec 2020

While rocket propulsion is a reasonably exact science, weather forecasting is not.  Although it, too, is a physical science, there are just too many variables to consider.  As we well know, it’s been said that economics exists in order to make weather forecasters look good.  Indeed, weather conditions, especially as they affect crop yields or storm damages, are an input to economic forecasting.  While precise GDP forecasting is not possible, there are still many useful things economics can tell us.  Simplistically, if we tax something, we’ll get less of it, and if we subsidize something else, we’ll get more of it.  Continuing with the simple, there is no free lunch when it comes to government spending and policies.  Someone’s got to pay, and politics is mostly about who that someone will be.  When taxpayers don’t seem to be paying, frequently everyone pays via inflation.