Investing 101

1. Stock


I chose this image to represent stocks because it shows how the markets fluctuate.

2. Bond


This image is used to represent the war bond effort by the United States government during the Second World War.

3. Primary/Secondary Market


In the secondary market, an intermediary is used in the trading of securities, which differs from the primary market where securities are purchased directly from the issuer. For example, aftermarket car parts.

4. Bulls/Bears


The picture represents the pessimists and optimists within the market.
5. Selling Short

Strategy that involves purchasing of stocks for less that what you sold for.

6. Franchise

Restaurant chains are some of the most franchised businesses one can get into. They are sold off by corporations to be run locally for a fee.

7.Underwrite/Underwriter/Going Public

Having an underwriter can often make the difference between being approved for a loan rather than being denied a loan.

Supply Wrap-Up

Inelastic

 

Elastic

Price Floors

When it comes to price ceilings, I think that certain items in our economy should have a limit on how much they cost. A huge part behind my reasoning has to do with college education. The prices seem to keep significantly rising, and for someone like me who wishes to attend private school, finances become a hassle when the school is requesting you pay $50,000 in tuition a year to attend.  Granted, some of the more prestigious schools like the Ivy League and many east coast schools are going to cost way more than somewhere like Oregon state, as they should looking at the kids that are eligible to attend based on their academic and out of school activities. However, this could sell kids short of an education they might have worked for their whole life. I think a price ceiling should be put on the price we way for private and public colleges, allowing more kids to go to school. Although a price ceiling would be highly beneficial, many private schools could lose the "image"  that they have created for themselves. If a price ceiling was not to be put on college, there is no question in my mind that more scholarships with more money should be given out to kids who deserve them and need it in order to attend. 

In addition to price ceilings, I also believe that price floors should exist in the United States on such items such as agriculture and gasoline. If prices were significantly low on items that fall under these categories, our market would erupt catastrophically and there would be a national shortage. Price floors help keep our products at somewhat of an equilibrium, and demand would skyrocket if everything were dirt cheap and many people in america were still making a comfortable living. Price floors need to be in order to keep the economy from demanding more than we can supply, especially for goods like gasoline and foods.

30th Birthday

I just turned 30 years old. Happy birthday to me. Woo. I remember when I was just an 18 year old high schooler, those were the days. I'm sure glad that the government decided to keep spending all of my hard earned money in a very irresponsible and unsustainable way. Not. The $30 trillion in debt that has accumulated over the years basically has allowed China to become our overlord. Never thought I would miss the old days of economic turmoil.
The gap between rich and poor just continues to grow and grow. The poor get poorer and hell even the rich are losing all of their money because of the obscene tax rate that has been imposed to support everyone on welfare. Oh well, things cant get that much worse, right? Wrong. The debt continues to rise by billions of dollars a month and the economy continues to collapse.

Manifesto 2.0

1. The role of government in regard to the economy should be minimal. I believe that taxes should be minimal to the point of providing the government with just enough to fund the necessary programs. Regulations on business are too invasive and not as necessary now as they were before. Some regulation is needed, of course, but it should not be to the point where it has negative effects on businesses. Consumer and worker safety along with minor involvement in environmental preservation should be the extent of the governments role. "The best government is that which governs least" (Civil Disobedience, 1849. By Henry David Thoreau).

2. I strongly disagree with the amount of money that is taken in by the government through collection of Social Security. It was never mean't to be a significant source of spendable revenue for the federal government, but rather a government subsidized form of savings that they started to dip into and fund programs with. Now we are forced to buy into a system with the expectation of getting that money back, unfortunately many people don't get anywhere close to the money they put in back. It has basically turned into an extra income tax.

3. The main problem that I have with the chart is that each section could be shrinked by millions or even billions of dollars if government officials could just prioritize and agree to cuts in certain areas. It is all very dependent upon the ability of both sides to cooperate and make necessary cuts. It seems to be unanimous that there needs to be cuts. I would focus the cuts on the Medicare and Medicaid which mostly includes ObamaCare. Defense also has room for rearrangement. There are just so many earmarks in the budget that need to be sorted and prioritized.

4. I believe that the first step to shallowing the financial hole that we are currently in is tax reform. With this we would undoubtedly see an increase in federal revenue if done correctly. Unfortunately, tax reform isn't an option in the simulation and it also fails to recognize the potential for increasing revenue by lowering taxes. However, I also believe that this country doesn't have a revenue problem, but rather a spending problem. My plan for shrinking the federal deficit involved mostly cutting federal programs. The defense budget is incredibly high and definitely has some room to make cuts to unnecessary programs. For example, the F-35 program sucked up $397 billion and ultimately failed. I'm sure that if they took the time, every federal program could find a couple areas that could use some trimming down.


5. The reason I chose scissors as my symbolic image should be clear. Our government needs to start cutting back on things that we don't need. Consistently running trillion dollar deficits is not a healthy practice. The spending is totally out of control in my opinion and needs to be brought back down to earth.

Taxes

1. Progressive Tax:

• Pros: Those in higher tax brackets pay a higher percentage while less wealthy people pay a lower percentage. "People pay taxes based on their earnings." Rich people are more able to pay more and still buy goods and services while poor people are not. Generates a lot of revenue.
• Cons: Not seen as a fair tax because it burdens the upper class with a relatively heavy tax burden. Taxing the upper class reduces investment incentives as they contribute the most to the economy. The tax makes wealthy people feel as though they are being taken advantage of for being successful. Some even argue that it    "discourages economic growth."

I disagree with the progressive tax because it imposes a heavy tax burden upon the ones who contribute most to the economy.

2. Flat Tax:

• Pros: Very simple tax where everyone is paying the same percentage, regardless of their yearly earnings. "No exemptions or deductions would be allowed except to the lowest tax brackets." The tax is fair to the wealthy for they are not burdened with all of the taxes and are therefore encouraged to invest. 
• Cons: The lower class would be subjected to paying a slightly higher tax percentage than before with our current tax code. It is also criticized for not being harsh enough on the rich people because many believe that they should be paying more.

I agree with the flat tax because it is fair.

3. National Sales Tax:

• Pros: Simple consumer driven tax that doesn't tax income but rather what you decide to spend it on. The tax is collected based on a given percentage on certain goods and services right when you buy them. Businesses then write the check to the IRS and it is collected.
• Cons: The tax is very inconsistent from a revenue standpoint seeing that it is largely based on the current climate of the economy. Lower income families can suffer because the tax would affect their ability to purchase certain necessities.

I disagree strongly with the national sales tax because it is not a consistent source of revenue.

4. Value Added Tax:

• Pros: Another simple tax that taxes the steps of production of a certain product. Has the potential to generate a lot of revenue for the government. Doesn't affect business very much negatively.

• Cons: Many conservatives argue that we do not have a revenue problem but rather a spending problem and thus creating a tax that can generate so much money goes against the idea of starving the beast of government. Costs of tax are passed onto consumers.

 I disagree because it passes costs onto consumers.

The Sequester

The Sequester is "a series of automatic, across-the-board cuts to government agencies, totaling $1.2 trillion over 10 years" (CNN). This basically means that if the government is unable to reach a deal by the predetermined deadline, then cuts will be automatically put in place, cuts that neither side really want. The sequester is said to have a detrimental impact on the national economy. 
The main problem with the sequester lies in its quick strip of the funds from certain programs rather than gradually taking away from the budget. "The sequester will mean such awful things because it forces agencies to cut indiscriminately, instead of simply stripping money from their overall budgets" (ABC). Because of this, programs don't have a proper amount of time to decide how to work around the amount of money that is stripped from their federal funding.
"The cuts are evenly split between domestic and defense programs, with half affecting defense discretionary spending and the rest affecting both mandatory and discretionary domestic spending" (Washington Post). Cuts will be given out across the board taking from defense and domestic spending. I personally believe that cutting defense spending in today's volatile world is not the best idea, especially when considering the United States' role in the world.