The national debt passed 40 trillion dollars and is now larger than everything America produces in a year. Washington is spending two trillion dollars more this year than it takes in, and roughly a trillion of the seven trillion dollar federal budget goes to nothing but interest. This hour is the first of four episodes that build economics from the ground up, an economics course in four weeks, so that the debate about the debt, inflation and affordability can be had by people who actually know how an economy works.
Lawrence W. Reed, president emeritus of the Foundation for Economic Education, joins Jenny Beth Martin. He led the Foundation for Economic Education for twelve years, ran think tanks in Michigan and Idaho before that, taught economics at the university level for seven years, and is the author of nine books.
Today's topics:
What economics actually is: the study of human action in a world of limited resources and unlimited wants
Adam Smith, The Wealth of Nations in 1776, and the mercantilist myth that the world's wealth is fixed and can only be divided up
Why the national debt overtaking annual output changes the arithmetic, and what a trillion dollars a year in interest crowds out
Gross domestic product explained in plain language, and the case that you can grow the economy rather than ration it
The invisible hand of the marketplace against the iron fist of government, and the lockdowns as a live experiment in central planning
Value is subjective: the mud pie and the apple pie, and why the labor theory of value fails
Diminishing marginal utility, or why the sixth ice cream cone is worth less than the first
Leonard Read's 1958 essay I, Pencil, the claim that no one person on earth can make a pencil alone, and what that says about anyone who offers to plan an economy
How prices carry information, and what happened when the Soviet Union abolished them
Whale oil to crude oil, with no federal department directing the switch
Competition as the striving for excellence in the service of others for self benefit, and monopoly as a government grant of exclusive privilege
The proper role of government in an economy: night watchman, referee, defense, and Reed on mission creep
Free trade, the division of labor, opportunity cost, and the French economist Frederic Bastiat's candlemakers petitioning the king to block out the sun
Protectionism and the current tariffs, where Reed says the jury is still out
The Austrian School: Carl Menger, Ludwig von Mises, and F. A. Hayek's 1974 Nobel Prize
The Jenny Beth Show airs live Monday through Friday at 1:00 PM ET. Hosted by Jenny Beth Martin, co-founder of the Tea Party movement and Chairman of Tea Party Patriots Action. Subscribe for daily analysis of politics, policy, and the fight for constitutionally limited government. teapartypatriots.org
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