All of us have a stake in economics.

Every country in the world wants its economy to grow strongly with low inflation and low unemployment. Although the US economy is growing at around 2.5% the unemployment rate is stuck at 6.7%. This despite keeping borrowing costs at near 0% to encourage investments and injecting $85 billion into the economy every month through repurchase of bonds. At 7.5% China has the highest growth rate in the world but there are fears about its debt levels which have reached 244% of GDP. In the Eurozone March inflation level was the lowest since 2009 at 0.5%, raising fears of deflation. In India, where retail inflation was 8.31% in March, we would be glad to see a period of falling prices. That would mean very low interest rates which would reduce borrowing costs for people and allow a consumer boom. But apparently low interest rates are not such a good thing according to an article by Barry Eichengreen, Professor of Economics at University of California, Berkeley. Low interest rates indicate low inflation which in turn indicates an economy that is stagnating, with low demand, high unemployment and low investments. Macroeconomic theories are too complex for us to understand but we can see that slow growth reduces tax collections which limits government's ability to invest in education, in retraining long term unemployed and in infrastructure, which are vital for economic growth. High unemployment leads to competition in the labor market, keeping wages down and increasing inequality which is happening all over the world. The rich are getting richer not by productive investments but by financial wheeling dealing and by avoiding taxes by hiding their wealth in tax havens. Governments must tighten vigilance to prevent tax cheating but the trouble is that the higher the tax rates the more the incentive to cheat. The best way to get people to pay taxes is to have a low, fair and transparent tax system. In India tax rates are too high so everyone tries to avoid paying taxes, resulting in vast amounts of black money which has increased property prices to astronomical levels. Multinational companies have shifted production to developing countries like China, Bangladesh and Vietnam where people are willing to work in slave like conditions to survive. Ordinary people plan long term. We save for our children's future, to buy a house or for retirement. Politicians, on the other hand, design policies for the short term, to win the next election. That is why economic theories do not work.