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Please, Help Me Understand Economics!


picture of world economics

This past week, in an assembly of all the university students and faculty, an administrator explained changes forthcoming in the basic core courses that all of our students must take at BJU. One of the new courses that will be required for graduation is Foundations of Economics. With all the difficulties people in today's world are having with debt, this should be a great course to give our young people information that could help them avoid personal financial disaster.

I find the world's economy far more mystifying than personal finances. The following picture from despair.com almost makes sense to me.

picture of funny picture

Today I'm posting some cartoons, informative pictures, and funny pictures on the subject of economics and the economy.

Many individuals and families are heavily in debt because, through credit, they have spent more than they earn. These personal financial crises are part of the cause for the current recession.

picture of cartoon

I'm not sure why doing the same unwise practice is supposed to work when the government does it. Here's a chart I found of the federal budget — where the government's money comes from and where it's going. You can click on it for a larger view.

picture of federal budget

If the president had ever run a business where he had to meet payroll and bill payment deadlines, he might have a better understanding of some of the realities that seem to be irrealities to him.

picture of picture with caption

The Chicago Tribune published an editorial cartoon in 1934 that sounds as if it could have been written about what's going on today, almost in detail! You can click on it for a larger view.

picture of Chicago Tribune editorial cartoon 1934

It's rather ironic that that cartoon was in a Chicago paper....

The Obamacare debate is far from over, and if government health care is rammed through, against the will of the majority of Americans, it brings the potential for far more national economic woes and debt.

picture of cartoon

So far we are not experiencing large-scale inflation as we have in the past. However, I do hear the word coming up more and more often, and it seems like a distinctly possible result of our present economy. In my post What's a Billion?, I talked about how bad inflation became in Germany between the two world wars. Here's another aspect of that that makes me wonder how far off this might be for us.

picture of hyperinflation

I just hope people will be careful with their word choices in front of our nation's leaders.

picture of bumper sticker

I know that our government's overspending did not begin with Obama — George W. Bush and the congress during his terms spent way more than they should have, helping to create the economic woes of the "October Surprise" of 2008.

picture of cartoon

The people at Spendaholics Anonymous know that the road to true recovery is admitting that you have a problem, not shifting the blame while you're on your own federal spending spree. The deficit and our national debt are increasing exponentially with Obama and the current congress.

picture of t-shirt

During the Reagan years we heard a lot about "trickle down economics" — the idea that when the wealthy have more money through lower taxes, they use it to start businesses that in turn provide jobs and thereby actually eventually bring in more money in taxes than would have come in by taxing the wealthy in the first place. Here's a flow chart of trickle down economics as it's currently happening in Washington DC.

picture of cartoon

Another bumper sticker states it differently.

picture of bumper sticker

When Ronald Reagan was president, we also had Bob Hope and Johnny Cash.

picture of Reagan et al

Now with Obama, we have neither Hope nor Cash.

It's no secret that unemployment is a huge problem right now, and it doesn't look as if it will get much better any time soon, all assurances to the contrary. Here's a sad story of one unemployed person.

picture of cartoon

I keep hearing of other countries whose governments are deep in debt and in financial difficulties. Who in the world (literally) owns all this debt?! How long can this kind of national economy and world economy go on?

Could someone please tell me what I'm missing in my understanding of economics?

quotation...

"No one can be so secure that calamity cannot take everything he has." - Drew Conley

=^..^= =^..^=
Rob

When the young electrician was broke, he wired for money.


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12 Comments on “Please, Help Me Understand Economics!”

  1. #1 Julie Rich
    on Mar 8th, 2010 at 10:41 am

    A friend of mine explained Obamanomics to me like this:

    You order the entire menu at McDonald’s and the person behind you pays for it. lol

  2. #2 Rob
    on Mar 8th, 2010 at 12:31 pm

    @Julie – I’ve heard a similar explanation, only it went like this:

    You order and pay and then give the meal to the person behind you.

  3. #3 Vikki
    on Mar 8th, 2010 at 3:05 pm

    These are great! Hard to pick out a favorite, but the Governmental Flow Chart and Obama thinking about how to increase the economy but taking money out and than putting it back in with tax are right at the top of my list. However, don’t tell Obama what comes after trillion is also right up there!

  4. #4 Laura
    on Mar 8th, 2010 at 3:22 pm

    According to WorldNetDaily, they’re considering a plan to finance T-Bills by making it mandatory that retirement accounts buy public debt … so Uncle Sam is taking our money (income tax) to pay for stuff it does, only it doesn’t do it as efficiently as the private sector, so it costs more — more, in fact, than what it collects from our pockets. So then it gets a loan (via T-bills) that it must pay back with interest. We have to loan the money because the T-bills are forced into our IRAs (if the plan goes through) and THEN, we get to pay higher taxes to pay ourselves off. Is this a Ponzi scheme, or what???

    Personally, I agree with the guy who said we should remember that “The government is a watchdog to be fed, and not a cow to be milked.” Our kids have been reading Frederic Bastiat’s 1850 classic, “The Law,” for social studies this year. He does a GREAT job of exposing socialism for what it is … legalized plunder. They’ve been remarking how much it reads like current events, even though it was written so long ago!

  5. #5 David Rodger
    on Mar 9th, 2010 at 6:50 am

    I like the Obama scorecard t-shirt. But it’s rather confusing to an outsider (non-American). We almost never hear of a current US administration blaming the previous one. In Australia, that happens all the time. A decade after Labor won power in Victoria, it’s still blaming the previous Liberal government. (Don’t let the names fool you. The Liberal Party really should be called The Illiberal Party and Labor hasn’t served the interests of labour for about 30 years.)

    Still, I supposed it’s a symptom of the obsequious tributes to the past. No one here would ever refer to an ex-Prime Minister as “Mr Prime Minister”. Once he’s out, he’s no longer Prime Minister. So what’s with this ridiculous “Mr President” thing?

  6. #6 Bron
    on Mar 9th, 2010 at 10:50 am

    I have the following website bookmarked as handy reminder: http://www.usdebtclock.org

  7. #7 Carrie
    on Mar 10th, 2010 at 2:38 pm

    Yikes. I’m glad my (very responsible) husband takes care of our finances. Although, as my dad pointed out to one of his well-paid co-workers, when I was on a Christian school teacher’s salary, I not only stayed out of debt, but bought a car and had money in savings. It’s all about spending less than you make!

  8. #8 Rob
    on Mar 11th, 2010 at 4:32 pm

    @Vikki – It is hard to pick, isn’t it?! 🙂

    @Laura – Your observation about the Ponzi scheme is quite astute. I’ve heard that very term used in connection with this in several places … not the mainstream media, though, for some reason….

    @David – Thanks for chiming in from Australia. I hope you will come back to my blog often. While it is always possible to go back and blame a previous president and his administration for present difficulties, there comes a point when the current president needs to own some blame himself. Many have deemed that Obama has done so much to aggravate our economic difficulties that the time for blame shifting is past.

    @Carrie – It’s like your dad’s having said that people need to take in fewer cavities than they expend, only in the reverse when it comes to finances. 🙂

  9. #9 David Rodger
    on Mar 12th, 2010 at 6:31 am

    Oh, agreed, Rob. My point was, if somewhat indirectly made, that blaming previous administrations does not happen much in the US compared to here. US politics gets a lot of coverage here (well, almost everywhere these days) and I would have expected to hear a lot more.

    Is it related to the nonsensical practice of calling ex-Presidents “Mr President”? I think so. There seems to be no shortage of vile criticism of the current president (whomever that may be at any time). But as soon as he passes from office, all is apparently forgiven… or at least everybody moves on… and they still call him “Mr President”!

    Maybe in a way that’s healthy, but it does divert attention from legitimate and warranted criticism for acts (or omissions) whose effects may be felt for many years to come, despite what the current administration might do to relieve them. And when you’ve got a hostile Senate (or is it the Congress there?), that may never happen.

  10. #10 Rob
    on Mar 12th, 2010 at 9:26 pm

    @David – Thanks for the further explanation. Most often we hear or read in our news “former President George H. W. Bush,” etc. What presidents do in office does indeed live on beyond the end of their time as “Mr. President.” Here in the US, it just seems to get worse and worse, unfortunately, with each new president. Our hope is clearly not in people. People can’t help but disappoint us.

  11. #11 Ray
    on Mar 17th, 2010 at 6:26 am

    Maragret Thatcher once said that the problem with socialism is that eventually you run out of other people’s money.

  12. #12 Rob
    on Mar 18th, 2010 at 8:06 am

    @Ray – How true. The well they’re drawing from is not bottomless.