Investing 101

1. STOCK



This tag shows ownership of a personal object when attached to it just like stock shows ownership in a corporation.

2. BOND



Promise rings symbolize a promise made to another just like bonds are a promise to repay a loan by a certain date.

3. PRIMARY/SECONDARY MARKET



In a primary market, security is purchased from the issuer but in a secondary is not bought directly from the issue just like in  a garage sale where things aren't bought from the original store they were sold in.

4. BULLS/BEARS



Bulls view things in a glass half full way while bears see it in a glass half empty sort of way.

5. Selling Short



When people rent homes, they don't own them but are basically "borrowing" them, just like when borrowing a security from a broker.

6. Franchise



Subway is a franchise and I work for subway!

7. Underwrite/Underwriter/Going Public:



Like a security guard, it is "insuring" someone or something and making it safer for the issuer to issue a security.

Manifesto 2.0

1. The government ought to be involved in the lives of tax payers to the extent of placing a steady or fixed tax rate that allows the economy to grow and prosper yet allows tax payers to live comfortably and be content with how much they are having to pay and the fairness of the tax system. "Without the power to raise taxes, governments would likely be weak, mostly symbolic institutions" (Flat Tax Packet). They need to have the power to do these things but shouldn't overdo it to the point that the people are angry with the government.

2. A majority of the revenue that the federal government collects comes from individual income(46% comes from this category alone). Another huge portion of the money is coming from what we pay for social security and social insurance. The last 20% or so comes from three other categories but they are obviously a lot smaller in what they contribute. I think that the way it is set up now is probably more beneficial for the government but it seems unfair that so much is coming from the income of individuals. I think that it should be more evenly dispersed.

3.It seems like the federal government spends a lot of money on Medicare/Medicaid, Social Security, and the Defense Department. I think that those are all important categories that the government needs to spend more money on though. I think defense spending and social security could possibly be balanced more equally because it is important for our country to have necessary supplies and defense available in case something were to happen. However, they are already pretty close and only trailing Medicare and Medicaid by a few percent so I think it is okay how it is.

4.One of the choices that I made regarding the Federal Budget was to spend $30 billion dollars in order to repair and modernize the nation's public schools. I think this is an important thing for our country to do because there are many public schools that lack the resources that they need in order to supply their children with a proper education and prepare them for universities and colleges in the future. Children need to have access to newer technology that will prepare them for changes that will come about in our society and in future jobs that they find themselves in. Also, I chose to cut $852 B by adjusting defense spending levels and deficit projections based on the anticipated outcome in the current defense plans. I don't feel like we need to increase the debt even more for defense because war isn't really something that I support or agree with. Another cut I chose to make was gradually changing the Medicare eligibility age from 65 to 67. I don't think many people would be happy with this but it would cut $125 B and it isn't as drastic as some of the other changes.

5.

http://www.sodahead.com/united-states/should-we-spend-more-money-on-bombs-or-books/question-1126435/

I chose this image of protesters fighting the spending of money on war when that money should be used for making the US education system better. I think that by educating the younger generations in America and making sure that they have the resources that they need in order to get the best education possible, we are helping out our nation and turning it into a more educated and self-sufficient place. Also, since this is about lowering the national debt, I believe more money towards education will make younger generations smarter towards economic problems and since they will be the ones leading the nation in the future, educating them is a smart thing for us to do. If they know more, they are also more capable of putting in their input on how to lower the debt and make the government more efficient once they are at an age that they can do that.

Taxes

"Value-Added Tax"

PRO: A VAT is easier to enforce than a national sales tax. It is possible that using a Value-Added tax would simplify business and personal income tax laws. It could be put in place of other types of taxation and also reduce the costs of tax compliance. It might to be able to eliminate tax returns as well. A VAT has the possibility of reducing or replacing an income or corporate tax. The tax is passed through the supply chain and each participant has an incentive to look for reimbursement opposed to charging the customer 10 percent and leaving the rest of the supply chain without charging a VAT. It makes no sense to cheat the tax because the punishment outweighs the benefits so using a VAT leads to less ax fraud.

-"But it's conceivable that a VAT could finance the lowering of corporate tax rates, substitute for raising personal income tax rates at the top or to take some people off the income tax roles."

CON: It entails higher administrative costs. A Value-Added tax might increase the cost of food and other necessities. Medical care might increase in price as well and people with less money will have a harder time. It is hard for some European Union leaders to actually apply the Vat laws. The middle class and poor will have a hard time with VAT because a larger proportion of their income will go into goods and services. The VAT is less flexible and potentially discourages consumption.

-"But I remain resolute: a VAT will not cure the budget and tax ills plaguing this country."

*I oppose a VAT because it increases medical care which is a major problem in our country.

"Flat Tax"

PRO:
People with more money who are potentially more successful are not being "punished" for making more money. Everyone would be taxes the same amount so there wouldn't be complaints from people who make more having to suffer because they "worked harder", saved more, etc. A flat tax is simple and it would encourage people to invest more money. People who really can't afford the higher taxes since it would increase for them could end up being completely exempt from paying taxes if they met the requirements which would benefit them. With a flat tax, it would be much easier for everyone to calculate their taxes each year and all complex loopholes in the tax system would disappear.

-"No matter how much money you make, what kind of business you are in, and whether or not you have lobbyists in Washington, you will be taxed at the same percentage as everyone else."


CON:
Lower income families and individuals will have to pay just as much as the rich and middle class therefore having a bigger burden on them. These families will not be eligible for all of the reductions that they are currently eligible for. There are concerns of a flat tax leading to a real-estate crash since the interest that people pay on their mortgages would be exempt when that deduction is eliminated. Homes would most likely depreciate in value. People will no longer get tax deductions for making charitable donations.

-"And why should the manager of a billion dollar hedge fund get her 20% piece of the profits tax free, while the people who deliver sandwiches to her have to pay tax on their salary and tips?"

*I support the Flat Tax because it is a fair and simple way to tax everyone in an equal and just way.


"National Sales Tax"

PRO: A National Sales tax would repeal income tax and others taxes as well. The Internal Revenue Service would end and lower income families could receive some kind of rebate if they were not being taxed under the current system. We would no longer be paying federal income taxes and things like Social Security and Medicare. It is estimated that personal savings would increase as well as investments. There would be higher production rates and higher wages.

-"If we want to create more jobs and grow our economy, the best thing we can do is to scrap the IRS and the current tax code and replace it with a simple, fair system."

CON: Switching from the current tax system to one that is consumption-based like the National Sales tax would pose many issues regarding transitioning. Lower and middle-class families would pay a much higher percentage of their earnings than those of a higher income bracket. Homeowners would be paying no taxes on their property while those who are renting would be paying taxes each month. People in high income brackets would receive a tax reduction while lower income families and individuals would end up much more in sales tax and other things. The tax burden would shift onto less-wealthy states. Elderly tax payers would suffer because they would have to pay a second tax once in retirement.

-"...on average, 80% of Americans in the middle- and lower-income ranges would pay as much as 51% more in sales tax than they currently pay under the income tax system."

*I oppose a national sales tax because only taxing based on consumption leaves a lot of room for inequality in certain areas that are not dependent on ownership of goods and property as well.

"Progressive Tax"

PRO: People who make less money have less of a burden because they have to pay less in taxes compared the the wealthy. Wealthy people are better equipped to pay and therefore it isn't that big of a deal if they contribute more. Allowing lower and middle-class tax payers to keep a larger portion of their income would benefit the economy more because they would most likely be spending that money. If the wealthy have to pay more each year it is only because they are making more money, much of which comes from investments, and therefore they are more capable of paying.

-"By not taxing higher-income earners at a high enough rate, supporters argue, the United States is shortchanging its own citizens of the benefits that could be gained from that money."

CON: The tax rate rises as the person max more money which is bad for high-income people. The use of a progressive federal income tax discourages economic growth. If wealthier people pay less taxes, they can start new businesses, invest in things, and take financial risks which would improve the economy. It is a lot more complicated than a flat tax system. When tax payers calculate taxes, it is a lot harder than if they were calculating for a flat tax. It is unfair to those who have worked very hard to get where they are and earn what they do if they get "punished" for it by having to pay more taxes.

-" 'We're running out of rich people to tax', Reynolds adds, noting that the current economic downturn cannot be fixed 'by taking the few surviving millionaires into oblivion' ".

*I oppose the progressive tax because it is unfair to those who work hard and make more money since they have to pay more taxes.

"The Big Picture"

“Knowing what you now know about the national debt, taxation and the Federal budget- what advice would you give to the President’s economic advisers as you look ahead to being a taxpaying citizen for the next several decades? Consider your long term economic outlook- What should the President do in terms of the budget for your generation's economic prospects?"

     I think that as someone who plans on working in the medical field as a physician or in some other well-paid job, I won't really appreciate having to pay more taxes than people who do not make as much. If I work hard for my money and spend years training to become successful in my field, but then have to pay more in taxes because of it, I just don't think it is completely reasonable. I think the president needs to find some way to make this more fair. 

    I don't understand exactly why so much of the taxpayers money has to go to the government when in the article it specifically said that the money that taxpayers give up couldn't even begin to slow down the ever increasing national debt and even if the amount of taxes that citizens have to pay increased, it would not help the debt let alone reduce it at all. If i am going to be paying taxes for "the next several decades," I don't want to be working so hard and having more money taken away when people who may have not worked as hard can be exempt. The president's economic advisers should do something about that!

The Sequester

The sequester seems to be pretty much disliked by most people and involves the federal budget. The government knows that it needs to cut back on spending and handle the growth of the US national debt which consists of trillions of dollars and is increasing every second. CNN describes it as "a fiscal doomsday device" but it also says that some people are in favor of it because it is a chance for "real savings and deficit reduction". I think even if it leads to some savings, the debt will still be huge and I'm not sure it will really even make a dent in the national debt or the growth of the debt.

Ways the sequester is used is cutting money from many different departments. For example, 500 billion dollars will be cut from the defense department while the rest will be cut from other things. According to an ABC News article, the sequester has been in debate for over a year and when it will happen and how exactly has been discussed and argued by many people. It is designed to be carried out over 10 years and will end up being 1.2 trillion dollars! It seems sort of like a temporary fix but I don't know how it will really go because the national debt in rapidly increasing.

In a Washington Post article about the sequester, they say that the sequester was supposed to happen at the beginning of this year. The cuts should have already taken place but they still haven't. I believe this is because it the US wasn't ready to make the move because it would have thrown us into a recession. The cuts, if they ever happen will be evenly split between domestic and defense functions. Obama apparently wants the sequester replaced and would replace it with an increase in taxes. This probably doesn't make  a lot of people happy either. In general, there is a ton of debate over the pros and cons and people have many different points to how the sequester should be carried out.

Manifesto Beta Version

I think the government plays a huge role in many things that make up how our society is run and how everything functions as a whole. Isn't that why we have a government in the first place? I think taxes are an important thing that the government needs to regulate. There wouldn't be another way to regulate them in terms of having the people in the society choose how taxes work because then they wouldn't want to pay them. The government has to make rules so that they can be enforced and followed by citizens. As for businesses, I don't think the government needs to step in quite so much. The consumers in the market place will decide if a business remains or goes under depending on whether they use their resources or purchase from them. As for defense spending and veteran affairs, the government needs to be involved in that because they play a key role in determining whether they send troops, the relationships with other nations, weapon development, etc. Foreign aid should probably be controlled by the government because they are the ones with the records and keep in contact with foreign nations. The government is important but I think it works best when it works around the needs of the people.

Economics Research Project 2013

SWEATSHOPS

https://docs.google.com/presentation/d/13t-qZoNx_AqFr4-SaIih3N08TVSuuVZ4Z7fVo8C-gU8/edit#slide=id.p

Supply Wrap Up

Supply Schedule and Curve

         $                                  #S

4	5
5	10
6	15
7	20
8	25

      

Inelastic Supply

Elastic Supply

Supply Schedule with Increase and Decrease

         $                      #S     +S -S

4	5	10	0
5	10	15	5
6	15	20	10
7	20	25	15
8	25	30	20

Demand Reflection

http://vocaroo.com/i/s1otJIEDmVRj

Central Question and Annotated Bibliography

What are some of the positive and negative effects of sweatshop use in third-world countries?

1) "International Labor Rights Forum." International Labor Rights Forum. N.p., n.d. Web. 12 Mar. 2013. <http://www.laborrights.org/>.

There are millions of children around the world who are working full-time to help support not only themselves but their families as well. It is estimated that there are 211 million children from the ages of 5 to 14 that are working. Of those, about 120 million are working full-time. Sweatshops and child labor or most predominant in places in the south but can even be found in the USA. Third- world countries are taken advantage of because larger corporations in the US can gain cheap labor by using other countries and can take advantage of a lack of worker protections. The children in third-world countries that work in sweatshops are unable to go to school and the wages are very low so it is very hard to support themselves and their families. The use of sweatshops in third-world countries is made possible because of the lack of labor law enforcement in these places.

The information found in this source can easily be used to to demonstrate the negative effects of the sweatshop model and the use of children for cheap, forced labor. It advocates standing up to make a change and shows donation sites and ways to help. The International Labor Rights Forum gives the names and links to campaigns that raise awareness about sweatshop use and it tells of specific companies and corporations that partake in using them. This source will help see the negative side of forced labor and the use of sweatshops and it helps explain the ways that people can help and end the problem. The information from this website will be used to explain the negative aspects of using sweatshops and child labor.

2) "Analysis: Are 'sweatshops' an economic necessity?" CNN Wire 6 Feb. 2012. Student Edition. Web. 12 Mar. 2013. <http://go.galegroup.com/ps/i.do?id=GALE%7CA279144911&v=2.1&u=ttsd&it=r&p=STOM&sw=w>

Some people don’t think sweatshops are completely horrible and should be shut down. The term sweatshop generally aligns with the definition of “factories or workshops characterized by low wages, long hours, underage workers and unsafe conditions.” However, there are some liberal economic workers that say that sweatshops a necessity in order to help some of the world’s poorer economies like third-world countries. Some people in third-world countries have no other alternatives for work and find that a sweatshop is the only way for them to have any income at all to support their families and themselves. Many people find that they are willing to work for almost nothing because it beats the alternative of literally making nothing at all. In China alone, 600 million people were able to escape poverty with the help of sweatshops. Even though the working conditions are not phenomenal, people still stood in line for a job in the new Foxconn plant.  

The information in this article is helpful because it explains sweatshops from the other side of things opposed to in a negative view like the International Labor Rights Forum. Since my central question asks about both the positive and negatives of sweatshop use, it is beneficial to use because it talks about how they are not very desirable but they are an important thing for many people to be a part of. It is hard to imagine how or why people would want to work in a plant or sweatshop but this article rationalizes the reasons and the effects of them. It gives me good points to bring up to discuss other opinions. It also will help to rationalize the use of sweatshops in different and unexpected ways.

3)  Norberg, Johan. "The Noble Feat of Nike." JohanNorberg.net. N.p., 7 June 2003. Web. 18 Mar. 2013. <http://www.johannorberg.net/?page=articles&articleid=53>.

Nike is a company that sells their shoes for 100 times more than wages of their workers in third-world countries. There are many protesters in the US that refuse to purchase goods from Nike because of this reason. However, in places such as Vietnam, the workers don’t view their lower wages opposed to the US as demeaning or a problem at all. Nike has four times as many workers in Vietnam than in the US and many of them are grateful for their jobs. One one makes an average of $54 per month which is three times for than the minimum wage for state-owned enterprises. People are grateful for their jobs working for Nike because it keeps them out of the harsh weather where they would be working on farms for 10-14 hours a day. Many employees in Vietnam have access to free subsidised meals, medical care, training and education which are other benefits of working for the company. Many people feel lucky because when working for an American Multinational Company opposed to a domestic company in a low-income country because on average, they are making eight times the average income.

This article explains the positives of sweatshop use which I will need in order to answer part of my central question. It explains things in a positive manner which makes the use of sweatshops in third-world countries seem more desirable even with the low wages and poor conditions. The information is specific enough for me to use to explain that the use of sweatshops is not always as monstrous as it sounds. It is a good source due to the fact that it is an opposing view to what most other articles about sweatshops consist of. It is easy to understand and has good numbers and statistics that make the information more believable and accurate. It doesn’t deny that they are bad in some places but it shows the greater side of things as well.

Demand Wrap-Up

PART 1:

1. UTILITY
- The usefulness that a good or service provides
-A car provides transportation for people to get to work, school, etc.

2. COMPLEMENTARY DEMAND
-If the demand of an object increases, then the demand of an item that is usually bought with it will increase as well.
-If people start buying more cereal, they will start buying more milk.


3. SUBSTITUTE DEMAND
-If an item can easily replace a product that is more expensive, the cheaper product will show an increase in demand.
-If apple juice becomes way to expensive, people may buy more orange juice.

4. ELASTIC DEMAND
-When the price of a product increases and the demand for it decreases due to the price change.
-If chocolate milk were 20 dollars per jug, people would stop buying it.


5. INELASTIC DEMAND
-If the price increases, the demand for a product stays the same because it is irreplaceable.
-Even if cell phones became much more expensive, people would still buy them because they need to communicate with others.


PART 2:
A.

B.

PART 3:
A.

B.

"Changes in the Demand Environment"

Task #1: Consumer Income (Increase)

When consumers find that they have an increase in income, they tend to have more spending money and will therefore cause the demand of some objects to increase. More specifically  it will cause the demand of objects to increase if they were too expensive and too much of a luxury when consumer income was low. An example of a product with this kind of demand is Starbucks Coffee. If consumers don't have money, they will make their own coffee at home. However, when their income increases, they will be able to purchase more expensive coffees from places like Starbucks.

Task #2: Consumer Tastes

When consumer tastes change for a certain product, the demand will change as well. For example, at the moment, gluten-free bread and other products are very popular and there is a high demand for them. If gluten-free bread were to suddenly become unpopular or something new were to replace it, then consumer tastes would change and we would see a decrease in demand for the product. Whatever product made the gluten-free products unfavorable would then see an increase in demand and gluten-free products would lose profit. 

Demand Headlines

1. Complementary: "Justin Timberlake purchases some new cufflinks to go with his suit and tie."

2. Substitute: "Banana consumption in monkeys has decreased since they are now all eating kiwi."

3. Elastic Demand: "Girl scout cookie sales drop due to a change in price of $40 a box."

4. Inelastic Demand: "Price of medicine doubles but people are still lining up for a bottle of Dayquil."
     
     When people get sick they look to relief in any way they can. Usually, this results in consumers buying medicinal products and short term relief from the symptoms of their cold, flu, stomach ache, etc. Even if prices reach an all time high, people won't stop getting sick and therefore will not stop buying medicine. People are willing to invest a little more of their money towards relief from their sickness and think it is a valuable enough thing to spend money on. Since consumers often need to continue on with their lives even if an illness gets in the way, spending money on things like Dayquil, Tylenol, and Sudafed is something that people will do no matter the cost because the loss they would experience if the were unable to work due to the symptoms of being sick would be more costly then spending on a bottle of medicine.

"Demand and Utility"

In the next week, I expect to exhibit economic demand for:
1. Gas-so that I can get to school, the gym, and the store
2. Gym membership-in order to be healthy and improve my fitness
3. Rat food-since my neighbor needs me to take care of her rat and adopt it

"Markets"

I think that a market economy is a great thing for a country to take advantage of. By using a market economy, individuals in the community are the ones who are making most of the major economic decisions. Everything is based on what they choose to consume and the things that they decide to spend their money on. If people are spending a lot of money on a certain type of jacket, then companies will start producing more of these jackets and will work to make them nicer and better priced. A problem with a market economy is that not everyone's need in the society do not get provided for (such as very young and very old people who may need help or assistance from the government). In general, I think this system is a good and successful way to control the economy and let society decide how they want to make decisions about products and services.

Opportunity Cost Blog

Last week when I was still a little bit sick, I had to decide whether or not I wanted to go to the gym and workout. I chose to stay home because I was coughing and I had some homework. Because I decided to stay home, I ended up eating way too many cookies and had tons of chips and mango salsa (my favorite). Since I ate so much, I felt extrememly sick and my stomach hurt all night. If I had gone to the gym, I wouldn't have eaten so much junk food and I would be more fit and healthy. I should have gone to the gym.

Scarcity

Money is a scarcity in my life since I am jobless at the moment. Being jobless is stressful because money is needed to do basically anything. Money buys necessities and is important for going out and having fun with friends.