A Layman’s Introduction to Economic Theory

In this episode, Kim D.H. Butler and Todd Strobel talk about the differences between Austrian and Keynesian Economics and how these economic theories relate to today’s economy. They also share the challenge of having our savings and investments beat inflation.

[00:00:32]  Today we’re talking about Austrian vs Keynesian economics

[00:01:32]  With our current economic issues it’s critical to understand how finances are being managed

[00:02:42]  The current President is running our country by the Keynesian economic theory

[00:03:23]  Keynesian economists believe that spending money is what drives things

[00:05:29]  Talking about Austrian economics

[00:06:05]  Austrian economists believe that saving is the motor of the economy and that private property and a free market drives growth

[00:06:58]  The challenge with Austrian thinking is that when we save money we temporarily remove that money from the money supply

[00:07:34]  Austrian economics type of thinking is a fabulous long term solution

[00:07:41]  Keynesian type of thinking is a short term solution

[00:09:17]  In our current interest rate environment we are penalized to save

[00:10:13]  Many of our grandparents lived in the era of Austrian thinking with little government control

[00:11:16]  Kim and Todd talk about inflation and how it affects us

[00:12:17]  “The inflation tax, while largely ignored, hurts middle class and low income Americans the most…” – Ron Paul

[00:12:36]  We need to look at inflation like we look at taxes

[00:13:05]  Having investments that earn a low double-digit rate of return is necessary to beat inflation

[00:13:49]  Roles of a free market under the two economic systems

[00:14:58]  The United States of America was formed on the basis of a free market and the desire for personal freedom which then comes with personal responsibility

[00:17:16]  Todd shares a powerful quote from John Maynard Keynes

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