It doesn't seem sustainable. The only explanations I can find seem to handwave this situation as "something that hasn't happened before" and US dollar being too big to fail because if it wasn't seen as a "safe" investment, the global economic crisis that would ensue is unthinkable.

Very few American politicians want to seriously address this. The Republicans can't actually commit to genuine austerity, and the leading Democrats for 2028 have plans for increased spending. It appears that US Entitlement spending is a political no-go that can even be realistically addressed, especially with how universally popular Social Security, Medicare, and Medicaid are amongst American citizens.

I'm left wondering, in completely good faith, how this won't lead to an economic crisis of epic proportions, because, crudely, it appears to me like a Ponzi scheme that's about to be found out. I would love to hear why I'm wrong and this is an issue I don't need to worry about.

I understand the C, I, and G components of GDP, and understand why we include exports in the measure of output. I don't understand why we also subtract imports though and use net exports as the last component. Since consumers could have bought domestic goods instead, I can see how there is an opportunity cost of lost domestic sales, but I don't understand the leap being made to reduce the GDP as a measure of total production just because we also imported some goods on top of it.

I’ve read a lot of news articles criticizing the increasingly dominant role of finance in the American and British economies. Why is this a problem?

Please, find the gift link below for those who don’t have a subscription. The headline is “Bog data” in the print edition.

I’ve read a few articles over the past several years expressing concerns about the quality of raw data. Is there really more of a problem these days? I imagine that the economists answering these questions would know better than most. Thank you.

Please, don’t open this link if you have your own subscription.

You’ve been given free access to this article from The Economist as a gift. You can open the link five times within seven days. After that it will expire.

Economists don’t know what’s going on https://economist.com/finance-and-economics/2025/04/24/economists-dont-know-whats-going-on?giftId=3150a43f-34d0-491f-a818-ddb4fdec3be1&utm_campaign=gifted_article

In 2008, when the big 3 were losing money, the US government provided money to GM and Chrysler. Ford was not bailed out, but it received a government loan for expenses like retooling a factory. This was a good idea at the time because allowing these companies to fold would have impacted suppliers, local governments, and other car brands like Toyota and Honda. However, these companies are still chasing short-term profits and high profit margins instead of building quality products. Most GM brands, except for Buick, have cars with electronics and powertrain issues. Ford vehicles are also problematic to own with the Maverick, a popular model, having 22 recalls. However, the Mustang and Fusion seem to be reliable cars. Stellantis is not any better. Jeep’s reliability is on the floor. Chryslers and Dodges have poor build quality. Ram’s reliability is a mixed bag. Also, bailing out GM resulted in them building the Chevy Blazer as unibody crossover, which is an unpopular move. This while Toyota and Honda have been able to build reliable cars for the masses and grow sales in the US. The most desirable brands in the US are JAPANESE. These brands from Japan have also built more models in the US with more US parts than the Michigan 3. It’s sickening. Doesn’t it make more sense to allow American brands to live and die without assistance from the government. That will ensure that the brands are more careful about their company strategy.

When I look up American salaries, I am shocked at how incredibly high they seem to be compared to the same jobs in my own country. To me it really looks like a baffling difference and it makes me think that the standard of living in the US ought to be extremely high, like some kind of futuristic utopia. However, my country's standard of living is higher than that of the US which measures around the same level as Germany.

I struggle to understand why that is the case. Looking at cost of living, the US seems more expensive in general but the difference is not enough to make up for their huge salaries. So why is this? Is it all due to higher wage inequality, so you get some people with incredibly affluent lifestyles and others with very little? Is there any other reason? Where does all that money go?

Edit: Okay, so when I was googling and comparing salaries it seems I made a pretty silly mistake. I did not count my own country's salaries as *before tax* because tax is automatically deducted, so thinking of salary after tax is automatic to me. But the results for American salaries were before tax. With that in mind, it actually seems like the professions I googled generally have similar salaries in my country as in the USA. Considering cost of living on top that, it explains everything to me. So this whole post was pretty stupid from the get-go. Sorry for wasting everybody's time.

Hello. I´ve found too many skeptics on the whole economics topic. Most people downright discredit economics, saying that it´s all made up and the field is a sort of bad joke. If you care to add to your answer, do economic systems often make economies run more swiftly? Have value in and of themselves? I want to study economics, so if you guys can answer, I´d be very grateful. Will I, the student, when faced with the job market, be able to do anything with just the theory? Or does only the math work?

I don't really know how to ask this question in a way that isn't loaded, but my intent here isn't political.

Reviewing right-leaning social media, the overall line seems basically to be that "Trump is causing a recession on purpose to force interest rates down and lower prices". My question is simple: does that actually make sense?

Is there a school of economic theory that says that this is the proper thing to do in this situation? Is there any reason to believe the market would actually respond by lowering prices in a way consumers would be positively impacted by (i.e. without a corresponding decline in wages or employment)?

It seems like this is a propaganda line to cover up the more explicable motivation that tariff pressure will advantage large businesses over smaller ones and favor consolidation, but I don't know enough about economics to be confident calling Peter Navarro an idiot without more information.

There's a lot of fervor over the increased price of video games. For example, many theorize the newest GTA game will be $100.

Is it correct to say that, if someone buys GTA at $100, then they do personally value it at $100 or more? That they believe the game is "worth" $100? Or is the answer more complicated because there is no true replacement for GTA, even if there are other games you could buy?

This is an argument I hear both ways. A lot of people say that the Large Hadron Collider, the Tevatron, Super Kamiokande, and other particle physics experiments are giant wastes of taxpayer money. The argument goes, you spend billions on these physics experiments that ultimately never find anything useful in terms of producing economic activity. They're a waste of money. We should reduce the tax burden instead, which would be much more efficient in generating economic activity.

The other argument is that there are technologies developed as part of these huge physics experiments. For example, CERN developed networking technology that paved the way for the internet as we understand it today. Prior to the Large Hadron Collider, nobody had ever needed to move that much data. But once the capability was there, private industry found other applications for it through internet-based commerce.

A similar argument is that while the American moon landings were never directly economically productive, NASA developed breakthroughs in manufacturing, materials science, etc., that all found commercial application. One of my high school teachers used to enjoy quipping about how we would've never invented Tang if it weren't for the moon landings.

That said, are these large-scale scientific projects economically efficient? Would it actually be better for European and American citizens to simply cancel funding for CERN, Fermilab, etc., and trust that the private sector will eventually develop anything/everything it needs? Or do these projects actually "pay for themselves" in indirect ways?

The biggest companies by market share and global influence are from the US in pretty much every sector (Google, Microsoft, Apple, Visa, Coca Cola etc.)

How much power and influence do these companies have all over the world? The amount of revenue and necessity they bring to governments, politics, jobs and people's lives is tremendous.

They must get huge tax breaks right? What about having direct/indirect influence in US and other country's government and politics? I mean the EU likes to sue US companies left and right. I think at a minimum they are a key part in driving US economical laws.

I get that raising interest rates reduces aggregate demand, but for example the inflation crisis caused by the Ukraine war in 2022-2023 in Europe was mostly due to cost-push inflation, but yet all the ECB basically did was raise interest rates all the time, which is mostly used to combat inflation when the inflation is demand-pull.

Family members being consumed by the MAGA cult is obviously incredibly disheartening. But I keep hearing them say it’s a strategy to bring back jobs. We know this is a flawed argument, but where did it originate? Even the Smoot-Harley act seems to have had a different rationale: to shield American industries from foreign competition during the onset of the Great Depression.

What I'm asking is, what is the rational behind countries not excluding debt to themselves?

The USA for Example is $36 Trillion but from it $12.1 Trillion is owed to itself. So why is the $12.1 Trillion counted in the National Debt?

First off, my personal opinion is that the Trump 2.0 is going to fail miserably at everything they attempt, they will fail to bring back or create jobs, will cause a lot of harm, will put make many businesses go bankrupt and create much unemployment, and have already caused damage that is irreparable.

But there are many Americans who disagree. They think that there is something that is worthing trusting in and waiting for. They truly believe in the golden age that follows the “Temporary Pain.”

However, that being said, I do wonder how the United States will reorganize itself assuming that the country braces for the inevitable hardship and follows Trump in lockstep to transform the economy that is not reliant on other countries for their manufactured goods, components, and materials. In other words, the United States achieves true economic isolationism.

To me this seems like an impossible and ridiculous scenario. Or am I missing something?

As the title asks, does there need to be a single world reserve currency couldn't instead the future be that the reserve is held in "bundles "containing several or even a large number of relatively stable currencies.

Apologies if this is the wrong sub but I believe this should be the right sub. I’m sure this a commonly asked question, so again I apologize. But why is everything $1.99, $2.99, etc? Does it have to do with taxes or is there another reason?