One of the problems with economics, in my opinion, is that politicians use it as a way of sailing too close to the wind.
Obviously, politics is all about using the wealth and production capability of a nation to wage war and to reward its supporters. Economics, starting with the classical economists, showed that making war and handing out freebies to the supporters doth not a prosperous nation make.
Before classical economics, it was easier for politicians to do what comes naturally: to wage war and loot and plunder. As long as you were the victor and you were doing the looting and plundering, what was not to like?
And hey, it all made a rough kind of sense. If wealth and prosperity were all based upon food-growing land, then it stood to reason that to expand the nation's food-growing land was beneficial. In Mein Kampf Adolf Hitler made the argument that of course Germany needed to grow its own food.
Today, however, food-growing land and prosperity do not go together. The Canadians have tons of food-growing land in the western prairies, and the ships queue up in Vancouver harbor to load up grain and take it to Asia. But who cares? What matters is excelling at value-adding activities from extraction, manufacturing, and the whole world of the modern economy of computers and the internet.
But politicians are still in the business of conquest -- usually in elections -- and distribution of loot and plunder to their supporters. So today, economics has become the technology of how much loot and plunder the economy can stand before it collapses in inflation. That is the point of macroeconomics, in particular Keynesian economics and the new MMT (modern monetary theory). The whole point of Keynesian economics was to give politicians an excuse to run deficits in the wake of a recession like the Great Depression. The whole point of MMT is to give politicians an excuse to continue spending and electing to the max. Because if the debt is in your own currency, who cares?
And there is a tendency in political circles to push things just a little further, because, if the current level of taxation and spending and regulation hasn't killed the economy, what damage could just a little more do?
Well, I think we are in the middle of a nation-wide test of going as far as it can go. Because when you crank up unemployment benefits into the stratosphere, and suspend rent payments for the renters, and suspend mortgage payments for the borrowers, and suspend student debt payments for the university graduates, what happens next?
Also, there is the little problem, which goes beyond economics, that government cannot withdraw a previous award of loot and plunder without incurring the rage of the recipients and the withdrawal of grateful political support.
For instance, if I were a Democrat right now it sure would be nice if the government were not spending $1 trillion a year on mostly white Boomer Social Security and $600 billion on mostly white Boomer Medicare. Talk about systemic racism! But, of course, nobody can ever reduce those entitlements and give them to deserving non-white post-Boomer voters. It would be electoral suicide.
But right now, someone has to take the bull by the horns and terminate the cool unemployment benefits and terminate the rent moratorium and deal with the mostly peaceful protests that will be ginned up by the activist left in opposition. Because we cannot continue with those loot-and-plunder giveaways without continuing to destroy the economy in a storm of inflation.
This is not rocket science. But it does go against the natural instinct of a politician, which is to give out tons of loot and plunder but never, oh never, to take it away.
And it does go against the experience of every Democratic politician in the land. For a Democratic politician loot and plunder has worked every time it has been tried. There are no wise heads telling today's politicians to Remember the Seventies. Or telling them to Remember Obama's Jobless Recovery. Why not, Nancy Pelosi? You were there in the Seventies. You observed how the Reagan revolution wrecked the 50-year-old Democrat hegemony. What happened to Leadership, Nancy Pelosi?
If you ask me it is an Act of God that Democrats are in charge of the post-COVID economy, and that the voters will blame Democrats for whatever goes wrong on their watch. It is Democrats that have to end the rent moratorium, Democrats that have to end the unemployment bonuses. And Democrats that have to take the heat. And it will serve them right.
And, Democrats, the sooner you do it, the better. Because the longer these freebies go on, the more that the recipients will cry bloody murder when you end them, the more that lefty mostly peaceful protesters will riot in the streets, and the more that the economy will spin into inflationary chaos in the meantime.
Imagine if Trump were president in charge of ending the freebies! Oh, the Horror!
Instead the Democrats are going to experience the Perfect Storm consequent on their whole philosophy of looting and plundering the economy to reward their supporters.
See, Democrats. Economics is not supposed to be a how-to on how for you can go to plunder the economy without wrecking it. It is supposed to show that politics is a wealth-subtraction business, always and everywhere, and the less of it, the better.