Economic and Financial Future

Folks on the left are very concerned about income inequality and low intergenerational mobility (it’s hard to get rich if you start out poor). Folks on the right are worried about a staggering debt load and out of control spending on social welfare programs. It looks like everyone is worried about our economic and financial future. What is it about our way of doing things that got us here?

But before we despair too much, we should remember where we are. We are the wealthiest nation on earth and we have the highest standard of living. Most people in this world would gladly change places with poor Americans. Our “way of doing things” has produced not only inequality and scary debt, but also an extremely high standard of living.

I’m not defending the status quo, but efforts to fix things often break things as well, so we should be cautious about changing anything with undue haste. Our ungainly political system usually protects us from hasty legislation, but, as we saw with Obamacare, the occasional concentration of political power produces sloppy legislation. Parts of Obamacare have already been jettisoned as unworkable, other parts are looking dubious, and no one seems totally happy with it. Democrats had a rare opportunity to make big changes and they acted in haste. Should the Republicans take control of government next year, they will be tempted to do the same.

We have plenty of problems that need fixing, but all change is not improvement. For all our problems, we’ve got it pretty good. We need more calm deliberation and prudence and less fiery rhetoric. We will probably be disappointed.

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