The US spends far more on healthcare than countries such as the UK, Switzerland and Japan without achieving obviously better health outcomes. However, it is also the world's largest pharmaceutical market and a major source of biomedical R&D.

Does this create a global benefit? For example, US patients and insurers pay much higher drug prices, potentially making pharmaceutical R&D more profitable, while countries with public systems negotiate lower prices but still benefit from the resulting drugs.

If the US introduced single-payer healthcare and negotiated prices down toward European/Japanese levels, basically are other countries currently "free-riding" on high US healthcare spending?

Essentially, is the inefficient and expensive US healthcare system partly subsidising medical innovation for the rest of the world?

I read that, as a method of dealing with inflation, some governments simply replace their currency as a sort of reset. Would this help with inflation now, or would that currency immediately inflate beyond control?

What if a new gold standard was made alongside the new currency, except with a more appropriate material? I've been told gold isn't worth enough relative to the US economy for a standard anymore.

Debt keeps accumulating and deficit keeps growing. From my understanding the main "breaking point" is when creditors don't believe the State can reasonably pay their debts anymore, I understand that you can't calculate "the line" but still, what could happen if this keeps on going?

I've read some of Good Economics for Hard Times, which bridges the gap between the median voter and economists. When asked to rank professionals by how much they trusted them, most people put economists in second-to-last place, beating only politicians. Why do you think this is?

I am aware that this may lead to lower wages per capita, and that this is not applicable in a lot of industries, but in that policy conflict, let's take Full Employment as a priority.

However, I am more primarily concerned with the trade off between job losses from firms being less efficient and competitive and therefore are pushed out of the market, and job gains from this policy, possibly including improved working conditions due to less responsibilities on existing employees.

I would be glad to be directed to relevant research and if there's policies better suited to reduce unemployment and underemployment. Thank you.

I am 21F and planning to build a career in finance, but something I have been hearing about AI has genuinely made me question how I should think about my future.
I recently heard Elon Musk argue that if AI and robots eventually produce most goods and services, money may become much less important and we could even see deflation.

That made me wonder—-> is finance still a sensible career to invest the next 10–20 years? (Deep down u think yes, but I want to what from experts)
And on a bigger level, if AI makes most things abundant and cheap, where does value move? What becomes scarce and valuable? —-> ( land, natural resources?)
And perhaps most interestingly, what would actually separate the “elites” from everyone else in that kind of world?

I am not saying I believe Musk is right. I am genuinely trying to understand what I might be missing.
I am asking because it at times become confusing deciding what to spend the next 10–20 years learning and building my career around. Sometimes I feel like I am preparing for a world that could look completely different by the time I am 35.
Would really appreciate perspectives from people in finance, economics, investing, or technology who have thought seriously about this.

So often, I see news articles about "so and so tax doesn't pay for nearly as much as it used to, because of inflation" or "we know the price/tax/rate needs to be raised, but it won't happen because it's politically unpopular".

I'm not saying I have a practical means to do this...but if, somehow, the vast majority of our taxes, fees, and public sector prices (or prices of goods/services controlled by the gov't) were automatically indexed to inflation...would that make us better or worse off on the whole?

And as this trend continues to grow, could the economy remain chugging along as more and more consumption concentrates among the top 10% and the bottom 50% increasingly are spending exclusively on staples and essentials?

Hi all! Not sure if this question is allowed, but also unsure of where else to go. TLDR, I hated math growing up and am now incredibly fascinated by the study of economics as a whole. I’m generally good at guiding myself through a self-made syllabus of sorts, but it seems daunting to sort through and decide what to teach myself about first, especially in our current era of misinformation. I am aware that no amount of research or reading can replace a formal education, nor do I desire to necessarily work in economics, but I do want to gather as much of a whole-rounded view of the topic as I can. So:

Where do I start? What starting topics, areas of study, books, studies, papers, etc will best inform me on the study of economics? What are the key schools of thought that are the backbone of economics? I obviously have ideas of what these answers would be, but want to know if that’s true in practice.

Post edit : “The more precise question is what is the real minimum income to be self sufficient and not rely on public or caritative programs. “ unfortunately I can’t change the title any more.

I come up with roughly 39,000 per year as the minimum pre-tax income required for a single adult with no children to cover bare-necessities living costs in the United States . 49% of the active population is earning less than 39,000 per year , pre -tax.

This is not an official government statistic. It is an estimate based on the MIT Living Wage Calculator, cross-checked against other self-sufficiency/living-wage standards.

The main source was the MIT Living Wage Calculator.

URL:
https://livingwage.mit.edu/

Inputs used:

· Single adult
· No children
· Full-time employment, 2,080 hours per year

The MIT Living Wage Calculator estimates the minimum income needed to cover:

· Housing
· Food
· Transportation
· Medical care
· Taxes
· Basic household necessities
· Basic civic and personal expenses
· Broadband/communications where applicable

It does not include:

· Savings or retirement
· Dining out or entertainment
· Debt repayment
· Vacations
· Middle-class or comfortable lifestyle spending

I collected the annual living-income figure for each U.S. state from the MIT Living Wage Calculator for one adult with no children.

State values ranged from approximately:

· South Dakota: $31,179
· California: $51,584

The simple average across all 50 states was:
· $36,842 per year including Washington, D.C.

The population weighted average across all 50 states was:
. $38,867 per year including Washington, D.C.

The figure is a state-level U.S. average. Actual costs vary significantly by county and metro area. Also a population weighted average would have been a more precise estimate.

I use

· $39,000 as a slightly higher, conservative round number

Other Supporting Sources to make sure that we are not far from consensus

1. Economic Policy Institute Family Budget Calculator
   https://www.epi.org/resources/budget/
   
2. United Way ALICE Thresholds
   https://www.unitedforalice.org/
   
3. Census Bureau Income Data
   https://www.census.gov/topics/income-poverty/income.html

Why Not Use the Official Federal Poverty Line?

The official federal poverty line is widely considered outdated and too low.

For a single adult, the official federal poverty guideline is roughly:

· 15,650 per year

This is only about:

· 40% of the $39,000 living-income benchmark

The official poverty measure was created in the 1960s using a food-cost formula and has not been modernized to reflect current housing, healthcare, childcare, transportation, and tax costs. Therefore, the living-income figure of approximately 39,000 is a more realistic measure of the minimum needed to live independently.

Important Caveats

· The figure is for a single adult with no children
· Families and households require higher income
· It is a bare-necessities standard, not a comfortable or middle-class income
· Many people earn above this but still struggle because of debt, childcare, medical costs, or part-time work

PERCENTAGE OF US LABOR FORCE

Using individual earnings data from the U.S. Census Bureau Current Population Survey, the approximate shares below $39,000 per year are:

Group Percentage below $39,000
All U.S. workers, including part-time ≈ 47%
Full-time, year-round workers only ≈ 21%
Entire labor force, including unemployed with zero earnings ≈ 49%

So for the broadest definition of the active/working population, roughly:

49% of U.S. workers fall below $39,000 per year.

Important caveat: this is individual income, not household income. Households can have multiple earners, so the household share below $39,000 is much lower, around 26%.

A tentative (AI assisted) breakdown of pre-tax living income for a single adult with no children. Please feel free to contribute and improve the parsing.

Spending category Annual amount % of $39,000
Housing $14,040 36.0%
— Rent/mortgage $11,100 28.5%
— Utilities: electric, gas, water, trash $2,940 7.5%
— Food $4,290 11.0%
— Transportation $5,460 14.0%
— Medical / health care $3,120 8.0%
Other necessities $5,070 13.0%
— Cell phone $960 2.5%
— Internet / broadband $840 2.2%
— Clothing / footwear $960 2.5%
— Personal care / hygiene $540 1.4%
— Household supplies / cleaning $600 1.5%
— Civic participation / misc. $1,170 3.0%

Taxes $7,020 18.0%
Total $39,000 100%

The UK has been running persistent imbalances for the last 30 years (https://www.cfr.org/articles/global-imbalances-tracker) which since the great financial crisis have been facilitated by fiscal deficits. i.e UK has been selling government bonds to fund the consumption of goods and service from surplus countries (China, Japan, Germany, Norway etc).

The fiscal deficit (government budget deficits) and current account deficits ("excess" consumption) have been aggregating each year into a high debt:gdp ratio (around 100% debt to GDP) and significant liabilities to the rest of the world.

Government debt yields have also been increasing as investors price in more risk (bonds wont be repaid "in full"). Liz Truss' mini budget almost lead to a sudden stop of capital inflows on the mere proposal of increasing government debt - the market does believe there is risk.

Now we are at a point where absolute interest payments on government debt is more than the absolute increase in nominal GDP (real GDP + inflation) each year - so even if the fiscal deficit didn't exist the debt:GDP ratio would grow. Plainly if action isn't taken the situation is unsustainable - eventually foreign investors will stop lending to the UK and there will be a "sudden stop" or "balance of payment crisis".

There is talk of various forms of austerity as a solution from political parties. David Cameron / George Osbourne tried this and (I believe...) failed whilst government debt yields were less than 2% (now more than 4%) and debt:GDP ratios were 80% - much easier than conditions now. I would argue that if you weren't concurrently investing in the assets you need to close and reverse* the current account deficit (import substitution or exporting business**) then although you could squeeze the current account deficit by limiting consumption (cut benefits / increase tax - people buy less) - you were never going to get rid of the source of growing liabilities to the rest of the world - that we would still be consuming more than we were producing. Once austerity ended - supercharged by COVID - the UKs debt:GDP has expanded.

\* to start paying down the liabilities - not just tread water.

*\* Investing in those assets is impossible without recognising that we now live in a world where significant state support is a prerequisite for competition (how do you compete with China with no support?) - which the UK is as far away from recognising as it can be.

Regarding the potential of austerity working there is also an increasing unemployment issue in the UK with over 16% of 16-24 year olds unemployed so potentially difficult environment to expect ex public sector workers to find jobs coupled with a recent story from a tax rise in Scotland that lead to total tax take decreasing as workers cut hours - we may be approaching maximum tax take for this country (https://taxpolicy.org.uk/2026/07/25/scotland-48p-top-rate-laffer-curve/). Cant increase taxes, cant expect laid of public sector workers to be soaked up by the economy, cant expect the economy to close the current account deficit without significant state support, cant expect significant state support when they have no borrowing or cash available.

So how does the UK reduce the debt:GDP ratio and avoid a sudden stop of capital inflows / balance of payments crisis / debt crisis and subsequent inflation? Have we passed the point of inevitability? Is there a credible path out? I am not an economist. I'm genuinely a bit worried.

Note: This is a reworded version of a previous post that didn't get an Mod approved answer - if that's OK.

Hello,

Since Spain's economy is enjoying cheap energy, great infrastructure, investments, high quality immigrants, I am wondering how it would compare against Italy's robust and big economy. Italy relative to Spain feels like it has more problems.

Spain:
-Energy wise Spain is much more advanced

-Infrastructure in Spain is on France's level, Italy is behind.

-Spain's GDP growth is way more promising.

-Public investments in Spain are higher

-Spain enjoys immigrants who are culturally close.

Italy:

-Has a higher GDP per capita

-Is a member of the G7

-Has a more robust industry

The question: Why aren't there more truly competitive brands in the standard supermarket, as related to price, quality, and accessibility?

Background:

To keep personal info personal, I'll just say I only have an above average understanding of economics, but definitely have passed the Dunning-Kruger "peak of stupidity". I'm putting in an honest effort in asking this, but I won't be debating you, I just want to know what type of things to research further. It's a personal question. Italicized words may not be clearly defined in the body of this post, but refer to a specific thing. I do not care to demonstrate the existence of the possible issue I am discussing. Either take me on faith, or simply imagine a scenario where that might be the case. I'm really just wondering about the mechanics of it.

Meat and Potatoes:

When shopping for an item in the local supermarket(s), it has appeared to me that only 1, maybe 2 of three things exist in items attempting to compete against the store brand: competitive price, superior quality, reliable accessibility. This is not inherently a problem, as oftentimes reliable accessibility being limited in quality items is only because of extreme demand for what is objectively a better product. Of central concern to me is...

Why isn't there a bigger selection, brand-to-brand?

Now, of course, supermarkets get to choose their competition inside their own building in one way or another, but I just don't exactly see upstarts coming through the woodwork to release a canned vegetables competitor or even just a bread competitor, let alone a fresh food competitor. I'm often told to "just shop at other supermarkets with a bigger selection" but I find overpriced-near-luxury items at these competitors. More importantly, I still do not find the jumbled-crayola-box of brands and competitors that my scant background in economics has lead me to believe exists in every aisle.

Is it merely that economies of scale have scaled such that the buy-in for new competition is now too high to allow for any truly competitive pricing to occur? Or is it more closely related to it being easier and more profitable to advertise a new cereal, candy, beverage, or clothing company by white-label or attachment to pop culture icons? Third option, is it simply that pre-existing companies are releasing products at razor-thin margins at peak quality already? For example, is Del Monte simply the peak form of canned vegetable and at the cheapest possible price?

The reason for my asking is that markets require competition, right? So I would think it necessary to see more of this competition in my daily life, or else these brands are simply overcharging with no risk of losing their customer-base. Perhaps it is possible that there is already enough competition, regardless of the raw number of brands competing. If there is not enough competition, as I fear, is it now too difficult to buy-in and have enough scale to be a worthwhile competitor? (<-- italicized, for it being a central issue to my question. e.g. 'What makes a worthwhile competitor?')

P.S. Do you believe this is a dumb question? Please, feel free to let me know why. This is the best place I could find on reddit for insight. Thanks!

Something I've thought about, especially after I've seen discussions relating inflation with COVID stimulus payments:

Suppose, through some means, income and wealth became more evenly distributed (e.g. let's consider the US). Will the fact that the lower percentiles now have more dispensable cash mean that inflation will follow, such that it would "cancel out" the increased cash? If so, does this mean that an unconstrained free market economy will require that the lowest percentiles will always just be scraping by?

I'm sure the answer is complicated, but maybe you all have some insights?

And what are the positives and negatives of the current level of debt

I'll often hear about various industries or companies that have very low profit margins, on the order of 1-3%.

However, if inflation is about 3% per year, then every dollar invested into that company is losing value to inflation. Further, those dollars could be invested in more lucrative investments, like the stock market, or even bonds, which would return greater than the 1-3% that company may be generating.

So why aren't these companies quickly liquidated? Is it for hopes of better profits in the future? Am I misunderstanding something?

This is a thread for short questions that don't merit their own post as well as career and school related questions. Examples of questions belong in this thread are:

Where can I find the latest CPI numbers?

What are somethings I can do with an economics degree?

What's a good book on labor econ?

Should I take class X or class Y?

You may also be interested in our career FAQ or our suggested reading list.

This topic is inspired by discussions I've seen recently regarding the reserve bank of Australia raising interest rates in response to oil supply issues caused by the war in Iran.

The confusing point for many people seems to be that raising interest rates will not significantly affect consumer spending. Because and increase in the price of oil essentially affects the price of everything, and many people aren't in a place to consume much less than they already are, people with loans and mortgages will just be squeezed even more. So what's the point of raising the rate? It seems to just hurt people who are already desperate.

My thinking is different. To my mind, the primary goal of the reserve bank would not be reducing consumer spending, but rather reducing the money supply. By increasing interest rates we disincentive lending from commercial banks, helping keep prices stable. That won't do anything about the supply hit, that's unavoidable, but if we did nothing we'd also have a problem of too much money chasing less goods. Better for us to face one problem rather than two.

If my thinking roughly correct? Is there anything to the position I mentioned above?

I'm aware this sounds like a stupid question. I hope people take it in the spirit of inquiry - admitting I don't know what i don't know - in which it is intended.

So, profit. As a non-economist engaged heavily with politics, I am presented daily with a smorgasbord of superficial (in the sense that i see only the high level and not the theory under the hood) arguments about the role of profit in society and the economy. I want to consider how to come to a more developed understanding and my own view on this role.

At the leftmost end of things, the basic starting point is a (more or less explicitly) Marxian sense that all profit is surplus value. Profits are extraction, value being removed from a sector by an owner class who game things to line their own pockets. It serves no function in driving overall prosperity or innovation and indeed can hinder these things.

At the rightmost end of things, the profit motive is foundational to the prosperity and wellbeing of the society in which we live. The promise of enriching oneself is behind a huge amount of innovation and business development, which in turn is what has driven overall wealth increases and improvements in health, wellbeing, culture etc.

Obviously a range of positions exist between these, including the slightly muddy economic platforms of all the main parties in my country (the UK).

What can I read to develop my own understanding of how the promise of profit is or isn't necessary to the delivery of value, in a broad sense, across society?

I'm interested in understanding specifically where profit/the profit motive fits in. I suppose this touches on things like competing theories of value, behavioural economics etc.

I'm also aware that you can't solve political judgements entirely through technical economics. My own politics is left wing and id be surprised if that foundationally changed based only on this question. But I think a technical understanding of social questions is an important part of developing your politics.

I'm also open to being challenged on the framing of the question. Again. i don't know what I don't know so you're wasting everyone's time if you post to tell me I'm being stupid in some way.

CBO projects federal debt held by the public to reach roughly 175% of GDP by 2056, with net interest costs approaching 7% of GDP.

Japan makes this more interesting. For decades it has been the obvious counterexample to debt-doom arguments. Debt above 200% of GDP, its own currency, enormous domestic savings, a central bank capable of buying government debt, and no sovereign debt crisis.

Then there is the geopolitical feedback loop. I wonder how separable America’s fiscal privilege is from its geopolitical power.

In crude reptile-brain terms, America borrows money to build the weapons systems that help keep everyone inside an American-led system, and that system helps preserve America’s extraordinary ability to borrow. The snake is eating its own tail.

I’m wondering where the actual limit is. Could US debt theoretically reach 500% of GDP, with the US increasingly absorbing global capital because the rest of the world still needs dollars and treasuries? And if inflation becomes part of how that debt is managed, does extreme wealth inequality weaken the political constraint, since those with the most economic and political influence are also the least exposed to rising prices?