Economists believe a lot of things that are patently untrue...
Here's a whopping C+P from something I linked to earlier today on a different thread:
Economists are trained to believe that "money" is to the economy what "energy" is to the physical world. This leads them to believe that whatever is "economically" possible is "physically" possible too. What economists fail to realize is that the economy is a subsystem of the physical system, and thus constrained by universal physical laws that they have not studied.
Economists do not know that something must be physically possible before it can be economically possible. Since they only study money, they have no idea where the physical limits, and thus, economic limits are.
Since economists study the prices of everything, they feel they are qualified to issue opinions about everything. But the reality is quite the opposite. Economists first abstract all commodities to money -- which of course, obliterates all physical differences between the commodities themselves. This leaves economists uniquely unqualified to know the physical relationships between the commodities they purport to study. Because of their total dependence on the measure of "money", today's leading economists do not know the difference between "libraries" and "oil":
Obviously, the economics taught by Samuelson and Nordhaus has nothing to do with science. [[10]] If it isn't science, it's ideology. Since economics has a political agenda, it becomes nothing more than politics in disguise.
The economist's political agenda is pretty simple: establish a global self-regulating economic system. In order to convert economic students into lifelong politicians, they are programmed via circular argument and "post hoc, ergo propter hoc" (after-the-fact) reasoning to believe the most flagrant violations of reality. Consider five of the most outrageous.
#1. Economists are trained to believe that people are "rational utility maximizers" (calculate decisions according to "Bayes' Theorem"; i.e., Bentham's old "Felicity Calculus" in a new bottle). Although this belief was common one hundred years ago, only economists are still taught it: "Neoclassical economics is based on the premise that models that characterize rational, optimizing behavior also characterize actual human behavior." (R. Thaler, 1987). This premise was shown to be false several years ago. [[11]] Thus, the entire modern economic edifice is nothing but junk!
#2. Economists are trained to believe that "money" has nothing to do with politics and is simply a medium of exchange. But even the casual observer can see that money is social power because it "empowers" people to buy and do the things they want -- including buying and doing other people: politics. Money is, in a word, "coercion", [[12]] and "economic efficiency" is correctly seen as a political concept designed to conserve social power for those who have it -- to make the rich, richer and the poor, poorer.
#3. Economists are trained to believe that people always "benefit" from free market transactions. Nobel Prize-winning economist Milton Friedman explains: "Adam Smith's key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit." [[13]]
Since economists do not explicitly define "benefit", one wonders how Friedman could possibly know? In fact, he doesn't. Friedman is brainwashing his students to further his own personal political agenda. Economic professors like Friedman resort to meaningless, circular arguments to turn his students into robotic broadcasting devices.
Economists assume people make "rational" [[14]] decisions but abstain from testing that assumption. Instead of testing, economists invoke "revealed preferences theory" which states that choices are rational because they are based on preferences that are known through the choices that are made. [[15]] In other words, meaningless, circular arguments.
#4. Economists are trained to believe there are no "limits to growth". Because they abstract everything to money, even leading economists like William Nordhaus can't imagine an economy that is physically limited by energy. The best Nordhaus can do is to model increasing energy prices:
"The estimate is based on an energy model I constructed several years ago. To estimate the drag on economic growth, I calculated the difference between the economic growth rate with actual energy supplies versus a case in which current (low cost) fuels were available in infinite quantities. In the first case, energy prices would be rising, while in the second case of superabundence, relative energy prices would be constant. This study indicated that the resource-limited case would lower net output in the middle of the next century by about 10 percent."
Although Nordhaus thinks he is modeling "energy", he is actually modeling "energy prices". There is a big difference! What would have happened if he had modeled declining energy inputs instead of rising energy prices? We already know the answer to that one! (see above post from Bernie)
#5. Economists are trained to believe that we will never "run out" of a commodity. This is because as prices increase, we will use less-and-less of it, but there will always be some available at some finite price. Practically every economics textbook teaches this. But every economics textbook is wrong because "energy" is fundamentally different from every other commodity. There is no substitute for energy. Energy is the prerequisite for all other commodities, so if we "run out" of energy, we will "run out" of everything else too.
By definition, energy "sources" must produce more energy than they consume, otherwise they are called "sinks". By definition, energy sources have "run out" when they consume more energy than they produce. This universal energy law holds no matter how high the money price of energy goes. Economists completely overlook this basic energy law and have misled government regulators all over the world.
Here is part of an interview with Nobel Prize-winning economist Milton Friedman (worth quoting at length because of his colossal stupidity):
Ravaioli: But there are many other environmental problems ...
Nobel Laureate Friedman: Of course. Take oil, for example. Everyone says it's a limited resource: physically it may be, but economically we don't know. Economically there is more oil today than there was a hundred years ago. When it was still under the ground and no one knew it was there, it wasn't economically available. When resources are really limited prices go up, but the price of oil has gone down and down. Suppose oil became scarce: the price would go up, and people would start using other energy sources. In a proper price system the market can take care of the problem.
Ravaioli: But we know that it takes millions of years to create an oil well, and we can't reproduce it. Relying on oil means living on our capital and not on the interest, which would be the sensible course. Don't you agree?
Nobel Laureate Friedman: If we were living on the capital, the market price would go up. The price of truly limited resources will rise over time. The price of oil has not been rising, so we're not living on the capital. When that is no longer true, the price system will give a signal and the price of oil will go up. As always happens with a truly limited resource.
Ravaioli: Of course the discovery of new oil wells has given the illusion of unlimited oil …
Nobel Laureate Friedman: Why an illusion?
Ravaioli: Because we know it’s a limited resource.
Nobel Laureate Friedman: Excuse me, it's not limited from an economic point of view. You have to separate the economic from the physical point of view. Many of the mistakes people make come from this. Like the stupid projections of the Club of Rome: they used a purely physical approach, without taking prices into account. There are many different sources of energy, some of which are too expensive to be exploited now. But if oil becomes scarce they will be exploited. But the market, which is fortunately capable of registering and using widely scattered knowledge and information from people all over the world, will take account of those changes...
From
http://dieoff.org/page185.htm 
