Mychele's Economics Page

Taxes-How Does the Government Spend Money?

2007-05-28T20:10:00.000-07:00

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

2007-05-22T07:46:00.000-07:00

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?

2007-05-17T08:23:00.000-07:00

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?

2007-05-11T17:41:00.000-07:00

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

2007-05-09T16:45:00.000-07:00

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

2007-03-26T08:07:00.001-07:00

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?

2007-03-19T07:38:00.000-07:00

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.

Dow down 416 points-Why?

2007-03-02T18:03:00.000-08:00

The Dow Jones went down because of a computer glitch which triggered the sudden plunge in the industrial average at mid-afternoon Tuesday, turning an already bad day in stocks into a head-turning spectacle. Dow Jones & Co., the media company that manages the well-known index of 30 blue chip stocks, said it discovered shortly before 2 p.m. that its computers weren't properly handling the day's huge volume in trades at the New York Stock Exchange.It switched to a backup computer, and the result was a massive swoon in the index as the secondary system took over processing shortly before 3 p.m.The Dow plunged about 200 points almost instantly, and was down as much as 546 points _ its worst single-session decline in more than five years, and one that sent the blue chips into negative territory for the year.It didn't really compare to the other declines such as the Great Depression and 9/11 because it wasn't that serious. I don't know if or how it really affected my stocks but since the prices went down I might go buy some more stocks!.

Opportunity Costs

2007-03-02T17:15:00.000-08:00

Well,I think what economists mean when they talk about opportunity costs is that they or anyone will have to make a decision and will have an effect from that decision either a good one or a bad one. For example,earlier this week I had went to sleep at about one o'clock doing probably nothing because I couldn't go to sleep. Instead of me going to sleep at my regular time,I had an opportunity cost which was being very tired the next day in school. So believe me,I will never do that again for no reason,unless I have homework of course.

Types of Economics Systems

2007-03-02T16:30:00.000-08:00

A traditional economy is an economic system in which resources are allocated by inheritance, and which has a strong social network and is based on primitive methods and tools. It is strongly connected to subsistence farming. In the majority of countries traditional economy has been replaced by command economy, market economy or mixed economy. However, it is found today mainly in underdeveloped, agricultural parts of South America, Asia, and Africa.

A centrally planned economy is an economic system in which the state or government controls the factors of production and makes all decisions about their use and about the distribution of income. In such an economy, the planners decide what should be produced and direct enterprises to produce those goods. Planned economies are in contrast to unplanned economies, i.e. a market economy, where production, distribution, and pricing decisions are made by the private owners of the factors of production based upon their own interests rather than upon furthering some overarching macroeconomic plan.

A market economy is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system rather than by the state in a planned economy. In a market economy businesses and consumers decide what they will produce and purchase, as opposed to a planned economy where the government decides what is to be produced and in what quantities.

A mixed economy is an economy that has a mix of economic systems. It is usually defined as an economy that contains both private-owned and state-owned enterprises or that combines elements of capitalism and socialism, or a mix of market economy and command economy.There is not one single definition for a mixed economy, but relevant aspects include; a degree of private economic freedom, including privately owned industry, intermingled with centralized economic planning, which includes intervention for environmentalism and social welfare, or state ownership of some of means of production.

The difference between communism and socialism is that communism is a political, social, and economic system in which the state, governed by an elite party, controls production, labor, and distribution, and, largely, the social and cultural life and thought of the people, and socialism is a political movement advocating or associated with a theory or system of social organization by which the major means of production and distribution are owned, managed, or controlled by the government (state socialism), by associations of workers (guild socialism), or by the community as a whole.

Stock Market Game-1-Initial Investment Strategy

2007-03-02T15:44:00.000-08:00

The stocks that I am considering is the really big companies like apple or mcdonald's or nike. I guess I will by a lot like 15 or something. I don't really know because I haven't ever bought a stock or had anything to do with stocks so it's just all new to me and I don't even know really where to start. I think I'm going to be risky and conservative because like I said I'm new to this . But other than that, I'm just going to try to get as much money as possible so I could beat Mr.Moloney and get a 100 for my grade!.

Test

2007-02-02T07:59:00.001-08:00

Test