Of all the things that are poorly understood, economics is one of the biggest. It has been presumed by people far too dignified to mention here that only one in 6 million people will understand the true nature of inflation. That’s a pretty staggering thing to reflect on.
But have a think on economic matters that are far more practical to the average citizen. Let’s take simple checkbook balancing. Okay, we know no one actually has checkbooks anymore, but you take our meaning. Why is it that children in school are not taught how to balance their banking accounts? It’s a very simple thing to do requiring nothing but the most rudimentary math skills.
Then there’s the law of supply and demand, an important thing to comprehend for anyone considering starting a business. Young people do not learn this basic building block of the economic disciplines unless they major in the subject in their senior year.
Now back to inflation. Most people think inflation means the raising of prices in general due to a kind of globalized economic entropy. That is to say, they consider it a sort of natural process of exchange. But this is wrong. Inflation is what happens when a government artificially pumps money into the economy. It makes the existing currency less valuable. It is not the cost of things that are inflated — its the number of pieces of currency. It’s like when you inflate a balloon — it gets bigger but the amount of rubber remains the same.
Here’s Learn Liberty with 10 common myths about government debt.
~ Liberty Video News
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