The economy is an issue that plays a part in every American’s life. Many politicians say we need more jobs, or less inequality—but how do we get there? There are a number of different ideas: changing how involved the government is in the economy, adjusting tariffs on foreign trade, changing how Americans are taxed, and addressing the national debt. How can Americans decide which ideas to support?
In fact, the economy can affect the price of your Saturday night movie ticket, your teacher’s decision of whether or not to give another test, and even how much data you decide to use on your smartphone. Economics extends to all resources, and not just money; it extends to belongings, time, even your smartphone’s data. Economic policy can be summed up in one question: resources are scarce, so how can society best distribute them?
When politicians are proposing new ideas, what they’re really doing is proposing how resources can best be allocated in a way that increases prosperity for all Americans. Should there be restrictions on how some goods are distributed? Should some resources be taxed at a higher rate than others? Should goods that pass from one country to another be taxed differently?
Opponents of government economic involvement believe that resources are best distributed when people are left to peacefully trade amongst themselves. They believe that when free markets remain free, people are capable of creating amazing things. When the government intervenes to fix the economy, it often makes the problem worse than if it had let people correct the problem by themselves.
Proponents of government economic involvement believe the government should centrally plan most aspects of the economy. They say that a central planner can decrease inequality, avoid economic depressions, and lower unemployment by setting prices, directing industries and setting production quotas based on what resources the country needs the most. Governments should increase their debt to offset the negative externalities of capitalism and ensure that all citizens have adequate access to education, healthcare, child care, and other important resources.