Mainstream economists and so-called experts have filled the minds of most Americans with many economic myths that are constantly reinforced by the media and repeated on the streets. These myths are erroneous at best, sometimes based on half truths. The majority of them are just false. We read and hear them every day: "inflation" is caused by rising oil prices; consumption is the most important element for economic growth; low interest rates are helpful to the economy; government expenditures help "stimulate" the economy; there is an energy "crisis," and many others. We will examine the most common ones and proceed to explain the reality behind these myths: Myth # 1: "Dependence on Foreign Oil"; Myth # 2: "Inflation is caused by rising oil prices"; Myth # 3: "Current inflation is being caused by the increased demand of millions of new consumers in China and India";
Myth # 4: "Consumption is the most important element of the economy"; Myth # 5: "Excess consumption is a feature of the free-market capitalist system"; Myth # 6: "Federal Reserve interest-rate policy can help the economy".