When I attended the University of Missouri, there was a famous class primarily due to a dynamic professor that made a boring subject interesting.  Econ 51 was the foundational economics class and a requirement for business school students.

Hardly a day passes without hearing about some economic news in our country.  I’ve started thinking about how few Americans have ever taken a class to learn about economics.  Yet, a majority of voters indicated the economy was a driving factor in how they voted.

Many voters blamed President Joe Biden for high inflation. Informed economic understanding paints a different picture. Russia’s invasion of Ukraine provoked a boycott of Russian energy, forcing the free world to find an alternative energy supplier.  This drove energy prices up.

When COVID restrictions were lifted, there was a tremendous increase in demand for many goods that supply chains struggled to meet. High demand and low supply drive prices up.  Environmental issues diminished food sources such as chickens and eggs, again driving prices up.

Inflation can be corrected by rebalancing supply and demand. This is why the Fed increased interest rates, trying to slow demand to a level supply could match. Inflation can also be impacted by governmental policy. How well did Americans understand these economic issues and the specific actions of competing political parties?

Our growing national debt is a legitimate concern.  It is a concern because the interest our government pays on that debt is our single largest expense, exceeding our defense budget and our social safety net budget.  Any debt can be reduced in two ways:  reduce your spending or increase your revenue.

The “big, beautiful” bill President Donald Trump wanted Congress to pass included a large tax decrease. The indisputable calculation of this decrease would be to raise our national debt by almost $4 trillion. Much of our current debt accumulated due to past tax decreases which had minimal impact on economic growth, invalidating an economic theory long held by Republicans called “trickle-down economics.”

The average American cannot afford a tax increase.  But there are many Americans who wouldn’t even notice the impact of a huge tax increase. Americans currently hold over $160 trillion in combined household wealth. If this wealth were divided equally between 340 million Americans, each of us would have almost $500,000 in wealth.

Fifty percent of Americans hold less than 3 percent of this wealth. The top 10 percent hold over 90 percent of this wealth. The top 1 percent hold over 30 percent of this wealth.  

This begs the question of why Trump’s “big beautiful bill” mostly provided a tax decrease to the wealthy.  Unless you’re one of the wealthiest Americans, why isn’t this bill outraging you? Or did you not understand this?

Tariffs are a tax. They tax even the lowest income American because all of us consume the goods we import. If the tariffs are intended to reduce our debt, they place that burden on all of us – not the wealthiest.  

Supposedly Trump’s tariffs are intended to force corporations to bring manufacturing back to the U.S.  The economics of running a corporation drive long-range (10 or more years) investment decisions that lower the cost of manufacturing. Unless you are certain new tariffs will exist for over 10 years, how could you possibly make the expensive decision to relocate manufacturing plants to the U.S.?

Producing semiconductor chips in America is a worthy objective tied to our national security. Biden’s Chips Act encouraged a major investment by industry leaders to produce these chips in the U.S. The uncertainty of Trump’s tariffs has actually stalled this progress. Biden offered an incentive, a carrot. Trump has threatened a stick, a tariff. 

One approach worked, the other isn’t. Did you understand this when you voted?

Educated economists are in almost total agreement about the two worst things we could do right now for our economy. One is to raise tariffs and start trade wars. The other is to implement a major tax cut primarily for the wealthy.

A majority voted for Trump and put a Republican majority in Congress.  Many cited a concern about the economy as a reason for doing so. Yet, the actions they have taken are the very two worst actions from an informed economics perspective.

A majority of voting citizens and the government they elected are failing Econ 51. 

We will all suffer the consequences.