In the US, there appears to be a widespread belief that the economy “does not work” for most Americans. But let's examine some of the most common claims.
Seemingly every day, there are news reports and political commentators repeating economic fallacies that should have been dead and buried long ago.
Unfortunately, these misconceptions are often taken by the public to be true at face value, typically because their frequent repetition has given them an unwarranted sense of legitimacy. It is in fact all too common for claims about the nature of the economy to be used to push specific political narratives and policies, making it all the more important to skeptically investigate them.
Our first fallacy is the misconception that the value of goods imported from foreign countries directly subtracts from a country’s overall economic performance (measured as Gross Domestic Product, or GDP).
Indeed, anytime new economic growth data are released by the government, the accompanying news cycle is filled with reports containing erroneous statements like, “trade subtracted 3.2 percentage points from overall GDP growth, as exports fell sharply and imports soared.”
This logic implies that every dollar Americans spend on imported goods reduces the size of America’s economy by one dollar. Now, if that were true, we might as well stop importing any goods at all – but as it happens, this belief is completely based on a misunderstanding of how GDP is...
Washington, April 27 Prominent television hosts and journalists have pushed back against online claims that the White House ... Washington, April 27 Prominent television hosts and journalists have ...