Economics is not a science, often described as a "social science", like psychology and sociology, as study of history and theories. There are too many variables for scientific hypotheses, testing, and definitive conclusions.
"Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.
Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields."
Microeconomics includes the decisions we make and our behavior, whether or not we invest in our and our children's educations, save or spend money, work to build experience and relationships.
Macroeconomics includes national and world markets, supply and demand of goods, the monetary supply, tax and spending choices by our state and federal governments, aggregate savings and debt.
Economic collapses and recessions affect us all. Every collapse and resulting recession had the same causes, lack of regulations, or deregulation, corporate and invidual greed, irresponsible government decisions.
The Great Depression that began with the stock market collapse in 1929 is an example. FDR's and his congress's legislation alleviated the impact of the depression, but it ended only due to the massive federal spending for WW II.
After the war, the U.S. entered the greatest recovery and growth period in our history. Veterans were able to buy homes, go to college, invest in their futures. Wealthy high income people who benefited the most from our society paid their fair share.
That period ended with the 1973-1975 recession. There were multiple factors, but Nixon's price controls and removal the convertibility of dollars to gold made it worse.
If you have $1,000 in your bank account and earnings for the month, and $1,500 in needed expenses, you have a $500 deficit. You can cut expenses as much as possible, stop going to Starbucks, get another job or work longer hours. If you charge expenses on your credit cards you have debt. If you fail to promptly pay the bills in total, you have long term debt, that now includes interest.
The U.S. congress determines how much money our federal government spends, state legislatures for individual states. The president can propose budgets, negotiate and veto funding legislation, those vetoes can be overridden.
The only time in recent history our government had a budget surplus was under the Clinton administration. He had a Republican congress. There were cuts to spending that had long lasting impact on social services, thanks to John Kasich, Newt Gingrich and their colleagues, including reductions in funding for residencies for new medical graduates.
Phil Gramm's disastrous legislation, signed by Clinton, were major causes of later economic collapses and recessions. The results included higher national debt.
You may have read about "trickle down economics". The term originated with Will Rogers, who was talking about the failed policies of Hoover. "Reaganomics", based on similar "theories", fallacies, cut taxes for the very wealthy, created huge deficits, then he and his congress raised taxes on all of us, including taxing social security benefits.
Arthur Laffer was a major proponent of that fallacy. He was an adviser to Reagan, Kansas governor and senator Sam Brownback, and Trump, who signed tax cut legislation for the very wealthy in 2017. He gave Laffer the Medal of Freedom in 2019.
Charles Koch had threatened to withhold $700 million in campaign donations if Ryan and Trump failed to pass his tax cuts. The week after Trump signed the bill, Ryan received $500k, in spite of his retiring at the end of his term.
If you chose your parents wisely, like Trump, his kids, Jared Kushner, Charles and David Koch, the Coors family, the DeVos family, the Smith Richardson family, Art Pope, Richard Mellon Scaife... you don't have to worry about money.
Otherwise you have to work, hopefully you and your parents invested in your future, as you do for your children and grandchildren, if you're able to do so.
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