When something is destroyed, does that actually help the economy by creating construction jobs? Do disasters like fires, floods, earthquakes, tornados, or tsunamis actually stimulate job growth? Only if people were planning to light their money on fire before having to spend it on reconstruction! This is what economists call the Broken Window Fallacy.
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When machines or computers are used to automate a task, does that mean that human workers will lose their jobs? As with most questions in economics, it depends. See how computers and toilet paper illustrate two different effects of technology on jobs. Overall, EconGuy shows that even when workers in one industry lose out, the economy as a whole benefits from automation and technology.
We keep hearing that the wealthy pay a disproportionate share of our taxes. Do the rich pay too much tax? We can't answer that question without looking at how income is distributed. It turns out that tax payments are unequal because income is unequal. Even if we taxed everyone at exactly the same rate, the rich would still have huge tax payments - because they're the ones making the most income.
Many people think that immigrants take jobs from Americans. But is that true? Turns out there isn't a fixed number of jobs to be fought over by Americans and immigrants. Immigrants actually end up creating more jobs for Americans - find out how.
Why are rich countries rich? Why are poor countries poor? Most people think it's because of natural resources. They're wrong - economists know it's because of incentives. See what bridge collapses and the Korean peninsula can teach us about why some economies grow and others stagnate.
ObamaCare is the capstone of the New Deal - or it's a socialist plot to destroy America. It's hard to figure out the truth about Obamacare. EconGuy is here to explain how and why Obamacare reforms health insurance markets, helps individuals buy private health insurance for themselves, how it's similar to reforms enacted in some states, and the possible impact on jobs, employers, and insurance premiums.
Companies make profits. Is that good or bad? Neither - it doesn't last. Firms that make huge profits attract competitors, which drive prices and profits down. See what this has to do with supermarket checkout lanes, Pixar movies, and Viagra.
Why are we overfishing the oceans? Why are we cutting trees faster than they're growing? Why did the Easter Islanders resort to cannibalism? And how did an economics professor dad stop his teenage sons from wasting his whole paycheck on soda pop? It turns out that all of these are examples of the Tragedy of the Commons. This economic theory explains why, when a resource is collectively owned, there is no incentive to use it sustainably. This explains why many natural resources are depleted, even though that makes everyone worse off.
Can the government actually increase tax revenues by cutting tax rates? A lot of politicians - and even some economists - seem to think so. The idea is that the tax cut will spur so much economic growth that tax revenues increase despite the lower rate. It's an idea known to economists as the Laffer Curve. But is that true? EconGuy looks at the numbers, and then at recent U.S. experience with tax cuts, tax increases, and revenues.
What is the debt ceiling that we keep hearing about? For that matter, what is the federal debt, where does it come from, and how big is it? Does the debt limit actually limit the debt? What would happen if Congress failed to raise the debt ceiling? And what does the debt limit have to do with tight pants?