Ronald Regan
once said, “Government’s view of the economy could be summed up in a few short
phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops
moving, subsidize it”. I feel like Ronald Regan is completely correct. I can’t
even count on my fingers how many different kinds of things are taxed and how
many different regulations are placed on the economy. Isn’t America supposed to
be operating on a FREE market economy? The government should have a limited
role in our economy and their main priorities should be to create jobs and
stimulate the economy. Also, they need to simplify the tax codes and tax
brackets in a couple different ways. And most importantly, they need to quit spending
more money than they have. Our deficit is $15 trillion and counting, and we
need to be conscious of that and every move that we make should be to help lower
it.
I believe
that the government should allow the free market economy to operate with a
minimal amount of restrictions in order to stimulate economic growth for the country.
First, the government should have some role in either increasing or decreasing
interest rates to help slow or stimulate the economy because interest rates
have a lot to do with how much money people borrow and spend from the
government. However, there needs to be some laws and regulations put in place
so people can be protected from what happened during the Great Depression but
still allow for free enterprise and investing. I think the government meddles
too much in our lives, and should just let us do what we want. However, like I
said earlier, there needs to be some regulations in place, but if they’re
controlling so much of our lives, how are we supposed to thrive in our economy
and lives? It’s not really a free market economy if we’re not free from a
million different silly regulations. Ultimately, I think creating more jobs and
stimulating economic growth are the most important things, and the government
should really focus on that first before other less important things.
I believe
that the government should restructure our tax code and system. First, people
should be encouraged to become entrepreneurs and start their own businesses
because that is what stimulates the economy. There should be specific tax
deductions in the new and improved tax code that lay this out and benefit those
people who started their own companies, and hired more people. This will help
with job growth, which will in turn lead to more people paying taxes because
there are more people employed which would be money that’s going directly to
the government. Not to mention, there will be more goods and services that are
provided to the economy which only betters it. America was founded on having a ‘free’
and capitalistic economy, so we need to encourage people to still strive for
that. I also believe that the tax brackets in the existing system need to be
altered. Right now, there are 6 tax brackets, ranging from 10%-35%. I believe
that we should lessen these brackets to 5 and start at a lower percentage
because that would ‘catch’ more people that are currently not paying taxes.
Also, there are a lot of unnecessary deductions that should be taken out of the
tax code, for example having a second home. We should bring in deductions for
starting your own business, and remove a lot more of the ones that aren’t
needed so there are more taxes being paid. Not only would this better the
economy, but it would also lower the percentage of taxes by a little that
people are paying. The people would like this because they’re paying less, but
there is more people paying the taxes so it’s still revenue neutral.
Ultimately, I believe that we should still keep the progressive (income) tax,
but eliminate some deductions and add a deduction for entrepreneurs, and
restructure the tax brackets.
I believe
that it is the government’s ultimate responsibility to spend the money that the
tax payers have given them wisely. The key word being WISELY. There should be
an annual statement that is given to each and every tax payer explaining
exactly where THEIR tax money has been spent in the past year. Not their
neighbors tax money, but theirs. I think that this would open a lot of people’s
eyes to where their tax money, that they so graciously handed over to the
government, has been spent on. Also, if this were to be put in place the government
couldn’t spend the money on ridiculous things because it’s going to be written
down somewhere, handed to someone, and how do you think that tax payer is going
to react when they find out their money was spent on a new sofa for the White
House? Probably not the greatest. In other words, this would help sort of force
the government to go on a diet, and quit spending money that they obviously don’t
have. The United States is $15 trillion in debt for heaven’s sake, so the government
needs to cut back. I think one way of doing this is to reduce the size of our
military presence overseas. This would save the United States a significant
amount of money that was originally being contributed to our national debt.
Also, although people hate taxes, if taxes were raised, or more evenly distributed
amongst the population then that could lower the debt as well. There are a lot
of ways that the government can cut back on their spending; they just need to
do it. All of these decisions that they’re making is impacting all of us for
the rest of our lives, so they obviously need to do something about it. Overall,
the government should hand out statements for where they spent the taxpayer’s
money, and cut back on spending as much as possible but focus more on our
presence overseas.
In
conclusion, the government needs to put fewer regulations on the economy in order
to produce a thriving market, restructure the tax code and tax brackets, and
significantly decrease their deficit spending. As stated in the previous
paragraphs, there are multiple ways, in my opinion, to achieve these three
tasks. All of us tax payers and people who are old enough to vote really need
to pay attention to what’s going on around us in the world. We need to care. This
isn’t just affecting our parents. We’re going to be paying taxes soon and all
of this is going to be on our generation’s shoulders, and then it will move
onto our kid’s shoulders. The government and the economy are very complicated,
and they work together to create the world that we live in, so we should all
have our own beliefs and judgment’s and what we believe is the best way to achieve
the things we want to get out of life.
Tuesday, January 17, 2012
Monday, January 9, 2012
GM is for Government Manifesto
First, I believe that the US government should structure the tax code to encourage people to become entrepreneurs. There should be specific tax deductions for companies who start their own business, and hire people. This will help in job growth, which in turn will have more people paying taxes, which is more money that will go to the government. Also, these businesses will stimulate the economy by providing different kinds of goods and services for the people who live there.
Interest rates have a lot to do with how much money people borrow and spend, so the government should have some role in either increasing or decreasing interest rates to help stimulate or slow the economy. In turn, there needs to be some laws and regulations put in place so people can be protected from what happened during The Great Depression but still allow for free enterprise and investing. Generally, the government should allow the free market economy to operate with a minimal amount of restrictions in order to stimulate economic growth.
It is the governments ultimate responsibility to spend the money they have been given by the taxpayers wisely. There should be a statement given annually to each individual taxpayer showing how THEIR tax money has been spent. This would open a lot of people's eyes to how the government is handling their funds that they entrusted them to use. Also, if this were to happen the government couldn't spend tax payer money on things that aren't needed because it's written down on a piece of paper where all the money was spent. One way that I believe that the US could lower the nation debt is by hiring a group of people to determine where there is unnecessary spending and eliminate it.
Interest rates have a lot to do with how much money people borrow and spend, so the government should have some role in either increasing or decreasing interest rates to help stimulate or slow the economy. In turn, there needs to be some laws and regulations put in place so people can be protected from what happened during The Great Depression but still allow for free enterprise and investing. Generally, the government should allow the free market economy to operate with a minimal amount of restrictions in order to stimulate economic growth.
It is the governments ultimate responsibility to spend the money they have been given by the taxpayers wisely. There should be a statement given annually to each individual taxpayer showing how THEIR tax money has been spent. This would open a lot of people's eyes to how the government is handling their funds that they entrusted them to use. Also, if this were to happen the government couldn't spend tax payer money on things that aren't needed because it's written down on a piece of paper where all the money was spent. One way that I believe that the US could lower the nation debt is by hiring a group of people to determine where there is unnecessary spending and eliminate it.
Sunday, November 13, 2011
MP is for Market Price
To whom it may concern,
Living in the United States, I already knew a lot about Market Price before we started this unit. I knew that the supply and demand had to meet perfectly in the middle for that to determine market price, or the market equilibrium. What I didn't know about was price floors and ceilings, which is where the government comes in and places the market price either above (floor) or below (ceiling) the regular market price to control the economy and keep it going steady. That was probably the only thing that I wasn't familiar about when it comes to market price in this unit. One question I would have is, is there anything else like floors or ceilings that we didn't learn about? And do consumers ever get angry at the floors and ceilings that the government places?
Here we go real life examples. As you know, I work in the student store, so I have to set the prices for all the snacks there. I need to find a good market clearing price for all our products. It needs to match the demand of the customers and we need to supply the correct amount as well. Classic example of market price. One real world example of a price floor is a minimum wage job. The government purposefully places the market price (minimum wage) higher, so they can bring in more profit, and so businesses have to pay you that amount, and no less. An example of a price ceiling is a rent control apartment in New York. Obviously if the government wouldn't lower the market clearing price, then only about 1% of the population could live there because it's so expensive. So the government lowers the price so that more people can live there. However, then the demand for those apartments rises, which creates another problem.
As you can see, market price is a fairly simple idea, but it can come with some complicated examples. But we will always need it to run the economy though!
Living in the United States, I already knew a lot about Market Price before we started this unit. I knew that the supply and demand had to meet perfectly in the middle for that to determine market price, or the market equilibrium. What I didn't know about was price floors and ceilings, which is where the government comes in and places the market price either above (floor) or below (ceiling) the regular market price to control the economy and keep it going steady. That was probably the only thing that I wasn't familiar about when it comes to market price in this unit. One question I would have is, is there anything else like floors or ceilings that we didn't learn about? And do consumers ever get angry at the floors and ceilings that the government places?
Here we go real life examples. As you know, I work in the student store, so I have to set the prices for all the snacks there. I need to find a good market clearing price for all our products. It needs to match the demand of the customers and we need to supply the correct amount as well. Classic example of market price. One real world example of a price floor is a minimum wage job. The government purposefully places the market price (minimum wage) higher, so they can bring in more profit, and so businesses have to pay you that amount, and no less. An example of a price ceiling is a rent control apartment in New York. Obviously if the government wouldn't lower the market clearing price, then only about 1% of the population could live there because it's so expensive. So the government lowers the price so that more people can live there. However, then the demand for those apartments rises, which creates another problem.
As you can see, market price is a fairly simple idea, but it can come with some complicated examples. But we will always need it to run the economy though!
Sunday, October 23, 2011
S is for Supply
To whom it may concern,
After learning about demand, we swiftly moved onto the topic of supply, which only took us two days to cover. I already knew a lot about supply because of working in the student store, and all my other previous business classes. The only topic that I didn't know that much about was elastic and inelastic supply because we didn't go over that in any of my other classes. However, learning about the elasticity of supply made me understand the concept of supply even more because of what I had already learned before.
In this unit we learned all about supply (obviously), the law of supply, elasticity of supply, and the change in supply at each and every price. And ultimately how supply differs from demand. First, supply is basically just how much a product is supplied at each price. The law of supply is the opposite of the law of demand. In supply, as the prices go up, the quantity supplied also goes up because the business person has more of a motivation to sell it because they're getting more profit. So obviously if the price is $100 compared to $10, the business is going to supply more product at $100 because they're going to make more money out of it. The elasticity of supply is basically the same thing as the elasticity of demand. An elastic product is something that factories can produce in bulk, so they're very flexible if they ever need to produce a lot more because of the tastes of consumers. An inelastic product is something that factories can't produce in bulk. It's a product that takes a lot of steps to make, and if consumers all of a sudden demand more of them, it's very hard to produce them faster because they're just not made to work that way. The last thing we talked about with supply, was the change in supply at each and every price. This idea is relatively the same as demand, with the curves moving in toward zero and away towards zero, and the factors that control those. I'll talk about this more later when I give real life examples, because it's easier to explain.
So one example I wanted to give was for the elasticity of supply. First of all, an elastic example would be like when there's two football teams in the Superbowl, both businesses/factories can produce a ton of hats, socks, shirts etc. with the winning team name on it for both sides. So then when one of the teams wins, they have all those products already ready to go, while they just ship the losing teams' products elsewhere. An example of inelastic supply is like the iPhone. Think about it, it takes a lot of work and labor to make one iPhone. There's all kinds of machines that help out in the production and whatnot. So, they can only produce a certain amount at any given speed, so if they run out in the stores, it's going to take a while to completely restock again. This happened in Corvallis when the new iPhone 4S came out. It sold out within 2 hours of opening! An example of CISAEAEP is if a new machine comes out that produces buttons faster, then the company will be able to have a larger quantity of buttons at the same price which would shift the demand curve outwards. There are lots of real life examples like this, and lots of differing factors that can shift the supply curve either outwards or inwards. Where the supply and demand curve meet is called the equilibrium, or market price. Hypothetically, at the end of the day you should sell out of your product at that given price, and have no more people who want to buy it, but we all know that never really happens. For example, in the student store, we're constantly restocking all of our snacks so we never run out. We take inventory and price accordingly, but always restock at the end of each week. If we had to restock earlier than one week, then we know that we're not supplying enough because the demand of the product is higher than we expected!
After learning about demand, we swiftly moved onto the topic of supply, which only took us two days to cover. I already knew a lot about supply because of working in the student store, and all my other previous business classes. The only topic that I didn't know that much about was elastic and inelastic supply because we didn't go over that in any of my other classes. However, learning about the elasticity of supply made me understand the concept of supply even more because of what I had already learned before.
In this unit we learned all about supply (obviously), the law of supply, elasticity of supply, and the change in supply at each and every price. And ultimately how supply differs from demand. First, supply is basically just how much a product is supplied at each price. The law of supply is the opposite of the law of demand. In supply, as the prices go up, the quantity supplied also goes up because the business person has more of a motivation to sell it because they're getting more profit. So obviously if the price is $100 compared to $10, the business is going to supply more product at $100 because they're going to make more money out of it. The elasticity of supply is basically the same thing as the elasticity of demand. An elastic product is something that factories can produce in bulk, so they're very flexible if they ever need to produce a lot more because of the tastes of consumers. An inelastic product is something that factories can't produce in bulk. It's a product that takes a lot of steps to make, and if consumers all of a sudden demand more of them, it's very hard to produce them faster because they're just not made to work that way. The last thing we talked about with supply, was the change in supply at each and every price. This idea is relatively the same as demand, with the curves moving in toward zero and away towards zero, and the factors that control those. I'll talk about this more later when I give real life examples, because it's easier to explain.
So one example I wanted to give was for the elasticity of supply. First of all, an elastic example would be like when there's two football teams in the Superbowl, both businesses/factories can produce a ton of hats, socks, shirts etc. with the winning team name on it for both sides. So then when one of the teams wins, they have all those products already ready to go, while they just ship the losing teams' products elsewhere. An example of inelastic supply is like the iPhone. Think about it, it takes a lot of work and labor to make one iPhone. There's all kinds of machines that help out in the production and whatnot. So, they can only produce a certain amount at any given speed, so if they run out in the stores, it's going to take a while to completely restock again. This happened in Corvallis when the new iPhone 4S came out. It sold out within 2 hours of opening! An example of CISAEAEP is if a new machine comes out that produces buttons faster, then the company will be able to have a larger quantity of buttons at the same price which would shift the demand curve outwards. There are lots of real life examples like this, and lots of differing factors that can shift the supply curve either outwards or inwards. Where the supply and demand curve meet is called the equilibrium, or market price. Hypothetically, at the end of the day you should sell out of your product at that given price, and have no more people who want to buy it, but we all know that never really happens. For example, in the student store, we're constantly restocking all of our snacks so we never run out. We take inventory and price accordingly, but always restock at the end of each week. If we had to restock earlier than one week, then we know that we're not supplying enough because the demand of the product is higher than we expected!
Thursday, October 13, 2011
D is for Demand
To whom it may concern,
Demand is quite an interesting topic. I learned a lot about it in Intro to Business, Marketing 1 and 2, and Advanved Business Procedures. Outside of school, I learned about demand just by being an active consumer in our society. I understood the point of a bargain, and buying more of an item if it is priced at a lower price than usual. I also learned all about demand through my ABP class because I'm in charge of snacks at the student store, but I'll talk about that later when I give REAL LIFE EXAMPLES!!!!!!
In Economics this year, we talked about demand, the law of demand, price effect, demand curves, demand schedules, elasticity and inelasticity of demand, and environmental factors. Whew, that's a lot huh? Demand is basically the desire and or willingness consumers have to buy a certain product. I learned about the boundaries of demand by explaining my dream car and house, which I soon realized was not practical because I'm pretty much the only person who demands that. Next, we talked about the law of demand which basically says the higher you price an item the lower the demand is going to be, and visa versa. I already knew this because if a tank top is $3 compared to $12, obviously more people are willing to buy it at $3. After understanding that concept, we drew lots of pictures of demand curves, making the price the y axis and the quantity demanded the x axis. The demand schedule is a just a table of the demand curve. One column is the price and the other column is the quantity demanded. Due to the law of demand, the demand curves are always sloping downward. After learning all of that we talked about elastic and inelastic demand. Elastic demand is when the price of a product goes up or down, then the consumers buy either less or more of that product. An example of this would be like a fruit roll-up, because if the price goes dramatically up, then people are going to stop buying them, because there are a lot of other products that could substitute for a fruit roll-up, and it's also not necessary for life. Inelastic demand is the exact opposite. That's when if the price of a product goes up or down, generally people are still going to buy the same amount of said product. For example, if the price of milk all of a sudden got drastically low, no one is going to buy a ton of milk because it would go bad. And if the price went way far into the clouds, people still need, so they're still going to buy the same amount. LASTLY, we learned about how environmental factors can change the demand for a certain product. One of the environmental factors was income, so if your income all of sudden goes up, there's going to be a higher demand for basically everything because everyone has more money to spend on products. Another environmental factor was population, so if there was another baby boom, then obviously the demand for diapers, baby food, baby formula, etc. would raise a ton.
Now for connections with the real world. Well, I've already given several examples in my last paragraph, but I'm willing to enlighten you with more of my knowledge. One thing I haven't talked about already are complementary and supplementary products. Complementary products are products that go together, so the demand for both products rises and falls together. An example of this is hot dogs, hot dog buns, napkins, paper plates, chips, soda, etc. Supplementary products are products that come hand in hand, so either one or the other, and the demand for each is like a scale. An example of these kinds of products are tea and coffee, so if all of a sudden there's a shortage of coffee beans, then more people are going to start buying tea as a substitute for the lack of coffee. Also, I learned a lot about demand through my ABP class. I'm in charge of all the snacks at the student store. I have to take inventory of all my products at the end of each week so I know what kinds of products are being sold and which aren't. Then I have to decide why they are either selling or not selling. Some has to do with what the cafeteria sells (SUPPLEMENTARY demand) and some has to do with pricing, which I'm sure is our next lesson in class. Okay that's enough, I'm sure you've learned enough about demand, because I know I sure have!!
Demand is quite an interesting topic. I learned a lot about it in Intro to Business, Marketing 1 and 2, and Advanved Business Procedures. Outside of school, I learned about demand just by being an active consumer in our society. I understood the point of a bargain, and buying more of an item if it is priced at a lower price than usual. I also learned all about demand through my ABP class because I'm in charge of snacks at the student store, but I'll talk about that later when I give REAL LIFE EXAMPLES!!!!!!
In Economics this year, we talked about demand, the law of demand, price effect, demand curves, demand schedules, elasticity and inelasticity of demand, and environmental factors. Whew, that's a lot huh? Demand is basically the desire and or willingness consumers have to buy a certain product. I learned about the boundaries of demand by explaining my dream car and house, which I soon realized was not practical because I'm pretty much the only person who demands that. Next, we talked about the law of demand which basically says the higher you price an item the lower the demand is going to be, and visa versa. I already knew this because if a tank top is $3 compared to $12, obviously more people are willing to buy it at $3. After understanding that concept, we drew lots of pictures of demand curves, making the price the y axis and the quantity demanded the x axis. The demand schedule is a just a table of the demand curve. One column is the price and the other column is the quantity demanded. Due to the law of demand, the demand curves are always sloping downward. After learning all of that we talked about elastic and inelastic demand. Elastic demand is when the price of a product goes up or down, then the consumers buy either less or more of that product. An example of this would be like a fruit roll-up, because if the price goes dramatically up, then people are going to stop buying them, because there are a lot of other products that could substitute for a fruit roll-up, and it's also not necessary for life. Inelastic demand is the exact opposite. That's when if the price of a product goes up or down, generally people are still going to buy the same amount of said product. For example, if the price of milk all of a sudden got drastically low, no one is going to buy a ton of milk because it would go bad. And if the price went way far into the clouds, people still need, so they're still going to buy the same amount. LASTLY, we learned about how environmental factors can change the demand for a certain product. One of the environmental factors was income, so if your income all of sudden goes up, there's going to be a higher demand for basically everything because everyone has more money to spend on products. Another environmental factor was population, so if there was another baby boom, then obviously the demand for diapers, baby food, baby formula, etc. would raise a ton.
Now for connections with the real world. Well, I've already given several examples in my last paragraph, but I'm willing to enlighten you with more of my knowledge. One thing I haven't talked about already are complementary and supplementary products. Complementary products are products that go together, so the demand for both products rises and falls together. An example of this is hot dogs, hot dog buns, napkins, paper plates, chips, soda, etc. Supplementary products are products that come hand in hand, so either one or the other, and the demand for each is like a scale. An example of these kinds of products are tea and coffee, so if all of a sudden there's a shortage of coffee beans, then more people are going to start buying tea as a substitute for the lack of coffee. Also, I learned a lot about demand through my ABP class. I'm in charge of all the snacks at the student store. I have to take inventory of all my products at the end of each week so I know what kinds of products are being sold and which aren't. Then I have to decide why they are either selling or not selling. Some has to do with what the cafeteria sells (SUPPLEMENTARY demand) and some has to do with pricing, which I'm sure is our next lesson in class. Okay that's enough, I'm sure you've learned enough about demand, because I know I sure have!!
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