In my freshman and senior year of high school, I was required to take classes in personal finance and economics, respectively. During my junior year, I had a chance to take AP Macroeconomics but I thought it was stupid so I did not take it. Now in the current decade, I am somewhat regretting it for a few reasons. I now understand the importance of economics — especially when running a state. Sadly, it seems that economics has taken a back seat to the social issues this country is facing. I am not saying social issues like criminal justice and police reform are not important. However, focusing on one without the other has consequences. I have already written about the potential problems with fiat currency and noted examples but I guess it is time to talk about the importance of economics.
Economics is the study of the production, distribution, and consumption of goods and services. However, I think that we have stopped actually trying to “study” where our goods and services come from. We all focus on the capitalism, socialism, and communism labels, and that has not gotten us anywhere. I personally just do not want the domestic economy to crash, even if I maintain my God-given freedoms. However, the economy is in danger as the main medium of exchange in the United States, the dollar is becoming less valuable due to the record-high inflation rate. I believe part of the reason is because of the artificial labor shortage caused by the Biden Administration. Biden may have downplayed it at a recent CNN town hall in Cincinnati as he told a restaurant owner that he just needs to pay more. However, I believe this is evidence of President Biden’s economic illiteracy and the result of pandering first and not considering the consequences. I mean even his Treasury Secretary, Janet Yellen, has stated she believes there will be several more months of inflation before things return to normal. However, that does not make her a voice of reason as she has called for Congress to raise or suspend the country’s debt ceiling. The debt ceiling is essentially how much debt the US is allowed to accrue. The US debt is not something to be ignored which is why it is frustrating that Trump ignored it during his presidency. New Yorkers… am I right? My point is that the simple solution would be for this administration to stop, but Biden made it clear he thinks he can spend his way out of inflation. I think I can get to the source of the leftist naivety on economics: a lack of accounting for labor costs.
The Democratic Caucus is currently trying to raise the national minimum wage to $15 an hour. I have questioned the necessity of raising the minimum wage in the past, but after seeing how Biden is responding to the worker shortage, inflation is starting to make the rationale clear to me. The way Biden talked to the Cincinnati restaurateur made it seem that Biden thinks these business owners are just sitting on wads of cash. Don’t get me wrong, that may be true for corporate food chains like Papa Johns and McDonald’s who literally just toss money to people to get more referrals and hires. However, the damaged small businesses that have been affected by these lockdowns do not have that money. Also, raising the minimum wage to $15 may not have the same meaning since the value of the dollar is decreasing due to inflation. A recent example would be Chipotle as they raised their menu prices due to increased labor costs. It seems like the common American has not paid attention to macroeconomics at all, so we need to find solutions before it is too late. Here are some solutions.
The easy solution would be for the federal government to spend less money. Obviously, that is not going to happen because the heads of the House and the Senate are a Californian and a New Yorker, respectively and their states have some of the highest debtsin the country. New York has gotten so bad that Cuomo once asked the rich people to return to New York City from their summer homes in Connecticut and New York’s rich suburbs. Also in Pelosi’s hometown, the city council is testing prototypes of a trash can that costs $20k per can. That is in addition to the homeless issue and San Francisco’s stupid housing issue I have previously talked about. There is no sense of financial literacy in the executive or legislative branches of the United States and we are facing the consequences. Another solution is for all the states to cut the unemployment benefits. Since Biden does not seem to be stopping the unemployment benefits despite surprisingly low job numbers, states may have to start cutting the benefits themselves. In fact, some already have and have seen unemployment drop, but the number does not seem to be enough to stop the current inflation and save the dollar. Another option is just investing in cryptocurrency. To be honest, I do not know much about crypto but 1 Bitcoin is currently worth a little over $34,000 at the time of writing this article, and Bitcoin and other cryptocurrencies are being more widely accepted by majorcompanies, so in the worst-case scenario the dollar may be replaced and the economy can still function… unless Elizabeth Warren has anything to say about it.
Biden has been President for barely six months and the economy is still not back to pre-pandemic levels of prosperity. He talked about all the plans he had, but it seems like he just thinks he can toss money at things and fix them. No wonder his approval ratings are declining even among Democrats. Hopefully, in 2022, a more fiscally responsible majority takes the seats in both houses of Congress and we can change the direction of the country.