ivonaecon

Exports minus Imports...

2007-05-15T07:46:00.000-07:00

This article is discussing the current standing of America's economy in relation to the dollar and the amount of exports. The article also explained why America's trade gap will narrow. A negative balance of trade is known as a trade deficit or a trade gap. A trade deficit occurs when a nation imports more than it exports. This was the case with America for the last decade. However, due to the fact that our dollar decreased in value we are now highly sought because with the exchange rate foreign countries are really getting a bang for their buck.

Since our products are being sought and wanted, we are exporting more. This increases our GDP as well as increasing domestic jobs, but most of all our trade deficit will go down. There is a lot of growth in the rest of the world and so there is a lot of demand for products to support these thriving nations. Vehicles, Diesel, Fast Food, earth moving equipment, shovels, factory machinery and digital components to build a modern telecommunications back bone are just some of the American made products being exported to nations abroad.

TaXes

2007-05-10T07:35:00.000-07:00

"I hold considerable property, and I pay more in imperial taxes than that man spends in whisky, which is saying a great deal, and yet I have no more direct influence upon the disposal of the money which I pay than that fly which creeps along the wall."
Beyond the City by Doyle, Sir Arthur Conan

A tax is a payment to the government that is required by the law. The IRS controls and maintains the taxes we pay. IRS is an acronym that stands for Internal Revenue Service. The IRS was created by former President Lincoln in 1862 to cover the expenses of the Civil War. The Internal Revenue Service sends out 8 billion pages of forms and instructions each year. Laid end to end, they would stretch 28 times around the earth. American taxpayers spend $200 billion and 5.4 billion hours working to comply with federal taxes each year, more than it takes to produce every car, truck, and van in the United States. We pay a lot of different types of taxes. Income tax is a tax placed on the earnings we make at work and is deducted from our paychecks. If you earn $10 per hour, it turns out that you actually earn only about $8.90 after taxes. The more money you earn, the more money is deducted from your paycheck. Taxes eat up 38.2% of the average family's income; that's more than for food, clothing and shelter combined. It is a lose lose situation.

...If our President wants to abolish poverty, he can do it by abolishing the IRS...

There are many people who commit tax frauds and fail to pay their taxes. However, in the end almost all get caught. A lot of people prefer to work off the books. With an off the books job, your employer does not report the fact that you are working and therefore no taxes are deducted from your earnings. Although you end up with more money in your pocket, social security is not being deposited for you when you retire. The money for Social Security is taken out on each check and is labeled FICA, which is an acronym for Federal Insurance Contributions Act. It is also close to impossible to find a good and serious job that pays you off the books. If you decide to go off the books chances are that you are not recieving and healthcare coverage from you company.

Corporations also pay income tax. We pay sales tax which is a tax on merchandise we are purchasing at a store. Sales tax varies from state to state. In New York the sales tax is 8.25%. My favorite week is tax-free week which comes twice a year. We pay taxes so the government can keep funding and spending on our country. Whether it is to improve education or increase our arsenal. During some years the amoutn of taxes Americans pay amount for 85% of the revenue for the federal government.

Here is a complete list of taxes Americans pay and a very disturbing fact on the bottom..

"Secondly, in their dealings with the State: when there is an income tax, the just man will pay more and the unjust less on the same amount of income; and when there is anything to be received the one gains nothing and the other much."
The Republic by Plato

Student Loans

2007-05-09T07:36:00.000-07:00

Culinary School Students take out such large loans to cover the expensive tuition. They coerce themselves into thinking that taking out large loans will be worth it in the end. Once they graduate from their prestigious expensive culinary schools they are expecting to secure a good position in a five star restaurant making a huge chunk of change...an ample amount to live off of and pay back. Student loans are convenient for instant necessity purposes, but in the long run they are an annoying pain in your backside. I am trying to stay away from taking out loans for my college education just because I dont feel like paying anything back when i start working. I just want to earn my money, cry over the taxes they took out and then spend it quicker than a New York minute. However, realistically speaking If it comes to having to take out student loans what can I do? I'm going to keep pushing it on my mother and grandparents.
If I take out loans I'd take out $6,000 per year so it would be roughly $24,000. I personally hate the reality of paying for school. I wish education was free. I believe it should be free and so the whole concept of paying for school frustrates me.

Why do you think some of these culinary school students took out such large student loans? What is your feeling on student loans? Do you plan on taking out any student loans? If so - for approximately how much?

Critique of Federal Reserve Podcast

2007-03-16T07:54:00.000-07:00

I am reviewing Ashely and Justin's podcast on the Federal Reserve. It was very in depth. It discussed the twelve branches, the FOMC, inflation, the responsibilities of the federal reserve and who created it and why it was created. The recording is audible, clear and listenable.

I really like how they put their pictures in the beginning. It made it very interactive and personal. They had great pictures that really illustrated what they were talking about and there was a lot of them too.

It was definately educational and I learned a bunch of facts my partner and I managed to miss.

Compound Interest & the Rule of 72

2007-03-15T12:09:00.000-07:00

Compound Interest is something to take advantage of. When you deposit money in an account, hedge funds or mutual funds your initial deposit (principal) earns interest. You earn the most interest if you invest in the stock market and the least with banks. Anyways, your principal earns interest and then the principal+interest earns more interest and so on and so forth.

Albert Einstein admires the rule of 72. The point of the rule is to find out how long it will take you to double your principal solely with the amount of interest you earn .The rule says that to find the number of years required to double your money you just divide the interest rate into 72. For example, if you want to know how long it will take to double your money at eight percent interest, divide 8 into 72 and get 9 years.

Insider Trading - What Happened?

2007-03-15T11:52:00.000-07:00

On March 1, 2007 a major insider trading scandal was uncovered. There were thirteen people involved, two from UBS and Morgan Stanley. All of the men were arrested and four pleaded guilty. They illegaly gained $8 million in profit from the security industry.

Insider Trading is illegal because it give an unfair advantage to people who have connections. When one tells another about their companies plans for say a merger, lay off or a new release it is connected to the value and performance of the company's stock. If I would hear from a friend who worked at Nokia that they were going to release this amazing phone that would be better than the iPhone, I could buy shares and earn a lot money. However, it is so illegal yet many choose to do it because it is so tempting. Knowing something private that will later be released to the public is an unfair advantage.

2007-02-28T07:46:00.000-08:00

Yesterday the dow jones dropped by 400 points. This immense drop made many stockholders anxious and obviously very upset because when the stock market goes down that means everyone is losing mo4ney. This affected me because the day before the market dropped, I invested $50,000 in my stocks. Everything that i bought is cheaper by a couple of cents to three dollars. This burns. It taught me to be cautious before investing, to be patient and most of all pay a lot of attention to other world markets that America depends on as well and that we invest in.

Opportunity Cost

2007-02-27T07:47:00.000-08:00

An opportunity cost is the cost of something in exchange for a loss of an opportunity elsewhere. For instance if you decide to lease a car you end up with a brand new car.

However, if you decide to lease you also know that you will never own the car and be able to change it up or alter it nor will you be able to sell it in the future or give it to your kids. If you decide to buy a car you get the pleasure of knowing you own it, but after four or five years you're stuck in a five year old car while some people are driving around in new flashy cars. It's an oppurtunity cost.

In my personal life I spend $2.50 on Fiji water a day as opposed to spending $1 on Poland Spring. This gives me no advantage, just an easy way to lose money by foolishly spending it. I have no oppurtunity costwhat so ever.

Types of Economic Systems

2007-02-16T07:34:00.000-08:00

A traditional Economy is dominated by methods and techniques that are strongly supported socially wise, but are out of date and old fashioned. Resources are inherited. A traditional economy is environment friendly, fosters the sense of community. However, there is no competition and technology is limited.

A Command Economy is planned and controlled by a central administration. The government dominates the direction in which the economy will go, but the people own the means of production. A command economy is found in a communist country or even sometimes in a capitalist nation in a state of emergency.

A Market Economy is the complete opposite of a command economy. A market economy works on supply and demand. There are barely any government interventions or price fixing. Production, Exchange and Distribution is controlled by private corporations and individuals. Capitalist economies are market economies which are also known as free market economy.

A mixed economy is an economy that has a mix of economic systems. It contains both private owned and state owned enterprise. America's economy is a mixed economy. You have plenty of freedoms such as to hire, fire, protest but there are restrictions such as the Sherman anti-trust law.

Socialism is a cooperative society in which the means of production are owned collectively by the people or the government.

Test

2007-02-02T07:56:00.000-08:00

Hi there! If you're reading this that means I did everything right!!
:)