This may be a bit of an assumption, but chances are you’ve heard at least one or two things about the current state of the U.S. economy. Leaving aside all preconceptions of politics, it’s important to step back and take a good, hard look at what each side, Republicans and Democrats, actually want to do rather than say about the economy. Understandably, sound bites concerning “failed stimulus” and “fat-cat bankers” are much easier to process, emotionally and rationally, than a flow chart and equations. Would you rather listen to a live briefing from the Congressional Budget Office on the latest deficit and spending statistics or have a nice man in a suit and tie explain it to you over a TV dinner? Or perhaps neither choice appeals to you, and you think, “How could I possibly understand all this, anyway?” Well, you’ll no doubt be pleased to know that it’s quite easy to understand the finer points of economic policy. All you need to be able to do is tell a story.
Imagine for a moment that there is a patient sitting in a dentist’s chair. Let’s call this particular patient the U.S. economy. For the past few years, the U.S. economy has developed what can only be described as one mother of a cavity — let’s call it the 2008 recession. Now two dentists enter the room and begin to examine the U.S. economy. There’s some bickering between the two about what really caused the 2008 recession, but both agree that something drastic must be done. After a few minutes, the first dentist straightens up, saying, “I’ve got the solution. We inject the affected area with Novocain, and that will fix the chronic pain the U.S economy faces!” The other dentist proclaims loudly, “No! The correct course of treatment is to aggressively drill around the infected areas, and any other area which might still form a 2008 recession!” Then both dentists proceed to administer their personal remedies — imagine a slapstick routine a la “The Three Stooges,” complete with power drills and needles. Oh, and one very unfortunate patient.
Now, substitute the word “Novocain” with the words “economic stimulus,” the word “drilling” with the phrase “enact fiscal austerity,” and you’ll have neatly summed up the current debate surrounding the aftermath of the 2008 recession. Democrats want to keep up the economic stimulus in an attempt to free up currently sluggish lending markets. In economic jargon, it’s called “injecting liquidity into capital markets.” Republicans want to aggressively slash the U.S. government’s debt burden in an attempt to incentivize private sector spending and growth to combat the problem known in economics as “crowding out.” Both courses of treatment have very good cases going for them. However, the caveat is that either solution by itself won’t do the economy any good. Sadly, neither dentist wants to give the other credit for solving the problem, so both fight tooth and nail to administer their treatments while doing everything they can to thwart the other. Don’t expect the U.S. economy to be smiling any time soon.
—Nathan McBrady, sophomore, managerial economics
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