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.

Political Manifesto Beta

I am a Conservative.

• Lower Taxes
• Less government regulation of business.
• Social programs for those who need it
• We cannot lower spending on defense, but we have to spend it on things that will actually benefit the military...no more F-35
• Veterans deserve the best
• Support and encourage private investment

Econ Research Project Presentation

https://docs.google.com/presentation/d/1JoQ-tVVKNuSb4PyiyHPPuuof_bKTss--EA-jZdUffO8/edit#slide=id.gafcd737e_092

Annotated Bibliography

Central Question: Would Obama raising the Federal minimum wage improve or hurt the economy?

Source #1: 

"Texas A&M University: Raising the Minimum Wage Will Hurt Job Creation, Say Researchers at Texas A." India Banking News 4 Mar. 2013. Infotrac Newsstand. Web. 12 Mar. 2013.

This is an article written by someone who is strongly opposed to the idea of raising the minimum wage. He begins by referencing President Obama's SOTU address and more specifically his called plan to raise the Federal minimum wage from $7.25/hour up to $9/hour. Based on research, increases in minimum wage tend to reduce job creation substancially and employee turnover is rather unaffected. He also makes the point that firing people itself is a very expensive thing to do if you plan on replacing them with new employees when training and other factors are taken into account.

"When something costs more, people purchase less of it. Low-skill labor is no different." Increasing how much you pay someone passes those costs onto consumers, thus causing demand to go down.

The information provided in the article gives a good look into the perspective of somebody who is strongly opposed to Obama's proposed increase to minimum wage. It is a great asset to have when trying to answer the question of what raising the minimum wage would do to the economy because he makes a lot of good points and provides evidence to support what he says. The author also cites many other people who share his view, giving his piece an extra dimension.

Source #2:

Hassett, Kevin A. "The wages of gamesmanship." National Review 25 Mar. 2013: 8.General OneFile. Web. 20 Mar. 2013.

The majority of Americans support a higher minimum wage because they believe it will support the lower class and help working citizens. Obama talks about full-time worker benefits while failing to mention the economic and social issues that go along with having a high minimum wage or just a minimum wage in general. In 2012, almost two-thirds of workers making the minimum wage or less were part-time workers, and a bit over half of all minimum-wage-or-lower workers were under the age of 25, many of them students living at home with their parents (Hassett). In the end, the most affected denomination of people affected by the minimum wage is those who lose their jobs because of it.

This particular article is very valuable because it provides many statistics that back up the author's points. He cites information from many Universities, government institutions, as well as economists. The author is clearly another critic of the minimum wage in America, so there is bias present in the article, which is a slight drawback, but he is able to back his points with factual information. I will mostly use the statistics and facts that he points out to strengthen my own argument.

Source #3: Ford, Stephen. "MinimumWage.com." MinimumWagecom. Employment Policies Institute,

Higher costs of employment mean that the employers themselves must pass those costs onto consumers or cut costs elsewhere. San Francisco currently has the highest minimum wage at $10.55 an hour. Research suggests that raising the minimum wage does not help lower poverty rates. The majority of employees who stay at a job for more than a year are above minimum wage by that time. A higher minimum wage reduces the output in many different industries. About 40% of people earning minimum wage are teens or young adults living with their parents.

This source is also packed with factual information and statistics, very vital to answering my question. So far, the information I have gathered is very anti-minimum wage. The source, I believe is pretty credible. I should probably take a look at different perspectives to come to a solid answer.

Demand Wrap Up

Part I.

1. Utility - The satisfaction received from a product; the need or want that a good or service satisfies.

The utility that I receive from drinking water is that it quenches my thirst and keeps me alive.

2. Complementary Demand - When the demand of one product is generally tied to the demand of another, and vice versa.

Hot dogs and hot dog buns have complementary demand because you usually don't use one without the other.

3. Substitute Demand - An instance in which one product can be replaced by another with similar qualities and that falls under the same product category.

Coca Cola and Pepsi have substitute demand for one another.

4. Elastic Demand - When a certain product has a varying demand. 

The demand for cookies is very elastic, when prices go up, people tend to buy less.

5. Inelastic Demand - When a certain product does not have drastic changes in demand despite it's price. 

Gas has very inelastic demand, people tend to purchase the same amount despite it's price.

Part II.
Elastic

Inelastic

The Factors in the Demand Environment

Increase in Demand - Substitutes

http://www.harpercollege.edu/mhealy/eco212i/lectures/s&d/s&d.htm

The blue line represents demand before the increase in price, the red line shows the increase in quantity demand. I chose to use substitutes as the factor in the demand environment. Substitutes affect demand by offering consumers a product that is similar to the original, but at a different price, usually without any noticable change difference in quality. One example of this would be replacing a name brand of bread, such as Sara Lee for a store brand like Fred Meyer. The store brand is still pretty good, but it costs less. So if Sara Lee ever increased their prices, the demand for it would fall and people would most likely start buying a store brand as an alternative.

Decrease in Demand - Complimentary

http://www.harpercollege.edu/mhealy/eco212i/lectures/s&d/s&d.htm

Complimentary products have the ability to affect demand negatively when there is a significant increase in price of a product's compliment. For example, if prices were to increase on hot dogs, demand would fall not only on hot dogs, but also buns and perhaps some condiments. Relish, would probably be the most affected because it goes best with hot dogs, not really much else. Mustard and ketchup demand would also be affected, showing how an increase to the price of one thing has the ability to affect other products as well.

Demand Headlines

1. Complementary:
"Jean prices at an all-time low, boxer sales soar!"

2. Substitute:
"Gas Prices skyrocket to $100/gallon, bike sales ignite.

3. Elastic:
"Oreo prices go through the roof, sales plummet."

4. Inelastic:
"Milk prices mooooving up, sales unaffected"

Milk is a common commodity that is generally always going to be in demand. People use milk in just about everything, from your cereal in the morning to a glass of the stuff with dinner. Even with all of the substitutes like soy and almond milk, many people tend to stick with the classic milk from a cow, in my opinion, the best. It's inelasticity comes from it's wide range of uses in cooking, baking, and regular consumption. Many people, such as myself, are unable to move onto the new craze of milk substitution.

Demand and Utility

1. Cobra X: The Cobra X is a lacrosse head which I will most likely be buying to replace my old one. This is a demand of mine because I am in need of a new one. The utility it will serve is improving my game making me a happy kid.
2. Gas: I'm running a little low on gas right now, so I'll probably have to fill up the tank this week. It will serve the utility of making my car go.
3. Loaded Grillers from Taco Bell: I get hungry, and Loaded Grillers are delicious. They serve the purpose of filling up my stomach.

Markets

The market economic system is one that revolves around the idea of personal freedom of choice. I am a supporter of this type of economic system. Supply and demand is the driving force behind the US economy and I believe that is the way to do it. Command economies are bad, just look at what happened to the Soviet Union, they collapsed. North Korea is another example, probably the best example of Communism gone wrong. Their society is in a horrible position, they can't even feed their citizens. The one case to be made in favor of a command style economy is that all citizens are equal, in theory at least. The problem with this; however, is that there are no incentives to succeed or invent something new, like in a market economy.
Market Economies do have their drawbacks. One serious drawback is that in a pure market economy, poor people have no help. However, the US has corrected this by instating welfare and other programs to help people who are struggling. By allowing the system to be mostly driven by consumers, it makes it quite simple to fulfill wants and needs.I fully support the concept of a market economy.

Opportunity Cost

Recently, I purchased a new snowboarding jacket from the Oakley outlet store for $80. It was a very worthy purchase. I do wear the jacket quite often at school and when I go to the mountain. It could definitely be considered an impulse buy because I wasn't exactly looking for a new jacket, I just saw it, liked it, and decided to buy it. Something else I could have spent the money on would have been a new pair of shoes, or a new pair of snowboarding goggles.
The opportunity cost of me deciding to buy the jacket would be not being able to get new goggles. I do not regret my decision, the jacket is something that I use regularly while goggles would be seldom used. I also did not need a new pair of goggles, the ones I have fit me well and still do their job. My old jacket was beginning to get small on me and wasn't very warm, so my new jacket is better when it comes to that. It's also much more stylish.

Scarcity

Something that is scarce in my life is the Western Bacon Six Dollar Burgers from Carl's Jr.

This is quite simply the best fast-food burger ever made by mankind, hands down. The reason for the scarcity of this item in my life is because it is incredibly unhealthy, like 1010 calories unhealthy. Not only that, but it is also pretty expensive for fast food. Regardless of it's artery-clogging and wallet emptying qualities, you could say I am just slightly obsessed with it.