Looking back at readers’ questions for 2024.
Last year, I wrote an article reviewing my answers for Ask an Economist in 2023, which inspired more readers to send me new questions. This year, I’m going to do the same: to remind you, dear reader, that Ask an Economist can only happen with your help. If you have any questions related to economics or political economy, please send them to me at [email protected].
With that introduction, let’s review Ask an Economist for this year.
Most Popular Answer
According to the number of readers, my most popular answer was about the interest on national debt and how the government pays it. Stan K. wrote:
Peter, I often bemoan the mess we have as our national debt climbs and interest on the debt becomes one of our biggest mandatory expenses. However, I was pontificating on this budget-busting danger to my wife, and she asked, “Who do we pay interest to, and how do we pay it?” My answer was pathetic. Can you help me out?
The US debt is a complicated subject, so not many people know how it works. The simple answer is that the US government sells bonds. Individuals and organizations (foreign and domestic) pay the US government money today, and, in exchange, the US government promises to pay them money in the future. Bonds take on many forms, but the simplest version is that after a certain number of years the bond matures, and the holder is paid out money.
Sometimes people say that we “owe money to ourselves,” since most of the US debt is held domestically. But in the answer, I argue that this obscures the truth. Bonds are paid out by future taxpayers. So it isn’t the case that we owe money to ourselves. Instead, future Americans owe the debt balance to bondholders. Consider the following example from the article:
Imagine I take my wife and children on a nice vacation across the world. Our kids get some benefit from it, but they mostly aren’t old enough to appreciate it. After the trip ends, my kids give me a heartfelt thank-you. My response? Don’t thank me; I sold a bond in your name to cover the vacation. You’ll have to pay that bill long after I’m dead.
Stan’s concern about the debt is warranted. It really is a looming crisis, and, worst of all, it will be a crisis for those who bear no responsibility for its creation.
Most Difficult Question to Answer
The most difficult question I answered came from Larry L. He said:
[T]here are claims that historically humans used to work 15-hour workweeks long ago. I cannot imagine that being plausible being that the levels of technology and knowledge were much, much lower. But it seems to correlate to this same kind of socialist-like thinking: we can have the same amount of stuff without the same effort. What are your thoughts?
This question was difficult to answer because I had to go back to the primary research on this from cultural anthropologists. I found that the Ju/’hoansi people of Namibia are frequently given as an example of the 15-hour workweek. But is this a real example of people having the same standard of living despite working less?
No. First of all, after looking at the research, the 15-hour number does not include important tasks such as the creation and fixing of tools. These are tasks that do count as working hours in the US, so they merit inclusion if we’re making comparisons.
Second, the Ju/’hoansi are subsistence workers. They work for the food and shelter necessary to live, but nothing else. Shockingly, when you compare how long workers in the US have to pay for our much more elaborate housing and food, the time spent working is lower in the US for these categories. People work longer hours because they demand things above subsistence food and shelter.
Finally, and most importantly, the quality of life is simply not comparable. This is best demonstrated by life expectancy at birth being 36 for the Ju/’hoansi. Life expectancy for Ju/’hoansi who survived past 15 was much higher, but this implies significantly higher child mortality rates than we have in the United States. These stats weren’t easy to track down, which made this the most difficult question to answer.
Ultimately, if less than 10 hours extra of work a week significantly reduces mortality risk for my children, it seems like a no-brainer. The 15-hour workweek myth is busted.
My Favorite Question
My favorite question was from Vincente from Paraguay. He asked why the government focuses so much on macroeconomics rather than microeconomics.
I liked this question because it gave me the chance to discuss the difference between micro and macro. The key to this question is recognizing that not all work that is given the title of “macroeconomics” is actually economics at all.
Instead, sometimes macroeconomic work ignores fundamental economic laws. This is convenient for politicians because the laws of economics often render their plans and aspirations dead on arrival.
Most Common Topic
This year, the clear recurring topic related to government finance. Readers wrote several questions about the debt, how it’s paid, and how fiscal and monetary policy relate to the overall financing of the government.
This is no surprise. Since the introduction of pandemic policies, the US deficit has never been the same. Prior to the pandemic, the annual deficit hovered just under 1 trillion dollars. During the pandemic, it grew as high as 3 trillion dollars.
Post-pandemic, the deficit has remained much higher than its pre-pandemic trend, with the 2024 deficit estimated to be nearly 2 trillion dollars.
There is no end to this in sight, either. Social Security, Medicare, and Medicaid remain the biggest sources of US spending, and Social Security in particular is on pace to run out of money by 2035.
The next presidential administration, and the next decade in general, will be defined by our ability (or inability) to address this ballooning issue. FEE readers have their fingers on the pulse of these issues, and seem to be asking questions related to this.
The Future of ‘Ask an Economist’
In 2025, Ask an Economist will continue. My hope is that in the coming year, I’ll be able to offer answers in formats beyond just written articles.
I expect that the questions for the following year will surround the changes being implemented by the Trump administration. Similarly, I wouldn’t be surprised if we receive more questions from our Latin American readers, as indicated by the question from Vincente from Paraguay which came in late this year.
Whether due to the success of FEE En Español or the rise of free market principles in countries like Argentina with Javier Milei (or both), I’ve already noticed increasing engagement of these readers, and I expect the trend will continue.
Thank you to everyone who enjoyed Ask an Economist in 2024. Here’s to another year.
Ask an Economist! Do you have a question about economics? If you’ve ever been confused about economics or economic policy, from inflation to economic growth and everything in between, please send a question to professor Peter Jacobsen at [email protected]. Dr. Jacobsen will read through questions and yours may be selected to be answered in an article or even a FEE video.
Ask an Economist Articles in 2024:
February 3: Interest on the National Debt—Who Does It Go To?
February 20: Why Not Deflation?
March 1: Breaking Down MMT’s Guaranteed Jobs Scheme for Fighting Inflation
March 6: Do Traffic Tickets Make Us Drive More Safely?
April 6: Could Fractional-Reserve Banking Work with a Gold Standard?
April 29: A 15-Hour Workweek?
October 24: Why Do Politicians Focus on Macroeconomics?
December 12: The Economics of Security: Ask an Economist #31
