Tariffs. Economic theory tells us that tariffs are terrible. Populists want them because they think manufacturing will come back(have their cake) but the downsides are much, much worse(eat it too).
inflation is another one. The government is running massive fiscal deficits every year which has forced the fed into extremely hawkish monetary policy. Then politicians complain about that even though their crappy fiscal policy is what required it. Neither party has any interest in balancing the budget so hostilities between fed and congress/president will likely continue.
And which is the right course of action that economy "tells us" to do, but people don't like what it says?
I believe economics is inherently political and it cannot be divorced from its political goals, so that means it's not clear cut which is the "right" course of action, unless you define those goals (and it's probably unavoidable a subset of people will disagree with them). Something like decreasing inflation is not, by itself, a political goal.
Our country needs to raise taxes and cut spending. The excess money used to pay down debt.
Instead we will almost certainly inflate away our debt, which will mean mostly suckers who don't have equities or assets will pay for it (read: lower class).
It's because economists don't understand politics or that politics matters.
If you do something unpopular, you lose, and then the economic outcome is worse. Economists do not understand this. They say, "why do politicians do things bad for the economy?"
Because the stakes are high. People might die, people WILL protest. Hard to have a good economy when nobody is working, huh?
Look, there's a lot we can do, right now, to "save" our national debt. Get rid of the military. Get rid of medicaid and SS. Matter of fact, just dissolve SS and pocket all the money.
But when bodies start piling up in the streets because we have nothing for old people, and I can't drive to work because there's too many rotting corpses on I-90, we might have some more economic issues.
Economists, in their supreme naivety, believe costs get removed. No, they get moved. What happens if you move them somewhere where they can't be paid?
