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Economic Policy: Good, Bad, or Ugly (Vol. 73)

Updated: Feb 7, 2023

analyticsbox | Oct 12, 2022


Good or Bad Sign

Good Economic Policy will get us to Prosper and Grow

Economic policy falls into 3 categories as I see it - good, bad and ugly.

Let me explain:

  1. Good: This is harder to explain, since it is often the absence of bad or ugly policy. But here goes. Good policies provide for government that is appropriate and necessary, but provides incentives to the population to grow and prosper. There is regulation, but not overregulation. There are taxes, but not punitive taxes. There is fiscal responsibility, which means living within its means. There are provisions to help the truly needy, but not giveaways to those who are able. It encourages good behavior, and does not reward bad behavior. Sounds simple, but it isn’t. There are so many influences for our representatives that this is very difficult to achieve.

  2. Bad: ‘Sounds good; Feels bad’. Over and over, we have good sounding intentions that just haven’t been thought through, and get bad results. As Milton Friedman so famously quoted, "Judge policy by the results, not the intentions." Here are some examples: War on Poverty. Literally $25+ trillion have been spent over the last 50 years, and there has been no improvement in the poverty rate (see No Spin #10, War on Poverty). Electric Vehicles. With today’s technology, these do little for the environment, are expensive to buy and operate, and will get more expensive if we produce many, and we don't have enough electricity to power a very large fleet (see No Spin #1). Renewable energy - wind and solar. Expensive, unreliable, limited environmental benefit. High Corporate taxes. It is just another expense passed on to consumers who really pay it, and it dis-incentivizes investment to expand output and grow the economy. Overregulation. 188,000 pages of government regulations. Just try to permit a mine or nuclear plant. Need I say more?

  3. Ugly: Cronyism. Special interests influence policy to gain special favor for them, when the policy is adverse to the public interest. Ethanol. Good for agriculture, bad for all of us. It takes 40% of the corn crop, which could be put to better use, is very corrosive, and inefficient. And we wouldn’t need the fuel if we had good energy policy (see No Spin #48). Farm subsidies. It uses our tax money to pay farmers so we can pay a higher price or incur more government cost. Tariffs. Charging fees to protect one industry, which simply raises the price to consumers.

The list is endless but I hope the point is made. Some are hard to sort out whether they are bad (stupid) or ugly. It doesn't matter, either way it is not working for us.

Our representatives must look at the seen and unseen consequences of policy to make sure what we do makes sense and is in the public interest.

They must quit ‘buying votes’ to get elected.

They must quit giving special treatment to the lobbyist with the most money.

Our representatives must become Statesmen and do what is in the best interest of the country, not themselves or special interests (see No Spin #19: Where have all the Statesmen Gone?).

BOTTOM LINE

If we are to continue to prosper and grow, we need good economic policy. We cannot succumb to special interests or do stupid things that seem good, but don’t work. We must become fiscally responsible with limited, but appropriate government, if we are to avoid the Debt Bomb (see No Spin #59).

It is up to us to be informed and express our opinions. There is a link on the website, ‘Contact Congress’ to send a message with one click. A message is prepared or you can write your own. Do it now, don’t procrastinate, or it will never get done.

LEARN ECONOMICS, THEN VOTE SMART

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