It wasn't long ago that someone told me economics is a soft science. I was shocked because it seems like there would be verifiable data and results. Unfortunately, the field seems to be just as divided as the political spectrum. Each side cherry picks data to support their side, and any given result is explained or discredited by results they would like to see. I have two questions. First, isn't there some way to get accurate data without personal bias? A quick example would be one side saying a president did a good job, and the other side saying that it was the result of a previous president's actions. Wouldn't there be some concrete way to say how much was a result of specific actions? They seem to completely disagree on taxation, inflation, debt, you name it. How can real world results not answer any of these issues in a definate way? Also, again without getting into the weeds, how many of these think tanks are liberal, and how many of them are republican. After hearing the media, they make it sound like pro government and pro taxation economist are in the majority.
I'm no economics expert - but I would call economics an evolving science - much like accounting - way back when, there was M1, and then M2 and then M-3 - now there are variants of M3 and M4 - I don't even know how they account for something like bitcoin
It's a social science and not an empiric science. Not strictly speaking a science at all. No scientific method in it's analysis. It is the study of human behaviour.
Economics is about emotions, not science. To be a good economist/investor, IMO, you have to be decent with numbers, have common sense, can learn to think free of emotional bias and most importantly, understand the human condition. If you don't understand human emotions, you will never be a good economists/investor. As Baff said above, economics is not a science, it is the study of human behavior.
The best thing an economist can advise a politician to do is get the incentives right. Taxing production is dumb for example. Economic models are doomed to fail because human beings do not behave like water molecules in a pressure gradient. There is no functional relationship between human behavior and gov imposed economic policy.
Unlike actual science, economics doesn't allow one to do control experiments. That's why economic predictions are never verifyable. Therefore, the recent tax cut bill is a giant experiment that the politicians are doing with our economy (and people's lives), which is based on hope (and ideology) rather than actual science.
Economics is more of an art than science. It is based upon expectations of the future and less uncertainty. That's Post-Keynesian Economic theory and is about 12th time I've replied to you as such. Steve
Data from Reagan, 41, Clinton, and 43 indicate that the Trump Tax Legislation and the regulations reform does get the incentives right and the economy will grow at 3 - 4% (if not greater in the first years). The policy changes are data driven and reduce significantly the government imposed costs on production which will result in gdp productivity growth rate of ~ 3% rather than the ~ 1% Obama command/control economy. The CBO model shows a cost of ~ $1T over 10 years. That's ~ $100B per year which is ~ 2% accuracy. Anyone who actually believes that economic models are that accurate is smoking something they shouldn't. The Tax Foundation model which uses a global basis and data driven growth assumptions shows a ~ $1T gain. And all this without any support from the D party who has prioritized DACA as the most important issue facing the US today ?? Amazing.
Let history and observation of current fiscal policy in other countries be your teacher. Capitalism works while socialism- communism fails. Supply side works while Keynesian fails. Some things are more simple than people think.
All based on cherry-picked data to support ideology, conveniently neglecting the recessions that were inevitably caused by these policies, plus the widening income inequality and private debt overhang, which impose more and more of a burden on growth.
Please explain how supply side policies caused the recessions of the last 35 years. ?? Income inequality is a meaningless metric. The median household income shows the real increase in the standard of living.
