1 00:00:20,220 --> 00:00:23,628 Jane: This is But Why: A Podcast for Curious Kids from Vermont 2 00:00:23,689 --> 00:00:27,219 Public. I'm Jane Lindholm. On this show, we take questions 3 00:00:27,280 --> 00:00:31,114 from curious kids just like you, and we find answers. Sometimes 4 00:00:31,175 --> 00:00:34,827 you send us questions about things that are happening out in 5 00:00:34,888 --> 00:00:38,479 the world right now. We call those current events, and even 6 00:00:38,540 --> 00:00:42,009 if you aren't watching or listening to the news every day 7 00:00:42,070 --> 00:00:45,600 on your own, or reading all the newspapers and online news 8 00:00:45,661 --> 00:00:49,495 sites, you're probably getting information about current events 9 00:00:49,556 --> 00:00:52,964 from school friends, adults talking around you when they 10 00:00:53,025 --> 00:00:56,373 think you're not listening, or maybe because you do pay 11 00:00:56,434 --> 00:00:59,964 attention to the news. So one thing that may have trickled 12 00:01:00,025 --> 00:01:03,616 down to you lately is a word that doesn't really come up in 13 00:01:03,676 --> 00:01:07,024 normal conversation, but is everywhere lately: tariffs. 14 00:01:07,085 --> 00:01:10,615 Tariffs are in the news a lot right now. There's been talk 15 00:01:10,676 --> 00:01:14,206 about the US government imposing new tariffs on two of our 16 00:01:14,267 --> 00:01:17,797 neighboring countries, Canada and Mexico, and other places 17 00:01:17,858 --> 00:01:21,631 like countries in Europe. And there are already new tariffs on 18 00:01:21,692 --> 00:01:25,405 another country that America gets a lot of stuff from: China. 19 00:01:25,466 --> 00:01:28,874 But what is a tariff? We're going to find out today, and 20 00:01:28,935 --> 00:01:32,830 we're going to explore the idea of taxes, which are connected to 21 00:01:32,891 --> 00:01:36,482 tariffs and the economy more broadly. And then, maybe, when 22 00:01:36,543 --> 00:01:40,256 you read or see or hear news stories about economic issues in 23 00:01:40,317 --> 00:01:44,090 the future, you'll be armed with a little more knowledge about 24 00:01:44,151 --> 00:01:47,864 what's being discussed. Here to help us navigate these choppy 25 00:01:47,925 --> 00:01:51,333 economic waters is my friend Stacey Vanek Smith. She's a 26 00:01:51,394 --> 00:01:55,167 business reporter, so she writes and thinks about these topics 27 00:01:55,228 --> 00:01:56,020 all the time. 28 00:01:56,020 --> 00:01:59,231 Stacey Vanek Smith: I look at all the things that we deal with 29 00:01:59,307 --> 00:02:03,742 about money and the economy and things that we buy and the 30 00:02:03,818 --> 00:02:08,482 prices that we pay. And I ask questions about those. I try to 31 00:02:08,559 --> 00:02:12,000 understand them myself and then explain them. 32 00:02:12,000 --> 00:02:16,950 James: My name is James. I live in Wilmington, North Carolina. I 33 00:02:17,037 --> 00:02:21,380 am 7 years old. My question is, what is economics? 34 00:02:22,040 --> 00:02:26,189 Jane: Before we get into tariffs, we need to understand 35 00:02:26,273 --> 00:02:30,423 economics. Economics is the study of the economy. 36 00:02:30,507 --> 00:02:32,540 So...what's the economy? 37 00:02:32,540 --> 00:02:34,869 Stacey Vanek Smith: The economy is basically like this little 38 00:02:34,926 --> 00:02:38,563 ecosystem that we all live in of things that are bought and sold 39 00:02:38,620 --> 00:02:42,029 around us. So almost everything we do is somehow part of the 40 00:02:42,086 --> 00:02:45,666 economy. Like, if you eat eggs for breakfast, that's a big part 41 00:02:45,723 --> 00:02:49,075 of the economy. Everybody's talking about the price of eggs 42 00:02:49,132 --> 00:02:52,428 right now. Or if your parents drink coffee in the morning, 43 00:02:52,485 --> 00:02:56,008 coffee prices are getting really expensive; that's part of the 44 00:02:56,065 --> 00:02:59,247 economy. Or if you go to the store, or even if you go to 45 00:02:59,304 --> 00:03:02,486 school, if you have a music program you love, that music 46 00:03:02,543 --> 00:03:06,066 program is part of the economy. It costs money. If you play an 47 00:03:06,123 --> 00:03:09,419 instrument, if you take karate classes, if you take ballet 48 00:03:09,476 --> 00:03:13,112 classes, whatever you take, that is part of the economy, because 49 00:03:13,169 --> 00:03:16,806 it costs money. And so in a way, it's like the economy is how we 50 00:03:16,863 --> 00:03:20,500 do the things we want. It's how we pay for the places we want to 51 00:03:20,556 --> 00:03:24,080 go and the things we want to do. It's all part of the economy. 52 00:03:24,080 --> 00:03:27,426 Jane: An economy is a system for figuring out how resources are 53 00:03:27,485 --> 00:03:31,301 used to make goods and services, and all the ways those goods and 54 00:03:31,359 --> 00:03:35,176 services are bought and sold and used. So how much houses cost to 55 00:03:35,234 --> 00:03:38,874 build or buy, that's part of the economy. The jobs people have 56 00:03:38,933 --> 00:03:42,749 are part of the economy. The way we pay for things like roads and 57 00:03:42,808 --> 00:03:46,213 bridges, that's part of our economic system. And there are 58 00:03:46,272 --> 00:03:49,794 lots of ways to think about the economy. Sometimes you might 59 00:03:49,853 --> 00:03:53,258 hear people talk about the global economy. That's thinking 60 00:03:53,317 --> 00:03:56,369 about prices and jobs and countries trading with one 61 00:03:56,428 --> 00:03:59,775 another all over the world. Or you could think about your 62 00:03:59,833 --> 00:04:03,649 country's economy. And sometimes people even talk about the local 63 00:04:03,708 --> 00:04:07,289 economy. That's more like what's happening with your state or 64 00:04:07,348 --> 00:04:10,871 your region. You can even shrink it down just to think about 65 00:04:10,929 --> 00:04:14,628 what's happening monetarily in your own county or town. And you 66 00:04:14,687 --> 00:04:18,033 are part of the economy too. A big part of how we feel or 67 00:04:18,092 --> 00:04:21,673 understand the economy is by looking at how much things cost, 68 00:04:21,732 --> 00:04:24,785 and you've sent us a few questions about what you've 69 00:04:24,843 --> 00:04:26,840 observed about the cost of things. 70 00:04:27,200 --> 00:04:33,440 Alex: My name is Alex. I'm from Denver, Colorado. I'm nine years 71 00:04:33,440 --> 00:04:38,300 old. Why do prices of items go up over the years? 72 00:04:39,320 --> 00:04:42,687 Miriam: My name is Miriam. I'm nine years old. I live in 73 00:04:42,757 --> 00:04:47,247 Durham, North Carolina. Why have things gotten more expensive as 74 00:04:47,318 --> 00:04:48,160 time passed? 75 00:04:48,160 --> 00:04:52,505 Cole: I'm Cole. I'm eight and I live in Pennsylvania. Why do 76 00:04:52,586 --> 00:04:54,759 prices keep getting higher? 77 00:04:55,059 --> 00:04:58,599 Jane: Prices tend to rise over time in most economies. 78 00:04:58,600 --> 00:05:00,794 Stacey Vanek Smith: Yes, this is something that's called 79 00:05:00,855 --> 00:05:04,695 inflation, and you've probably heard this word a lot. Inflation 80 00:05:04,756 --> 00:05:07,560 is just a fancy way of saying prices going up. 81 00:05:07,560 --> 00:05:11,170 Jane: It's complicated, but let's simplify things, just so 82 00:05:11,240 --> 00:05:15,475 we can give you a sense of what we're talking about. So let's 83 00:05:15,544 --> 00:05:19,433 take the average money people got for their jobs and the 84 00:05:19,502 --> 00:05:23,460 average price to buy a candy bar a hundred years ago, and 85 00:05:23,529 --> 00:05:27,626 compare. According to the IRS, which is a government agency 86 00:05:27,695 --> 00:05:31,931 that keeps track of earnings and taxes in the US, in 1925 the 87 00:05:32,000 --> 00:05:36,027 average American income was about five and a half thousand 88 00:05:36,097 --> 00:05:39,985 dollars a year. Today, the median wage is about $48,000. 89 00:05:40,055 --> 00:05:44,290 Median means half the people earn less than that and half the 90 00:05:44,360 --> 00:05:48,248 people earn more than that. So it's sort of right in the 91 00:05:48,317 --> 00:05:52,275 middle. So from five and a half thousand 100 years ago to 92 00:05:52,344 --> 00:05:56,441 $48,000 now. A Hershey's candy bar cost five cents in 1925. 93 00:05:56,510 --> 00:06:00,815 Amazingly, it actually stayed the same price for many decades, 94 00:06:00,885 --> 00:06:05,120 before the cost increased in the late 1960s. Then the company 95 00:06:05,190 --> 00:06:09,217 doubled the price, but also doubled the size of the bar at 96 00:06:09,286 --> 00:06:13,522 the same time. Today, a Hershey bar costs $1.39. So prices go 97 00:06:13,591 --> 00:06:17,827 up, but typically, so do wages, the money you earn for a job. 98 00:06:17,896 --> 00:06:22,270 The problem is when the prices of things rise higher and faster 99 00:06:22,340 --> 00:06:26,645 than the amount of money people are making in their jobs to be 100 00:06:26,714 --> 00:06:31,019 able to pay for those things. Like, if we look at the price to 101 00:06:31,089 --> 00:06:35,116 buy a home today versus a hundred years ago, the amount of 102 00:06:35,185 --> 00:06:39,351 money most people earn has not kept pace at the same rate as 103 00:06:39,421 --> 00:06:43,240 the amount of money it takes to be able to buy a house. 104 00:06:43,240 --> 00:06:47,270 Brooke: My name is Thomas. I live in Melbourne, New Jersey, 105 00:06:47,349 --> 00:06:52,960 and I'm nine years old. What is inflation and like, how does it happen? 106 00:06:52,960 --> 00:06:54,921 Stacey Vanek Smith: We don't totally know. So why this 107 00:06:54,979 --> 00:06:58,672 happens is actually such a great question, and people are always 108 00:06:58,730 --> 00:07:02,077 arguing over this. Sometimes inflation can be good. It's a 109 00:07:02,135 --> 00:07:05,366 sign that the economy is growing. And the way that works 110 00:07:05,424 --> 00:07:08,713 is, if an economy is growing, it's worth more money every 111 00:07:08,771 --> 00:07:12,291 year. More money, more money, more money. That means that the 112 00:07:12,349 --> 00:07:15,696 people in the economy, they're getting more money too. The 113 00:07:15,753 --> 00:07:19,216 companies in that country are getting more money. The people 114 00:07:19,273 --> 00:07:22,447 are getting more money. Everybody's got more money, and 115 00:07:22,505 --> 00:07:26,140 that pushes prices up. And it's one of the most basic things in 116 00:07:26,198 --> 00:07:29,660 our economy, in economics, and it's called the law of supply 117 00:07:29,718 --> 00:07:33,180 and demand, and here's how it works. So, Jane, let's say you 118 00:07:33,238 --> 00:07:36,643 and I are going to the store, and let's say we both have $1 119 00:07:36,701 --> 00:07:39,817 and we want to buy Reese's Peanut Butter Cups, but the 120 00:07:39,874 --> 00:07:43,337 Reese's Peanut Butter Cups are $1.50. Well, we can't get the 121 00:07:43,394 --> 00:07:46,857 peanut butter cups. It's too bad. But let's say we go to the 122 00:07:46,914 --> 00:07:50,204 store and we have $5 and the Reese's Peanut Butter Cup is 123 00:07:50,261 --> 00:07:53,781 $1.50, we're probably both gonna get that. We really want the 124 00:07:53,839 --> 00:07:57,475 peanut butter cup. But let's say then it's $2 and let's say you 125 00:07:57,532 --> 00:08:01,226 maybe like Reese's Peanut Butter Cups a little less than me, and 126 00:08:01,283 --> 00:08:04,342 you're like, "You know what? This is getting a little 127 00:08:04,399 --> 00:08:07,862 expensive." I would definitely still buy it because I really 128 00:08:07,919 --> 00:08:11,613 want it. And I have $5 so I have enough money to pay for it. But 129 00:08:11,670 --> 00:08:15,248 then let's say it goes up to $4. You are definitely not buying 130 00:08:15,306 --> 00:08:18,884 it, but I will probably still buy it because I really want it. 131 00:08:18,941 --> 00:08:22,634 So when people have more money, then they are generally going to 132 00:08:22,692 --> 00:08:26,154 end up paying more money because you just have more money to 133 00:08:26,212 --> 00:08:29,963 spend. So then prices will go up because companies know that they 134 00:08:30,021 --> 00:08:33,483 can probably get people to pay a little more. So that is why 135 00:08:33,541 --> 00:08:34,580 prices will go up. 136 00:08:34,580 --> 00:08:38,089 Xavier: Hello, my name is Theo, and I'm nine years old, and I 137 00:08:38,155 --> 00:08:41,797 live in the DC area in the United States of America. Is 138 00:08:41,863 --> 00:08:44,380 inflation a good thing or a bad thing? 139 00:08:44,380 --> 00:08:47,186 Stacey Vanek Smith: This is also such a good question! People 140 00:08:47,254 --> 00:08:51,429 disagree on this a lot. What people generally think is that a 141 00:08:51,497 --> 00:08:55,604 little bit of inflation is a good thing. Because even though 142 00:08:55,672 --> 00:08:59,847 I would be very excited if my Reese's Peanut Butter Cups went 143 00:08:59,915 --> 00:09:03,885 down to 50 cents, that would be a really bad thing for the 144 00:09:03,953 --> 00:09:08,196 economy. And Jane, you asked me, what is an economy? It's this 145 00:09:08,265 --> 00:09:12,303 whole network around us of stores and shops and businesses. 146 00:09:12,371 --> 00:09:16,546 So it's good for me, but it's bad for all of them, because if 147 00:09:16,614 --> 00:09:20,379 prices start going down, then that means the economy is 148 00:09:20,447 --> 00:09:24,211 shrinking. Businesses aren't selling as much. They stop 149 00:09:24,280 --> 00:09:28,660 hiring people. More people lose their jobs. When prices go down, 150 00:09:28,728 --> 00:09:33,040 everything is getting smaller. Everything is shrinking. So when 151 00:09:33,108 --> 00:09:37,146 prices are going up a little bit, maybe not enough for you 152 00:09:37,215 --> 00:09:40,979 and I to notice, maybe our Reese's Peanut Butter Cup is 153 00:09:41,047 --> 00:09:45,085 $1.10. That's okay; the price has gone up a little bit, but 154 00:09:45,154 --> 00:09:48,986 it's not too much. Then that means the store is making a 155 00:09:49,055 --> 00:09:53,366 little bit more money. You and I are happy. We're still able to 156 00:09:53,435 --> 00:09:57,336 afford our peanut butter cups, and everything's growing a 157 00:09:57,404 --> 00:10:01,579 little bit. So people want to see prices rising a little bit, 158 00:10:01,647 --> 00:10:05,754 but they've been rising a lot lately, and that has been very 159 00:10:05,822 --> 00:10:07,260 stressful for people. 160 00:10:07,260 --> 00:10:10,598 Jane: Why have prices been rising so much more lately? Why 161 00:10:10,662 --> 00:10:14,257 can the rate of inflation change? And sometimes it's too 162 00:10:14,321 --> 00:10:18,237 steep, and sometimes it's, as you said, just a gradual rising 163 00:10:18,301 --> 00:10:19,200 of the prices? 164 00:10:19,200 --> 00:10:21,406 Stacey Vanek Smith: It's sort of like a, you know, like an 165 00:10:21,464 --> 00:10:24,774 ecosystem, the economy. And so sometimes in an ecosystem, 166 00:10:24,832 --> 00:10:28,258 balances change, right? Like, let's say one year it rains a 167 00:10:28,316 --> 00:10:31,916 lot, and so everything's kind of flooded, and there's a lot of 168 00:10:31,974 --> 00:10:35,284 water, and so the grass really grows, and all these weeds 169 00:10:35,342 --> 00:10:38,884 really grow. But then the next year it doesn't really rain at 170 00:10:38,943 --> 00:10:42,310 all, and so it's really dry and all the grass dies off. An 171 00:10:42,369 --> 00:10:45,562 economy is a little bit like that. So things are always 172 00:10:45,620 --> 00:10:48,640 changing. Inflation's always rising and falling. But 173 00:10:48,698 --> 00:10:52,298 sometimes things can get out of balance. So let's say it rains 174 00:10:52,356 --> 00:10:55,898 every day for a year, then we're all underwater. And that can 175 00:10:55,956 --> 00:10:59,615 happen in an economy too. Things can get really out of balance. 176 00:10:59,673 --> 00:11:03,331 And this happens for a number of reasons, but one of the things 177 00:11:03,389 --> 00:11:07,105 that can happen--so our economy got really out of balance during 178 00:11:07,163 --> 00:11:10,706 COVID, during the pandemic. And what happened was, for a long 179 00:11:10,764 --> 00:11:14,306 time, everything was shut down. A lot of us were in our homes 180 00:11:14,364 --> 00:11:17,383 all the time. That was really difficult for a lot of 181 00:11:17,441 --> 00:11:21,042 businesses. Like, if you have a pizza restaurant and nobody is 182 00:11:21,100 --> 00:11:24,468 coming to your restaurant, that's really hard. So it was a 183 00:11:24,526 --> 00:11:27,836 really strange moment. The government sent a lot of money 184 00:11:27,894 --> 00:11:31,494 out to people. Then people had extra money, so they started to 185 00:11:31,552 --> 00:11:35,210 spend that extra money, and that kind of pushed prices up, like 186 00:11:35,268 --> 00:11:38,810 you and me with our $5 at the candy store. So there was a lot 187 00:11:38,868 --> 00:11:42,294 of extra money in the economy, but it was because of COVID, 188 00:11:42,353 --> 00:11:45,895 which just messed everything up. It made everything go out of 189 00:11:45,953 --> 00:11:49,263 balance. And it was really hard in a lot of ways, but the 190 00:11:49,321 --> 00:11:52,979 economy was one of them. It was just a really strange kind of a 191 00:11:53,037 --> 00:11:56,695 shock that happened. And so that is a lot of why prices started 192 00:11:56,753 --> 00:12:00,295 to rise so much, and now it's really hard to get them to stop 193 00:12:00,354 --> 00:12:03,896 rising, because we're in, like, a little bit of a cycle. It's 194 00:12:03,954 --> 00:12:07,496 like we have all this momentum, you know, like, if you push a 195 00:12:07,554 --> 00:12:11,212 skateboard down a hill, it's a lot harder to stop it than it is 196 00:12:11,270 --> 00:12:14,754 to stop it if it's just on a flat surface. So our skateboard 197 00:12:14,812 --> 00:12:18,238 is going down the hill right now, and everybody's trying to 198 00:12:18,296 --> 00:12:20,039 stop it, but it's really hard. 199 00:12:20,039 --> 00:12:23,376 Jane: So I bet you're starting to understand that inflation is 200 00:12:23,436 --> 00:12:27,190 complicated. It can be kind of good if it's slow and in balance 201 00:12:27,250 --> 00:12:30,826 with how much money people have to spend, but kind of bad if 202 00:12:30,886 --> 00:12:34,462 it's too slow, or really bad if it's too fast and prices are 203 00:12:34,521 --> 00:12:38,038 rising higher than people can afford. One thing people keep 204 00:12:38,097 --> 00:12:41,614 talking about lately is the price of eggs and how expensive 205 00:12:41,673 --> 00:12:44,772 they are. Eggs are just one teeny, tiny piece of the 206 00:12:44,832 --> 00:12:48,587 economy, but they're something people eat a lot of, and they're 207 00:12:48,646 --> 00:12:51,805 seen as kind of a basic necessity. So when egg prices 208 00:12:51,865 --> 00:12:55,500 are really high, people like to use that as one example of an 209 00:12:55,560 --> 00:12:59,374 economy that feels out of whack. We don't really need to dig too 210 00:12:59,434 --> 00:13:03,129 deeply into this. But eggs are an interesting example, because 211 00:13:03,189 --> 00:13:06,824 sometimes the price of our food and other stuff we need, what 212 00:13:06,884 --> 00:13:10,102 are sometimes called basic commodities, is affected by 213 00:13:10,162 --> 00:13:13,559 things out of our control and outside of our government's 214 00:13:13,618 --> 00:13:17,075 influence. Like, with eggs, there's something called avian 215 00:13:17,135 --> 00:13:20,651 flu that's affecting a lot of chickens and other birds (and 216 00:13:20,711 --> 00:13:24,108 starting to affect cows and other animals as well). So if 217 00:13:24,168 --> 00:13:27,744 there are fewer chickens, that could mean fewer eggs. And if 218 00:13:27,803 --> 00:13:31,260 everyone still wants eggs, but there aren't as many, or it 219 00:13:31,319 --> 00:13:34,895 costs a lot more to produce them, the price of eggs is going 220 00:13:34,955 --> 00:13:38,650 to go up, and it's going to go up fast. That candy bar example 221 00:13:38,710 --> 00:13:42,226 is another good one. Climate change is making it harder for 222 00:13:42,286 --> 00:13:45,743 farmers in West Africa to grow cocoa, which is the base of 223 00:13:45,802 --> 00:13:49,199 chocolate. So prices are going up faster than normal. But 224 00:13:49,259 --> 00:13:52,299 chocolate isn't as much of a necessity as eggs are. 225 00:13:52,299 --> 00:13:56,211 We've got more of your economic questions coming up, like, 226 00:13:56,278 --> 00:14:00,460 what's the stock market and why do adults talk about taxes all 227 00:14:00,527 --> 00:14:04,709 the time? And we still need to figure out what are tariffs. So 228 00:14:04,777 --> 00:14:05,519 stay tuned. 229 00:14:05,519 --> 00:14:08,420 Jane: I'm Jane Lindholm. Today on But Why we're talking about 230 00:14:08,473 --> 00:14:11,533 money and the economy with business reporter and Bloomberg 231 00:14:11,586 --> 00:14:13,380 senior editor, Stacey Vanek Smith. 232 00:14:13,380 --> 00:14:16,886 Judah: Hi. My name is Judah. I'm 10 years old. I live in Los 233 00:14:16,953 --> 00:14:21,320 Angeles, California, and my question is, what is the stock market? 234 00:14:21,320 --> 00:14:23,825 Stacey Vanek Smith: The stock market is a big network. It is a 235 00:14:23,885 --> 00:14:27,644 little bit like being inside of a video game. It's like its own 236 00:14:27,704 --> 00:14:31,105 world. So let's say you're inside of this video game, and 237 00:14:31,164 --> 00:14:34,744 what everybody does in this video game is they buy pieces of 238 00:14:34,804 --> 00:14:38,622 companies. So a lot of companies are in this video game, all the 239 00:14:38,682 --> 00:14:41,844 companies that you know, probably. Big companies like 240 00:14:41,904 --> 00:14:45,484 Target or McDonald's or Walmart or Starbucks, they're all in 241 00:14:45,543 --> 00:14:49,243 this video game, and you can buy a piece of them. So let's say 242 00:14:49,302 --> 00:14:52,882 you really love the cookies at Starbucks. So you're like, "I 243 00:14:52,942 --> 00:14:56,522 think Starbucks is gonna sell a lot of these cookies. I love 244 00:14:56,581 --> 00:15:00,102 Starbucks. I believe they're going to grow. I want to buy a 245 00:15:00,161 --> 00:15:03,741 piece of it." So you go into this little network and you buy 246 00:15:03,801 --> 00:15:07,440 a piece of Starbucks, and you give them $10. Let's say that's 247 00:15:07,500 --> 00:15:11,378 how much it costs to buy a piece of Starbucks. So let's say a lot 248 00:15:11,438 --> 00:15:15,197 of people love their cookies. A lot of people are going to also 249 00:15:15,256 --> 00:15:18,180 buy a lot of pieces of Starbucks. So Starbucks is 250 00:15:18,240 --> 00:15:21,640 getting $10 from all these different people, and suddenly 251 00:15:21,700 --> 00:15:25,161 it has more money, and it opens more stores and makes more 252 00:15:25,220 --> 00:15:29,039 cookies and sells more cookies, and then Starbucks is worth even 253 00:15:29,099 --> 00:15:32,798 more money. So then your piece of Starbucks is also worth more 254 00:15:32,857 --> 00:15:36,437 money, because all of the pieces of Starbucks are worth more 255 00:15:36,497 --> 00:15:40,316 money. So that is how the stock market works. And people go into 256 00:15:40,375 --> 00:15:43,895 this world, into this video game, because there's a company 257 00:15:43,955 --> 00:15:47,296 that they think is gonna get bigger, a company that they 258 00:15:47,356 --> 00:15:50,996 think is gonna make more money, and they wanna buy a piece of 259 00:15:51,055 --> 00:15:54,695 it. And so you can be kind of a part of that company, as that 260 00:15:54,754 --> 00:15:58,275 company is growing and making more money, you can also make 261 00:15:58,334 --> 00:16:00,960 more money and you own a little piece of it. 262 00:16:00,960 --> 00:16:03,800 Jane: Another thing to know about the stock market is that 263 00:16:03,854 --> 00:16:06,967 the value of these pieces of companies tends to go up and 264 00:16:07,022 --> 00:16:10,354 down. It can be up one day and down the next, or up for a few 265 00:16:10,408 --> 00:16:13,576 months and then down for a while. So people who are buying 266 00:16:13,631 --> 00:16:17,072 and selling on the stock market are always trying to figure out 267 00:16:17,126 --> 00:16:20,294 what they think is going to happen next. They're trying to 268 00:16:20,349 --> 00:16:23,462 sort of predict the future so they can buy or sell at the 269 00:16:23,517 --> 00:16:26,794 right time to make money. But why should kids care about the 270 00:16:26,848 --> 00:16:27,559 stock market? 271 00:16:27,559 --> 00:16:29,857 Stacey Vanek Smith: Well, it's just that it's basically a whole 272 00:16:29,910 --> 00:16:33,063 bunch of big companies, and they're really important in our 273 00:16:33,117 --> 00:16:36,002 country. They're really important to our economy. They 274 00:16:36,056 --> 00:16:39,262 make a big difference in how many people have jobs, how much 275 00:16:39,316 --> 00:16:42,629 people get paid in those jobs, how stressed out people are. If 276 00:16:42,683 --> 00:16:45,836 people have a little extra money, they can enjoy themselves 277 00:16:45,889 --> 00:16:48,935 and go on vacation, or if they're really stressed out and 278 00:16:48,989 --> 00:16:52,302 have to cut back all the time and they're in debt. So we watch 279 00:16:52,356 --> 00:16:55,669 them, because the economy is so big and it's all around us, it 280 00:16:55,723 --> 00:16:58,822 can be hard to know what's happening in it. You know, it's 281 00:16:58,876 --> 00:17:02,243 like you're inside a video game. It's like, hard to know what's 282 00:17:02,296 --> 00:17:05,182 happening on the whole video game, but you take little 283 00:17:05,235 --> 00:17:08,602 indicators to try to figure out what's going on. And so the big 284 00:17:08,656 --> 00:17:12,023 companies are something people can watch, and they can track it 285 00:17:12,076 --> 00:17:15,336 every day to try to figure out what's happening in this whole 286 00:17:15,389 --> 00:17:18,436 network that's all around us. And so that's why everybody 287 00:17:18,489 --> 00:17:21,856 watches the stock market. So if you don't own stock, there's no 288 00:17:21,909 --> 00:17:24,902 need to stress about the stock market, but it's still an 289 00:17:24,956 --> 00:17:28,216 important thing in your life, because it affects this kind of 290 00:17:28,269 --> 00:17:30,140 ecosystem that we're all a part of. 291 00:17:30,140 --> 00:17:33,980 Jane: So Stacey, let's talk a little bit about taxes, because... 292 00:17:33,980 --> 00:17:34,520 Stacey Vanek Smith: -yes- 293 00:17:34,520 --> 00:17:37,426 Jane: They're something that adults think about a lot, and 294 00:17:37,482 --> 00:17:38,600 kids have questions. 295 00:17:39,020 --> 00:17:42,940 Naomi: My name is Naomi. I live in Everett, Washington, and I'm 296 00:17:42,940 --> 00:17:46,900 seven years old. What are taxes and why do we have to have 297 00:17:46,900 --> 00:17:47,920 taxes? 298 00:17:48,940 --> 00:17:54,155 Ben: Hi, my name is Ben and I'm five years old. Why do people 299 00:17:54,248 --> 00:17:55,180 pay taxes? 300 00:17:55,180 --> 00:17:58,873 Xavier: Hi, But Why. My name is Xavier, and I live in Sydney, 301 00:17:58,942 --> 00:18:03,332 Australia. I'm nine years old. Why does the government make you 302 00:18:03,402 --> 00:18:03,960 pay tax? 303 00:18:03,960 --> 00:18:06,440 Stacey Vanek Smith: So the best way that I can describe taxes, I 304 00:18:06,496 --> 00:18:09,540 think that taxes are like a deal that we make with the 305 00:18:09,596 --> 00:18:13,147 government. So, basically, the government is all around us--our 306 00:18:13,203 --> 00:18:16,529 country, and the government provides us with things: police 307 00:18:16,585 --> 00:18:19,573 to keep us safe, a fire department to keep our houses 308 00:18:19,629 --> 00:18:23,123 from catching on fire, roads so we can get places, parks so we 309 00:18:23,180 --> 00:18:26,562 can go play in the park. And those things cost money. And in 310 00:18:26,618 --> 00:18:29,944 order to pay for those, the government takes money from us. 311 00:18:30,000 --> 00:18:33,156 We pay that money. So the government takes all the money 312 00:18:33,213 --> 00:18:36,595 that we all pay, and it provides things for all of us. And I 313 00:18:36,651 --> 00:18:40,033 think the reason that people argue so much about taxes--this 314 00:18:40,089 --> 00:18:43,358 is one of the big things people argue about--is because we 315 00:18:43,415 --> 00:18:46,684 disagree over what this deal should look like. Some people 316 00:18:46,740 --> 00:18:49,953 say, well, we shouldn't pay very much, and the government 317 00:18:50,009 --> 00:18:53,279 shouldn't do that much, like maybe just the police and the 318 00:18:53,335 --> 00:18:56,830 fire department and maybe some schools and roads and done. And 319 00:18:56,886 --> 00:19:00,381 other people say, no, no, the government should do a lot more. 320 00:19:00,437 --> 00:19:03,988 It should put playgrounds in the parks and keep the playgrounds 321 00:19:04,044 --> 00:19:07,483 really nice. There should be snacks in school, and the snacks 322 00:19:07,539 --> 00:19:10,977 should be really nice. There should be music programs and art 323 00:19:11,033 --> 00:19:14,303 programs, and the government should be involved in helping 324 00:19:14,359 --> 00:19:17,515 create those, too. Or sometimes people think the way the 325 00:19:17,572 --> 00:19:20,954 government's spending money is not the right way. It's like, 326 00:19:21,010 --> 00:19:24,336 why are you spending money on playgrounds instead of school 327 00:19:24,392 --> 00:19:27,661 lunches? Or why is there a music program but not a theater 328 00:19:27,717 --> 00:19:31,156 program? And so this is what everybody's always arguing about 329 00:19:31,212 --> 00:19:34,425 about taxes. And it's a good thing to argue about because 330 00:19:34,481 --> 00:19:38,089 it's really the most basic thing that has to do with how we live 331 00:19:38,145 --> 00:19:41,020 and the relationship that we have with our country. 332 00:19:41,200 --> 00:19:45,580 Jane: How do we pay taxes? Not everybody pays exactly the same 333 00:19:45,580 --> 00:19:46,120 amount. 334 00:19:46,119 --> 00:19:48,747 Stacey Vanek Smith: That's true. It's different in different 335 00:19:48,812 --> 00:19:52,820 countries. In the US, we have different kinds of taxes, first 336 00:19:52,886 --> 00:19:57,025 of all, but the big tax that we pay is income tax. So depending 337 00:19:57,091 --> 00:20:01,099 on how much money you make, if you reach a certain level...If 338 00:20:01,164 --> 00:20:04,646 you're below that level, you don't have to pay taxes, 339 00:20:04,712 --> 00:20:08,391 usually. If you're above a level, then you have to pay a 340 00:20:08,457 --> 00:20:12,531 percentage of your income. So let's say, Jane, I make $100 and 341 00:20:12,596 --> 00:20:16,801 you make $200. Let's say the tax is 10%. So 10% of 100 is 10. So 342 00:20:16,867 --> 00:20:20,875 I am paying $10 in taxes every year. But you make more money. 343 00:20:20,941 --> 00:20:25,080 You are making $200 a year. Then you are paying $20 because 10% 344 00:20:25,145 --> 00:20:29,088 of 200 is 20. So then you are paying $20 a year in taxes. So 345 00:20:29,153 --> 00:20:33,161 that's how it works. So if you have more money, you're paying 346 00:20:33,227 --> 00:20:37,366 more in taxes, and if you make a little less money, then you're 347 00:20:37,432 --> 00:20:41,440 paying a little less in taxes. That's how it works in the US. 348 00:20:41,440 --> 00:20:44,815 Jane: Another type of tax you might come across as a kid is a 349 00:20:44,876 --> 00:20:48,559 sales tax. You might go to the store and decide to buy a toy 350 00:20:48,620 --> 00:20:52,241 that's $20. But when you go to the cash register to pay for 351 00:20:52,302 --> 00:20:56,168 your new toy, it costs a little more than that, because there's 352 00:20:56,230 --> 00:21:00,035 a tax added on top of the price of the toy. Why do many places 353 00:21:00,096 --> 00:21:01,140 have a sales tax? 354 00:21:01,140 --> 00:21:03,550 Stacey Vanek Smith: A sales tax is another way to make money. 355 00:21:03,609 --> 00:21:06,843 Not only does the federal government, the whole country 356 00:21:06,902 --> 00:21:10,665 government, have to raise money, but all the states that we live 357 00:21:10,724 --> 00:21:14,311 in have to raise money too. And so they will sometimes take a 358 00:21:14,369 --> 00:21:18,074 portion of our income taxes, but also they raise money in other 359 00:21:18,133 --> 00:21:21,543 ways, on houses--people pay property tax, but on sales tax 360 00:21:21,602 --> 00:21:25,306 too. So yeah, it's a way for the state to raise money, and then 361 00:21:25,365 --> 00:21:28,717 they use the money from sales tax to pay for all kinds of 362 00:21:28,775 --> 00:21:29,599 things for us. 363 00:21:29,599 --> 00:21:33,054 Jane: One of the things that we've been hearing a lot about 364 00:21:33,119 --> 00:21:37,161 in the news is something called a tariff. What is a tariff? Is 365 00:21:37,226 --> 00:21:40,160 it different than a tax? Is it a kind of tax? 366 00:21:40,160 --> 00:21:42,776 Stacey Vanek Smith: Tariffs are exactly that, a kind of tax. A 367 00:21:42,838 --> 00:21:46,265 tariff is a tax on something that was made in a foreign 368 00:21:46,327 --> 00:21:50,377 country. So let's say, Jane, you want to buy a scooter, and there 369 00:21:50,439 --> 00:21:53,990 are two scooters in the store. One of them is made in the 370 00:21:54,053 --> 00:21:57,791 United States, and one of them is, let's say, made in China. 371 00:21:57,853 --> 00:22:01,653 China makes a lot of the things that we buy. So let's say the 372 00:22:01,716 --> 00:22:05,516 scooter that was made in the United States cost $20. A lot of 373 00:22:05,578 --> 00:22:09,379 that's because, let's say it took one person one hour to make 374 00:22:09,441 --> 00:22:13,304 that scooter, and that person got paid $15 in an hour. So then 375 00:22:13,366 --> 00:22:17,104 the company will pay the person $15 and then it'll take that 376 00:22:17,167 --> 00:22:20,905 scooter to sell it. And they want to, you know, they want to 377 00:22:20,967 --> 00:22:24,580 make a little money on the scooter, so they charge $20 for 378 00:22:24,643 --> 00:22:25,640 it. That's fine. 379 00:22:25,640 --> 00:22:28,470 Jane: Companies will also have to account for the cost of the 380 00:22:28,522 --> 00:22:31,661 materials needed to build that scooter, and that's built into 381 00:22:31,712 --> 00:22:35,006 the price too. But the amount of money someone had to be paid to 382 00:22:35,057 --> 00:22:37,940 make that scooter varies widely from country to country. 383 00:22:37,940 --> 00:22:40,404 Stacey Vanek Smith: In China, people make much lower wages. 384 00:22:40,467 --> 00:22:44,259 People get paid less. So in China, let's say the worker gets 385 00:22:44,322 --> 00:22:47,672 paid $10 for making that scooter. Well then China can 386 00:22:47,735 --> 00:22:51,274 sell the same scooter. It can still make a little bit of 387 00:22:51,337 --> 00:22:55,382 money, let's say it charges $15. And then that means that if you 388 00:22:55,445 --> 00:22:59,173 go to the store and you're buying a scooter, the same exact 389 00:22:59,237 --> 00:23:03,218 scooter that took the same exact amount of time for a person to 390 00:23:03,281 --> 00:23:07,199 make will cost $20 if you get the scooter that was made in the 391 00:23:07,262 --> 00:23:11,244 US, or it will cost $15 if you get the scooter that was made in 392 00:23:11,307 --> 00:23:15,162 China. Well, you might want to save that $5 so you have candy 393 00:23:15,225 --> 00:23:19,206 bar money, so you will buy the cheaper scooter. Well, sometimes 394 00:23:19,270 --> 00:23:22,809 governments want to help out companies that are based in 395 00:23:22,872 --> 00:23:26,980 their own country. So then let's say the US says American scooter 396 00:23:27,043 --> 00:23:30,455 makers are complaining that they're not selling enough 397 00:23:30,519 --> 00:23:34,247 scooters. So we're going to charge a tax to all the Chinese 398 00:23:34,310 --> 00:23:38,165 scooters so that their scooters end up being $20 too. So it's 399 00:23:38,228 --> 00:23:41,957 the same price. Or maybe they're going to charge so much in 400 00:23:42,020 --> 00:23:46,128 tariffs they have to charge $25. So it's a way for governments to 401 00:23:46,191 --> 00:23:49,920 kind of protect companies in their own country. And we have 402 00:23:49,983 --> 00:23:53,964 to pay those taxes too. When we want to sell scooters to people 403 00:23:54,027 --> 00:23:56,619 in China, we have to pay those taxes too. 404 00:23:56,619 --> 00:24:00,385 Jane: Technically, when a tariff is placed on goods coming in 405 00:24:00,453 --> 00:24:04,699 from another country, it's not that other country's government 406 00:24:04,767 --> 00:24:08,671 who pays, and it's not even always the company that makes 407 00:24:08,739 --> 00:24:12,369 the product that pays. The tariff is paid by whatever 408 00:24:12,437 --> 00:24:15,930 company is bringing in that foreign made scooter or 409 00:24:15,998 --> 00:24:19,901 whatever. The company that brings it into the new country 410 00:24:19,970 --> 00:24:24,215 is called the importer. So it's often an American company that 411 00:24:24,284 --> 00:24:28,598 has to pay the tariff, not the, say, Chinese scooter maker. But 412 00:24:28,667 --> 00:24:32,775 it affects the Chinese scooter maker because those importers 413 00:24:32,844 --> 00:24:36,884 might not want to buy that scooter from China now that it's 414 00:24:36,953 --> 00:24:41,061 more expensive. While we're talking about a whole scooter as 415 00:24:41,130 --> 00:24:45,375 our example, sometimes it's not a whole anything at all that's 416 00:24:45,444 --> 00:24:49,758 getting taxed. It could be just one part of a scooter or car or 417 00:24:49,827 --> 00:24:53,867 the materials that are being used to build a house that are 418 00:24:53,935 --> 00:24:57,839 ultimately going to be put together in the United States. 419 00:24:57,907 --> 00:25:02,153 Also, once one country starts putting tariffs on products from 420 00:25:02,221 --> 00:25:06,056 another country, that other country might put tariffs on 421 00:25:06,125 --> 00:25:10,233 products coming from the first country. So if the US imposes 422 00:25:10,302 --> 00:25:14,684 tariffs on China, Canada, Mexico and Europe, all of those places 423 00:25:14,753 --> 00:25:18,314 might put tariffs on products--different products or 424 00:25:18,382 --> 00:25:22,149 the same ones--coming from the United States into their 425 00:25:22,217 --> 00:25:25,983 countries. Ultimately, it's often the person buying the 426 00:25:26,052 --> 00:25:30,503 product in the end, like you and I, who wind up paying the tariff 427 00:25:30,572 --> 00:25:33,859 or having fewer options for what we want to buy. 428 00:25:33,859 --> 00:25:37,907 The other thing that makes this all complicated is that 429 00:25:37,981 --> 00:25:42,251 sometimes governments use tariffs or the threat of tariffs 430 00:25:42,324 --> 00:25:46,888 as political bargaining tools that don't have all that much to 431 00:25:46,962 --> 00:25:51,747 do with the actual products that are going to get the tariff. And 432 00:25:51,820 --> 00:25:55,060 that's partially what's happening right now. 433 00:25:55,060 --> 00:25:57,298 Stacey Vanek Smith: This has to do with our relationship with 434 00:25:57,353 --> 00:26:00,793 other countries. So let's say we want to be friends with China. 435 00:26:00,848 --> 00:26:04,124 We have making a whole bunch of deals with China. China is a 436 00:26:04,179 --> 00:26:07,292 huge economy. It's really important economy in the world. 437 00:26:07,346 --> 00:26:10,459 And so we are bargaining with them about a whole bunch of 438 00:26:10,513 --> 00:26:13,298 things. And so part of the bargain, they want their 439 00:26:13,353 --> 00:26:16,520 scooters to sell really well in the US, and their scooters 440 00:26:16,575 --> 00:26:20,070 aren't selling very well because they're more expensive than the 441 00:26:20,124 --> 00:26:23,565 scooters made in the US. So you know, the US and China, they're 442 00:26:23,619 --> 00:26:26,896 making these big, fancy deals about all kinds of things. One 443 00:26:26,950 --> 00:26:30,227 of the things China might ask for in this deal is, "Hey, can 444 00:26:30,281 --> 00:26:33,667 you lower the tariffs? So can you lower these taxes so that we 445 00:26:33,722 --> 00:26:37,053 can sell our scooters for less money?" It's part of the deals 446 00:26:37,107 --> 00:26:40,548 that countries make. And so if you're friends with the country, 447 00:26:40,602 --> 00:26:43,715 then you don't want to charge them too many taxes. You're 448 00:26:43,769 --> 00:26:47,046 like, "No, no, we love you. We'll sell your scooters for the 449 00:26:47,100 --> 00:26:50,322 same price." And then they're, you know, that's what you do 450 00:26:50,377 --> 00:26:53,926 with your friends. But if you're not friends with them, if you're 451 00:26:53,981 --> 00:26:57,367 angry with them, or if you're in some kind of competition with 452 00:26:57,421 --> 00:27:00,534 them, maybe you'll say, "You know what? We're gonna put a 453 00:27:00,588 --> 00:27:03,865 huge tariff on everything so that now, like you're you won't 454 00:27:03,920 --> 00:27:07,141 be able to sell as many scooters in the US." So it's like a 455 00:27:07,196 --> 00:27:10,363 bargaining chip. It's like a deal that you make. So it's a 456 00:27:10,418 --> 00:27:13,749 way that you can reward your friends and punish people you're 457 00:27:13,803 --> 00:27:16,916 not friends with, or you're trying to, like, make them do 458 00:27:16,971 --> 00:27:19,920 what you want. Tariffs are a way that you can do that. 459 00:27:19,920 --> 00:27:24,227 Jane: One of the countries that the US has been talking about 460 00:27:24,306 --> 00:27:28,927 putting extra tariffs on is Canada. Canada is a neighbor of 461 00:27:29,005 --> 00:27:33,783 the United States, and generally Canada and the US are really 462 00:27:33,861 --> 00:27:34,880 good friends. 463 00:27:34,880 --> 00:27:35,360 Stacey Vanek Smith: Yeah. 464 00:27:35,360 --> 00:27:39,633 Jane: And Canada is the US largest trading partner. So why 465 00:27:39,715 --> 00:27:43,660 are we threatening to put new tariffs on Canada? 466 00:27:43,660 --> 00:27:46,295 Stacey Vanek Smith: Well, that's a really interesting question. 467 00:27:46,356 --> 00:27:49,911 So, President Trump wants to kind of shake up the way that 468 00:27:49,972 --> 00:27:53,833 tariffs have been done. So for a really long time, the way that 469 00:27:53,895 --> 00:27:57,449 things were going--this is basically ever since the end of 470 00:27:57,511 --> 00:28:01,065 World War II, when a lot of the countries in the world got 471 00:28:01,127 --> 00:28:04,865 together and said, "One of the ways that we'll make sure that 472 00:28:04,927 --> 00:28:08,604 we don't get into wars is if we're all trading a lot with no 473 00:28:08,665 --> 00:28:12,588 tariffs." It's just a way, like, well, if you have your friends, 474 00:28:12,649 --> 00:28:16,326 and you trade candy with your friends every day, you're less 475 00:28:16,388 --> 00:28:20,249 likely to get into a big fight with them, because you want your 476 00:28:20,310 --> 00:28:23,742 candy. So you get this big selection of candy every day, 477 00:28:23,803 --> 00:28:27,297 and you don't want that to stop. So even if you're mad at 478 00:28:27,358 --> 00:28:31,158 someone, you'll kind of brush it off or let it go, because you 479 00:28:31,219 --> 00:28:34,835 don't want to break up this candy alliance. What's going on 480 00:28:34,897 --> 00:28:38,513 right now is that President Trump wants to use tariffs as a 481 00:28:38,574 --> 00:28:42,496 way to make different deals with different countries and to kind 482 00:28:42,558 --> 00:28:45,806 of get his way on different issues. And so he's using 483 00:28:45,867 --> 00:28:49,667 tariffs. And the reason why is that in the US, we buy a lot of 484 00:28:49,729 --> 00:28:53,406 stuff, like, a lot of stuff, like, more than anybody else in 485 00:28:53,467 --> 00:28:57,206 the world buys. So people want to sell their stuff in the US, 486 00:28:57,267 --> 00:29:00,577 because we buy so much stuff. And so it's a pretty big 487 00:29:00,638 --> 00:29:01,619 bargaining chip. 488 00:29:01,619 --> 00:29:05,066 Jane: Canada and the US have a long history of working together 489 00:29:05,126 --> 00:29:08,513 on big issues, and we share a lot of cultural and family 490 00:29:08,573 --> 00:29:12,384 connections. That's true for the US relationship with Mexico as 491 00:29:12,444 --> 00:29:16,133 well. So even though tariffs are an economic bargaining tool, 492 00:29:16,194 --> 00:29:19,581 they can also feel very personal. We're putting out this 493 00:29:19,641 --> 00:29:23,270 episode on March 7, 2025 and a lot of this is still in flux, 494 00:29:23,330 --> 00:29:26,959 still changing, as we make the episode. So the news may have 495 00:29:27,019 --> 00:29:30,709 changed by the time you listen, but I hope you at least got a 496 00:29:30,769 --> 00:29:34,640 little bit of understanding now of what's being discussed if you 497 00:29:34,700 --> 00:29:38,450 hear talk about tariffs in the news. We didn't want to end our 498 00:29:38,510 --> 00:29:42,078 conversation with Stacey on tariffs though, so we threw her 499 00:29:42,139 --> 00:29:44,619 one more bonus question while we had her. 500 00:29:46,720 --> 00:29:51,853 Brooke: My name is Brooke. I'm from Morristown, New Jersey, and 501 00:29:51,946 --> 00:29:57,640 I'm nine years old. Why do we say like $19.99 instead of $20? 502 00:29:57,640 --> 00:30:02,062 Jane: Brooke is wondering, why do we say this thing costs 503 00:30:02,149 --> 00:30:08,220 $19.99 instead of $20. Why do we often have things that cost 99 cents? 504 00:30:08,220 --> 00:30:10,442 Stacey Vanek Smith: That is not because of anything in the 505 00:30:10,501 --> 00:30:14,186 economy. It's just a little bit of a brain trick that companies 506 00:30:14,244 --> 00:30:17,637 will play on us. Because, let's say I don't know, is there 507 00:30:17,695 --> 00:30:19,860 something that you want to buy, Jane? 508 00:30:19,860 --> 00:30:21,380 Jane: I want to buy a new board game. 509 00:30:21,380 --> 00:30:23,797 Stacey Vanek Smith: Okay, you want to buy a new board game. So 510 00:30:23,854 --> 00:30:27,135 let's say you go to the store and you're trying to decide 511 00:30:27,192 --> 00:30:30,472 between a couple of different board games. And one of the 512 00:30:30,530 --> 00:30:34,213 board games is $20 and the other one is $19.99. Essentially they 513 00:30:34,271 --> 00:30:37,666 cost the same amount, but the $19.99 one seems a little bit 514 00:30:37,724 --> 00:30:41,407 cheaper because there's a one at the beginning. And even though, 515 00:30:41,465 --> 00:30:44,918 logically, the difference is just a penny, in your brain, it 516 00:30:44,975 --> 00:30:48,486 just seems like a better deal, because our brains are kind of 517 00:30:48,543 --> 00:30:51,824 funny. It's like a little illusion in our brain, you know 518 00:30:51,881 --> 00:30:55,277 what I mean? So even if we know that trick is happening, it 519 00:30:55,334 --> 00:30:59,075 still works. I know that this is what companies do to make things 520 00:30:59,133 --> 00:31:02,528 seem less expensive than they are, especially a moment like 521 00:31:02,586 --> 00:31:06,154 now, when the prices are rising a lot, but I still fall for it 522 00:31:06,211 --> 00:31:06,960 all the time. 523 00:31:06,960 --> 00:31:10,226 Jane: Thanks to Stacey Vanek Smith for joining us today and 524 00:31:10,288 --> 00:31:13,862 helping us learn about money and the economy. She's been a 525 00:31:13,924 --> 00:31:17,622 business reporter for a long time, and she's a senior editor 526 00:31:17,683 --> 00:31:21,196 at Bloomberg News. We went through a lot in this episode, 527 00:31:21,258 --> 00:31:24,771 from inflation to the stock market to taxes. All of those 528 00:31:24,832 --> 00:31:28,592 things are really complicated, and there's still so much more 529 00:31:28,653 --> 00:31:32,043 to the economy than we could possibly cover in this one 530 00:31:32,105 --> 00:31:35,864 episode. So if listening to this gave you even more questions 531 00:31:35,926 --> 00:31:39,624 about how the economy works, talk to the adults in your life 532 00:31:39,685 --> 00:31:43,445 and maybe see if your school, or at least your middle or high 533 00:31:43,506 --> 00:31:47,019 school, has an investment club or classes about money and 534 00:31:47,081 --> 00:31:50,655 economics. With the help of Stacey, we put together a list 535 00:31:50,717 --> 00:31:54,168 of resources to help kids learn more about money and the 536 00:31:54,230 --> 00:31:58,051 economy. You can find it in the show notes and on our website, 537 00:31:58,113 --> 00:32:01,502 butwhykids.org. As always, if you have a question about 538 00:32:01,564 --> 00:32:05,323 anything, have an adult record you asking it. It's easy to do 539 00:32:05,385 --> 00:32:09,083 on a smartphone using an app like Voice Memos, then email it 540 00:32:09,144 --> 00:32:12,966 to questions@butwhykids.org We listen to every single question 541 00:32:13,027 --> 00:32:16,848 you send us. But Why is produced by Melody Bodette, Sarah Baik 542 00:32:16,910 --> 00:32:20,053 and me, Jane Lindholm, at Vermont Public, and we're 543 00:32:20,115 --> 00:32:23,874 distributed by PRX. Our video producer is Joey Palumbo. Check 544 00:32:23,936 --> 00:32:27,818 out our YouTube series, But Why Bites. We put out a short, bite 545 00:32:27,880 --> 00:32:31,824 sized video episode every other Friday. So if you can't wait for 546 00:32:31,886 --> 00:32:35,522 a new episode, try one of our video ones in between podcast 547 00:32:35,584 --> 00:32:39,467 ones. Our theme music is by Luke Reynolds. We'll be back in two 548 00:32:39,528 --> 00:32:42,980 weeks with an all new episode. Until then, stay curious!