Economics Matter

President Trump is dismantling the United States of America. Since the start of his second term in office, he and his MAGA jackals have fired numerous federal workers with little justification. The explained purpose was that their jobs are superfluous, and the positions only exist so that public agencies can commit waste, fraud, and abuses to line their own pockets. Another reason given is that the persons fired have not pledged to uphold the president’s agenda or have taken part in some manner opposing the president personally. Last of all, there is a claim that these layoffs will save taxpayer money. 

As his second term rumbles along, he is shutting down foreign aid, dismantling scientific analysis of weather, climate, health care availability and emergency preparedness. He claims these activities paid for by public money support fraudulent ideas by his political opponents, who are taking funds themselves. 

These asserted reasoning are only a snapshot. Most of them, including the persecution of people who do not identify their sexual orientation or gender identity on a binary seesaw. Another binary seesaw is also being used against persons who may not have American citizenship. The administration’s claim is If one is not a citizen then residence status in the US can be revoked by presidential decree which over rules the courts. 

The list of the high crimes and misdemeanors of the president and his jackals that I just noted is only a sample. The list grows daily. But when people talk, write, rant and even support these impeachable offenses, they miss the impact on the entire nation’s economy. 

As the public policy grew into a field of study, it became necessary to include economics as part of policy studies and proposals. Indeed, Adam Smith’s “Wealth of Nations” in the late 18th century was equal part policy and economics. Later in the mid-19th century, Karl Marx introduced “The Communist Manifesto” as an alternative view of policy and economics tied together. Today, we are examining the actions of a president, who often uses economic outcomes to justify illegal or unconstitutional acts. It highlights that evaluating these policies critically, whether one supports or opposes them, requires a clear understanding that any critique must recognize the possible economic and the policy outcomes. The two are tightly intertwined. 

Of course, in the 18th and 19th century all national economies measured their wealth by the quantity of precious metals being used to back their currencies. The connection between economics and policy always had to contend with one or two precious commodities constraining their economy. Today, with few exceptions, most nations have a fiat currency that is constrained by all resources available.  Instead of our economy being constrained a pile metal locked away, national wealth is measured by what is available to purchase. 

Resources are any goods or services available for sale, including human labor, finished products and raw materials. Human labor also includes individual skills and knowledge. Of course, not all resources are unlimited. We already manage many of these resources through conservation laws and rules. A resource-constrained economy will invest in restoring and/or replacing finite resources. These types of actions increase resource availability while preserving scarce ones. 

When DOGE (Department of Government Efficiency) went on its rampage of eliminating workers and altering work processes that lessen resources available to the government, it created a long list of rarely talked about effects. For example, when Social Security reduced its workforce and instituted mandatory in-person sign-ups, it created a long chain of negative economic effects. First, the obvious. There will be longer lines as there will be fewer workers available to handle each case. Forcing in-person visits when phone calls have not resulted in any significant number of fraud cases, not only increases the case workload, but it creates disruptions not only in the client’s time but also possibly a loss of wages if the client is still working. That may extend to the client’s family or friends who may assist them in getting to their appointment. Further the increased caseload on the remaining workers increases their stress levels, which results in increases in sick time and mistakes. The same is true of clients; increased stress and errors cause more sickness. Our health care system, overburdened already, is stretched further, raising costs and increasing stress for health care workers. These one dimensional systemic changes spiral and impact people’s lives, the result is unnecessary deaths at all along the spiral. 

Another example is the defunding of the Department of Education. The objective that Donald Trump gave was to return local schools to the state’s management. The federal government supplies on average less than 15% of public school budgets; the school district and the state share the allocation of the rest. As it is, most states struggle to provide sufficient budgets for schools, and districts must raise taxes every year to keep up their share. This information is critical because, as you know, The Big Bad Bill did not decrease taxes collected. This cutback in federal spending only added to every taxpayer’s local tax burden; or perhaps you might conclude that your federal taxes were never applied to funding the 15% or any other federal expense. Federal taxes serve only two critical purposes, which are to lower the amount of money circulating and to provide a reason for people to collect currency in order to pay the taxes. Because of the resource constraint these two purposes provide a hedge against inflation. The subject of taxation in a fiat currency nation will not be covered in the essay. 

Regardless, there is a direct connection that costs of services that the federal government is eliminating are being shifted to the private sector, state, and local taxing authorities, or to the consumer—you and me. Many times, it will be a combination of the three. No costs are being shifted to foreign nations as tariffs are paid ultimately by the consumer. 

Daily lawlessness, justice being discarded, and disregard for constitutional limits are dismantling America. Rebuilding will require an economic paradigm that recognizes constraints and opportunities for all. What we have left when it’s time to reinvent will require taking stock of resources to drive what we can do. Done right, we will create again a more perfect nation.