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The results of my survey of economists will be published in mid September. It's going to take longer than I thought to swim through the data and pull out the good stuff. And I have been advised by smart people that this week is a bad one to compete for attention in the news.  I can tell you that I've seen the raw results and there will be surprises.

Let's do a little experiment here. I asked economists to rank issues by how important they are to the economy. I'm asking you the same thing now. In the comments, tell us what you think is the number one issue for the United States from an ECONOMIC perspective.

I'm guessing your answers will be all over the place, and that says a lot about the challenge of democracy. If you don't know which issue is most important to the economy, it's hard to know which candidate would do the best job.

In your view, what is the most important issue for the economy?
 
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Aug 27, 2008
Too much government medling to 'fix' economics. Resulting in higher prices in every sector the government gives away money (e.g. housing, higher education) or plaeces requirements (e.g. minimum wage or mandatory health insurance)

Has anyone noticed that youth unemployment went up after the min wage went up? that the more $ govt gives for tuition, the faster the tuition rises? I can go on...
 
 
Aug 27, 2008
Replacing the current income tax structure with the FairTax. This will solve so many of the other issues. This is not a joke. You owe it to yourself to find out more about this.

Under The FairTax Act (HR 25, S 1025):
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including:

A progressive national retail sales tax.
A prebate to ensure no American pays federal taxes on spending up to the poverty level.
Dollar-for-dollar federal revenue neutrality.
Repeal of the 16th Amendment through companion legislation.

http://www.fairtax.org/site/PageServer?pagename=about_main
 
 
Aug 27, 2008
there's so many options.

weather, inflation, unemployment, exchange rates, war, education, interest rates, energy costs etc.

although for america, i'd say the biggest indicators of the near-term future of the economy would be non-farm payroll. longer term would be new home starts.

both would be indicators for inflation and unemployment delta's . both of which would affect inflation, consumer confidence, and energy usage, which would further affect interest rates, energy costs, exchange rates etc.

basically just watch the building industry, they're the first to suffer in a downturn and the first to recover in the upturn as everyone races to expand/upgrade. it won't solve the problem, but it will give you an heads up on the coming change in direction for inflation/interest rates/stock market/commodities market.
 
 
Aug 27, 2008
I'll go with
1. Trade Deficit
2. national debt
2a. Low individual savings rate
3. Social security & Medicare funding shortages

The struggle for me in identifying a few distinct items is that you can't really wholly separate these things from each other. Many people seem to pointing to low valuation of the dollar, which is an effect of having a huge trade deficit. You can argue, and I would, that we should work to decrease the trade deficit and, as a result, the value of the dollar would rise. You could also argue that improving the value of the dollar, without changing the trade deficit, would have beneficial effects on the economy (reducing the cost of oil, decreasing inflation) even though it would probably worsen the trade deficit in the long run.
 
 
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Aug 27, 2008
1) Private Debt -- too many people are leaving college with degrees that are essentially useless (college is the new high school) with 5 figures of debt strapped to their backs. Credit cards are really the only answer for most people, and we all know how well $10,000 of credit card debt turns out
 
 
Aug 27, 2008
The biggest challenge economically is to recognize that the 'producers' not only have enormous power and influence but that if they don't ,and if lose their incentives, the may instead decide (quite logically) to let someone else do the work.
 
 
-1 Rank Up Rank Down
Aug 27, 2008
1) Energy - When we have developed the algae farms, solar thermal sites and wind farms to fulfill 100% of our energy needs we will have:
A) Jobs in those industries for our unemployed
B) $700 billion of oil money to spend on our new energy sources in our own country
a) When that money turns over in our system 20 times that helps the economy
b) Environmental issues improve
C) Resolving the economic issues addresses:
a) Over Population
b) Aging Baby Boomers

It looks there is one major issue and neither of the current candidates have a comprehensive plan or, apparently, an understanding of that major issue/opportunity.
 
 
Aug 27, 2008
Stop taking 50% of my money and giving alot of it away for stupid stuff.
 
 
Aug 27, 2008
Trade Deficit.

As briefly as possible - in a global economy those countries that are net positive in trade generate money relative to the world, which can be used either to improve life domestically, invest for economic return in other countries, or donated to countries / causes for benefit. Those that are net negative either collapse under their debt (Eastern Europe) or get bought a piece at a time by those countries that are net positive (The U.S.).

But then, once the US is owned by Saudi Arabia, Dubai, and China, the economic problems won't really be "ours" anymore, will they? They'll be "theirs"...
 
 
+1 Rank Up Rank Down
Aug 27, 2008
Many of you so far (And I'm sure after this post as well) have stated the lowering value of the American dollar as one of the primary economic factors in America's future. While this is a fairly correct assessment, you attempt to give solutions such as "Inspire Americans to buy more" and "Open up new jobs" as ways to stimulate the economy by making more money trade hands inside of America. But the real root of the problem lies in our trade deficit. It's one of the first economic principles you learn in the economics 100s, that if you import more than you export, your economy shows a negative return. By outsourcing dramatic amounts of our labor, food production, and manufacturing, American companies have doomed themselves (At which point they began investing off seas. . . interesting) by literally spreading the dollar too thin. We're dividing America's wealth among the nations of the world, throwing it away for things we could easily produce ourselves, but at the end of the day we don't have enough left for us. We have tech support, we have cheap imported food, we have trinkets and electronics, but we also have dependence and instability. American right now could be likened unto a man who has cut off his own legs, knowing that it means less effort for himself to just hire two strong men to carry him around wherever he goes. Only this man then believes himself to be quite strong and quick when he is completely supported on the effort of others, while at the same time wondering where his money has gone.

So I suppose then, my answer to the question of the most important economic concern, is that of foreign trade. And while I agree with the esteemed Mr. Adams on his criticism that none of the current presidential candidates seem qualified, I would vote for any Man, or Woman, who promised to sever as many foreign trade obligations as reasonably possible until we could once again learn to stand on our own feet. It would be a slow, painful process, with a lot of early resistance, but once America has become independent, then we would be able to open trade again, hopefully balancing our importing and exporting.
 
 
+1 Rank Up Rank Down
Aug 27, 2008
I'll thow my hat in the ring...

1. Jobs - no jobs means no taxes, no healthcare (under current employer-provided system), no buying "stuff", and increased personal debt loads from the necessary use of food and energy.
2. Energy - the single greatest strain on individuals right now, energy prices have increased at near three digit precentages over the last four years while incomes have increased in the high single digit figures.
3. Inflation - in a country where our economy is dependant on the exchange of foreign products, the weak dollar makes for an even greater difficulty in purchasing goods.
4. Education - while not a front page issue, students have just returned to school and tuition costs are higher than ever before regardless of which way the stats are counted. This topic is most crucial from a long term perspective, but with other hardships upon the lower and middle classes, the long term vision doesn't appear to be taking precedent over short term needs.
 
 
Aug 27, 2008
my answer to the question of the ultimate root cause of most of the world's problems would actually be overpopulation - our planet just doesn't have the resources to support 8 billion people at a middle-class American standard of living. population directly and almost always linearly (sometimes even hyperlinearly) drives the scale of problems. for example, the environment can absorb a few thousand nomads maintaining their campfires but 300 million Americans driving SUVs=>global warming.

I'm going to go out on a limb and guess your economists' big surprise issue is going to be global warming and while I do agree that is certainly among the lit fuses burning their way toward the powderkeg that is the economy it is in fact just another effect of population. remember, humans have been burning carbon for ~100K years - what's changed in the last 100 is we've gotten a whole lot better at it and the number of people doing it.

I'm not pretending to have the answer since this is such a taboo problem it doesn't even get talked about (at least w/Social Security & Medicare we can admit we're too scared to talk about them) but I promise you that no matter what happens politically, socially and/or technologically the world will become less safe/secure/stable as long as the human population is a perpetual upward slope...
 
 
Aug 27, 2008
The Invasion, by far. It's cost 4 trillion dollars, which is a lot more than the housing crunch, the energy crunch, all that. Ending the imperialistic occupation would help the economy in so many ways that the other areas would recover.

Economies ebb and flow. They're supposed to do that. They do not need any help from rich white (or black) men with too much power. I am only eager to hear about your results because you are keeping us in suspense. Otherwise, I think it is a waste of time and money to rely on government to fix your problems. Sorry.
 
 
Aug 27, 2008
I think optimism is the biggest factor on the economy. Optimism of the media and shopping public in particular.
 
 
Aug 27, 2008
The war of attrition we're engaged in by playing the role of World's Policeman.
 
 
Aug 27, 2008
1. Financial / Home Mortgage Crisis
2. Price of Oil
3. Taxes
4. War Debt
5. Retiring Baby Boomers
 
 
Aug 27, 2008
We need a list of options for our answers to be meaningful. For instance, "related to fulfillment of preferences" is one plausible definition of "economic issue" and the development of safe, addictive, powerful legal recreational drugs looks to me like the most economically efficient way to increase preference fulfillment in the United States, while eliminating ethanol subsidies and shifting agricultural and trade policies to lower global food costs is probably the most efficient way to increase preference fulfillment globally, but the first wouldn't typically be considered an "economic issue", the second is clearly economic but primarily helps global citizenry, not what respondents are generally thinking of. If asked in an open ended manner I might expect medicare&medicaid insolvency to top the list for those economists focused on the long term, oil prices or mortgage crisis for those with a short term focus, free trade for those looking for a text-book answer, China for the more foreign policy oriented, and global warming and immigration for left and right wing nuts respectively.

Seriously Scott, I wish that you would e-mail me to discuss how to best elicit information on controversial subjects, how framing matters, etc. Failing that, you should read www.overcomingbias.com
 
 
+2 Rank Up Rank Down
Aug 27, 2008
I would pick dependence on foreign oil. Our country has huge energy demands, but OPEC pretty much controls the oil part of it. Recent events show how the change in oil price has affected every aspect of the economy. People stopped buying SUVs and trucks, and all car sales are way down. Prices of everything are up because of the extra cost to transport goods. The airline industry is collapsing.

OPEC could pump more, and yes, there are other factors getting in the way before that oil hits our gas tanks. But the crude oil price is what drives fuel costs, if you believe Mr. Mobil and Mr. Exxon.
 
 
+3 Rank Up Rank Down
Aug 27, 2008
For the world economy, it will be the price of energy. It is always the cost of energy since that drives everything else.

For the US, I think it is the negative savings rate.
 
 
Aug 27, 2008
# 1 - Education (Global economy in which we cannot compete)
# 2 - Energy
# 3 - Inflation
 
 
 
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