The 7 year old understands Economics better then most Congressmen

This morning, GeekBoy complained that yet again, we didn’t have donuts for breakfast.  I used the cost of gas as a reason for why I would not be driving to the store every morning to get him donuts.  (Which, btw, we only have maybe once a month if that.  Honest.  He’s just on a ring-of-powdered-sugar-goodness kick right now.  Sorry kid, not gonna happen.  Have a PopTart instead.)

GeekBoy asked why was the price of gas so high.  So, I explained about OPEC, drilling in the ANWR, branches of government, lobbyists & how they work, environmentalists, PETA, price increases, supply & demand, oil, gas, and taxes.

At one point, we talked about how Americans need oil all up and down the chain. Electric companies need gas to run the mines to get the coal, Farmers need gas to run the farm to grow the food, factories need gas and oil to run the machines that make and package the food, stores need electricity to run the store, and we need gas to run the car to get to the store to buy the food.  See how the price of gas influences everything?

Then we talked about what happens when the price per barrel goes up – the gas company raises the price we pay at the pump.  I told him that the folks in Congress were getting involved.  That they had decided that the gas company was making too much money, and they (Congress) wanted to tax the gas company extra money (I used the example of 10 cents per gallon).  I asked him, what do you the gas company is going to do when the Congress makes them pay more taxes?  His answer, with no prompting from me, “They will raise the price [of a gallon of gas] again.”

Awesome.  He totally gets it.

2 comments on “The 7 year old understands Economics better then most Congressmen

  1. Rockin’. Maybe if a homeschooling mom went down to the Capitol and broke it all down in clear, easy-to-digest principles, there wouldn’t be so much confusion.

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