Taxes-How Does the Government Spend Money?

The US government spends our tax dollars by helping us out with our everyday society. The Federal Government spends tax money on Police & Fire Protection which is $2,169,
K-12 Education which is $9,232, Public Welfare which is $6,758, Health & Hospitals which is $4,939, Higher Education which is $4,527, Governmental Administration which is $1,940, Highways which is $2,765, Housing,Community Development,Sewerage,Solid Waste which is $2,684, Natural Resources,Parks & Recreation which is $1,604, Interest on General Debt which is $1,844, Correction which is $1,355, Police & Fire Protection which is $2,169, and Other things which is $4,544. So the total cost of everything is $44,360

Savings and Debt

Well my first reaction towards the article is that I already know that millions of Americans are in debt,and very bad debt to be exact. It's not that anyone I know of is in debt,it's just that every time I seem to turn on my t.v. I always see a commercial about someone being in debt and needing help to get out of it. People get into debt so easily because they usually splurge on things and run up on avoidable penalties which would cause them to get into more debt or higher interest rates. Finance charges can be dangerous now because there has been a growth of credit with low rates extending to even the least reliable risk and in 2006, the industry mailed out nearly 8 billion credit card offers, up from 3.5 billion in 2000. In this chart






















it shows how the US is declining in it's savings rate and how high it was from the 1980's to the 2000's. Americans don't save money anymore because there has been changes in federal regulations since the 1980s, along with consolidation in the banking industry and changed consumer attitudes toward borrowing and saving, which have made credit more widespread, more heavily marketed and more confusing. Also,at the same time, banks have moved from fixed interest rates to variable rates, so they can have the ability for borrowers to move their balances from one card to another, or from credit cards to lower-interest home equity loans, can have as much impact on their finances as whether they get a raise or trim household expenses. So with home values being increased and interest rates being dropped, home equity loans have enabled families to carry more debt but however to buy more things at lower cost. As you can see the US savings rate is well below those of Japan,UK,Germany, and Italy.

US Trade Deficit - Getting Better?

The article is discussing how American companies have been doing business abroad for a long time, and how it has never before been so important. A trade deficit is a large trade gap between America and foreign countries. The US trade deficit is likely to go down because a number of American workers have lost their jobs as companies moved more business overseas,so there is always the risk that the dollar could suddenly plunge and set off a global economic crisis.The kind of products that the US sells overseas are oil,vehicles, equipment and diesel engines,factory machinery, and construction and mining equipment. A weak dollar is actually providing a strong lift for the US economy and the trade deficit because t he exchange rate difference stokes profits from earnings generated abroad, countering the adverse effects on importers who must pay more and Americans traveling abroad with a less valuable currency in their wallets.

Taxes - How Does The Government Get Money?

The different types of taxes that Americans pay is Federal Income Tax, State Income Tax, City/Local Income Tax, Social Security, Medicare, and Deductions .

• Federal Income Tax: Taxes taken out of a paycheck that go to the federal government.

• State Income Tax: Taxes taken out of a paycheck that go to the state government.

• City/Local Income Tax: Taxes taken out of a paycheck that go to the city/local government. Explain that not everyone pays city or local taxes; it depends on where you live and work.

• Social Security: Withholdings that go into the federal government program that provides income support to people who are unemployed, disabled, or over the age of 65.

• Medicare: Withholdings that go into the federal health insurance program for people 65 and older, and also for people with disabilities.

• Deductions : This is an investment account that is used for retirement. Income paid to this account is tax-deferred, which means that taxes generally are not paid until retirement. Sometimes the employer also makes contributions to this account, and they are also tax-deferred.

Student Loans-Beware

I think that the culinary school students took so out such large student loans because since the culinary training can cost more than other kinds of schooling with the classrooms being small with equipment and ingredients that are expensive but basically because they often come from blue-collar backgrounds and do not have financial experience to navigate world of college costs. My feelings toward student loans is that they are good for when you really don't have the money to pay for your supplies such as books and extra classes that are needed but on the other hand if you take out too many,you will be left with about $20,000 or more that you will need to pay back as soon as possible to the school and that will take probably 20 or more years. But i know I will be taking out loans because I know I won't have money to pay everything because I'm not rich. :)

Compound Interest and the rule of 72

Well today in class we learned about compound interest. Although it is some what confusing to me,basically it is the amount of money you make over the years depending on the amount of interest a company makes. Over the years your deposit increases with the interest itself. Like for example, if you initially deposit $100 and the interest rate of the company is 10%, in a year then your money will increase to $100(1+ .02) (1+ .02) (1+ .02) (1+ .02) (1+ .02)= $108.24 in the next year. So each year your money will increase with the annual percentage rate.

Insider Trading Scandal - What Happened?

Well,there was a large Insider Trading network that broken up on Wall Street on March 1st.The 13 people who was charged with the trading schemes included employees at major Wall Street banks,a UBS Securities executive,Bank of America Securities representative, and a former Morgan Stanley attorney.The prosecutors said that the people are accused of security fraud, wire fraud, bribery, selling information about upcoming analyst upgrades and downgrades, giving out information about mergers and acquisitions.allocated shares of initial public offerings and secondary offerings to a hedge fund, Q Capital, for cash kickbacks.So far the prosecutors said that all 13 people had been arrested, and four had pleaded guilty.