In reading opinions regarding the U.S. and state economies from professional economists and in talking to these folks face-to-face I’ve never heard any of them say anything clear enough for a voter to act upon. For example, suppose that the U.S. owed 800 percent of GDP, like Greece (see this NY Times article (the U.S. figure is around 500 percent, though we’re not as centralized as European countries and there is almost surely a lot of state-to-state variation)). An accountant would say “You’re spending more than you earn. You have to stop or you will run out of money.” After hearing that, voters and politicians might be able to get together and agree on some spending cuts (not the trivial ones that they’ve managed so far). Perhaps even Californians would be able to agree that their cities could be run into bankruptcy just as competently by managers who earned no more than the President of the United States earns, that a qualified fire chief could be hired for only the same salary as the U.S. Secretary of Defense, and that a police lieutenant need not receive 3X as much as a U.S. Army infantry lieutenant in combat in Afghanistan.
Instead of accountants in public discourse, however, we have economists. So our problems are not recognized as arithmetic challenges, e.g., “How can a society with a median wage of about $16 per hour afford to pay local and state government workers $100-200 per hour (and then pay them for another 50 years after they retire)?” or “How can teenagers who score lower than their Chinese counterparts on every measure of educational attainment be relied upon to pay for 130 million poor and older Americans to receive unlimited medical services in the world’s most expensive health care system?” (see this chart for how Medicare will have 80 million beneficiaries in 2030 (I added in another 50 million for Medicaid (chart)).
The problems are instead categorized as amenable to complex solutions that only someone with a Ph.D. in economics can understand. Or perhaps they are cast as political problems, e.g., “If not for the presence of a handful of heretics amongst voters and in the legislature, we could pass new laws that would magically double our wealth” (I have some extra faith in Massachusetts because one party has controlled our legislature for decades and when we run out of cash there is less chance that they will waste time trying to pin the blame on the handful of Republicans who show up to the State House every now and then to collect a paycheck (but do nothing else)). But oftentimes economists are politically oriented and contribute to the relabeling of “not enough cash” to “too many people in Party X”.
So instead of the sober accountant showing up on TV or in a news article saying “You aren’t rich enough to do stuff like this” or “All of your wealth was siphoned off by the following cronies of the current rulers” we have Economist A saying “Really the U.S. is in great shape if only we printed more money here, had one government agency issue some bonds there, had another government agency buy those bonds, and changed some assumptions in making projections about the costs of Programs X, Y, and Z”. That would be confusing enough except that Economist B then comes on and says “No, the government shouldn’t be printing money and we need these other assumptions in our projections.” The contradictory and complex opinions result in paralysis and inaction where the accountant’s simple warning would have been heeded. Perhaps worse, people hear what they want to hear, in which case a complex macroeconomic argument will register as “We can all be wealthier even if we’re studying less in school and then working fewer hours and fewer years.”
So could we increase our society’s wealth if we sent all of our economists off on a three-year holiday?