CPI, Cola, PPI

Name

Class

10/02/2011

1.      You read that in 1960 gas cost 31 cents a gallon. How could you tell if gas increased faster or slower than most goods and services? Convert the price into today’s dollars by using CPI.

CPI 1960=29.6           CPI 2011=225.4

2011 price=1960 price x (2011 CPI/1960 CPI)

2.36 = .31(225.4/29.6)

The average price of gas today $3.64 a gallon, therefore the price of a gallon of gas has risen in price faster than most other goods and services.

2.      Cola is an adjustment that occurs automatically every year. It was put in place by Congress in 1972 in order to maintain the purchasing power of people receiving benefits from Social Security. Cola is based off the percentage change in the consumer price index for urban wage earners and clerical workers (CPI-W).

The first increase for cola occurred in 1975 it was for 8.0%. For the years January 2007, January 2008, January 2009 cola increased 3.3%, 2.3%, 5.8% respectively. January 2010 and 2011 there was a 0.0% increase in cola meaning there was no rise in benefits for Social Security recipients. Cola did not rise in 2011 because there hasn’t been a rise in CPI-W since the third Quarter of 2008.

3.      Quarter to quarter GDP growth shows the 1^st, 3^rd, 4^th quarters of 2008 showed a decline with only the second quarter showing a small increase. The 1^st and 2^nd quarter of 2009 showed a decline in GDP while the last two quarters showed increases. Since the last half of 2009 GDP has risen every quarter up to the second quarter 2011. First quarter 2011 GDP only rose by .4%. Second quarter 2011 GDP increased by 1.3%. This shows the economy is still growing, but has fluctuated a lot recently.

The chart of personal income from May to August shows some volatility with consumer spending rising than falling same seems to be true with disposable income it rises than falls sharply. In August personal income fell .1% while the prior month it increased .1% so personal income has remained flat for at least two months.

4.      Unemployment has held at 9.1% since July with about 14 million people are without a job. 6 million of those people are long term unemployed making long-term unemployment 42.9% of the unemployed population. Healthcare continues to add jobs but government  employment has a downward trend. The unemployment rate has hovered near the 9% for the last six months. The number of long term unemployed is worrisome because many of those people may give up looking for jobs and just leave the work force. Unemployment has a negative affect on the entire society it often leaders to higher crime and reduced confidence in the economy.

Consumer Price Index for all urban consumers (CPI-U) rose .4% in August. Fuel, food, shelter, clothing continues to increase. With the exception of June 2011 CPI-U has risen every month since August 2010. Prices are on the rise with personal income and disposable income being volatile, there could be a worry that prices rise faster than people can afford to pay hurting demand for many goods and services.

               Producer price index  did not change for the month of August after adjusting for seasonally changes. In July the index only rose .2 percent in July and in June it fell .4 percent. What this means is producers prices haven’t changed much over the last few months. With producer’s prices not changing much but consumer prices going up this shows that producers are in general raising their cost for other reasons other than passing on increased cost to their customers. 

               Productivity fell in the 1st and 2nd quarter of 2011 at a.6% and .7% annual rate. From the second quarter 2010 to second the quarter 2011 productivity increased by .7 percent. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers. Year over year shows an improvement in productivity bust the first two quarters of 2011 show a possible downward trend. When productivity falls  there is a need for more workers because less is getting done with the people currently employed.

5.      After looking at the presentations and looking at the fed website I believe the presentations are updated monthly.

Index of Economic Freedoms United States and India

Name

Date

Macroeconomics

On the 2011 Index of Economic Freedoms the United States ranks 9^th and India ranks 124^th. India has a population of 1.2 billion with a GDP of $3.5 trillion and a per capita GDP of $2,941. United States has a population of 307.4 million with a GDP of $14.2 trillion and a per capita GDP of 46,381. The unemployment of India is 10.9%, while the U.S. has 9.6% of its population unemployed. In the last five years India has grown at an 8% compounded rate while the U.S. has only grown at .7%.

 Even though India ranks low it has seen improvements in four categories: Business, Fiscal, Government and Labor freedoms. India has also seen a drop in two categories: Trade and Monetary freedoms.  The United States has seen a drop in four categories: Business, Trade, Government, and Monetary freedoms. The United States has seen improvement in Fiscal and Labor freedoms.

One clear difference between the U.S. and India is in property rights, Copyrights and intellectual property rights are difficult to protect in India. Domestic companies have used patented products without legal penalties. Property rights in the U.S. are secure there is a well developed licensing system that protects patents and copyrights. Protecting property rights goes a long way in creating a strong economy, it allows people to develop new products or services and bring them to market without fear of someone stealing their property.

Business freedom in the United States even though it has declined is still much higher than India’s. In India it is still difficult to start a business regulations are burdensome with little legal framework. It takes a very long time to start a business and even longer to get permits to do anything. Although India has shown improvement in allowing more freedom in creating a business it still has a long way to go. America protects the freedom to create and run a private enterprise. New regulatory uncertainty in the U.S. has led to a small drop in business freedom. Despite that the U.S. still remains well above average in allowing business freedom to form. Creating an environment that allows people to easily start a business aids in economic expansion by making it easier for someone to put their ideas to work. Regulation hampers new business because it adds more costs to the start up costs.

In India 28 state-owned banks dominate the banking sector they control 70% of the commercial banking assets. The high cost of credit makes it difficult for private businesses to grow and develop. Foreign banks are limited to owing only 5% equity in a private Indian banks. The United States has made changes to its financial sector since the sub-prime mortgage crisis in 2008. The government has intruded on the management of financial firms many of which have been bailed out. The Sarbanes Oxley act of 2002 still raises concerns due to increased disclosure and internal control requirements that hurt smaller firms. Even with the U.S. making its changes to the financial sector it still ranks much higher than India with regards to financial freedoms. Allowing the financial markets to run independently from the government allows greater access to financial options, such as securing loans for business expansion. The changes the U.S. has implemented also show the how public opinion can encourage governments to restrict the total freedom of financial markets.

The United States has burdensome taxes, top income and corporate tax rates are 35%. There are also estate taxes and excise taxes. On the state and local levels there are additional income, sales and property taxes. Tax revenue in the most recent year was 26.9% of GDP. There is also the possibility of the top income tax bracket to rise to 39.6% and capital gains tax to change from 15% to 20%. India has high taxes a top income tax rate of 30.9 %. The top corporate tax rate is 33.99%. There are also taxes on dividend and interest as well as a new general sales tax. Tax revenue was 18.6% of GDP in the most recent year. Higher tax means less reward for an investor or entrepreneur who takes a risk in hopes of a large return. High taxes are never popular it creates a feeling of being robbed, especially if you don’t see or feel the benefits of that tax revenue. With more money going to the government it could cause people to move their money or ideas to a country with lower taxes. When money and ideas leave there are less new businesses and less innovation.

Fixing Zimbabwe's economy

Name

August 29, 2011

Bus

            If I were the President of Zimbabwe I would first sell off government owned arable land than encourage the new owners of the farm land to build partnerships with foreign investors to grow maize, tobacco, cotton to be sold in the open market in exchange for  the necessary skills and equipment to create profitable commercial farms. I would create and pass laws to protect personal property in an effort to show foreign investors that if they invest in Zimbabwe they can feel secure that they won’t lose their investment to a government take over. To encourage production I would have to allow the market set the price for all goods bought and sold in Zimbabwe instead of forcing prices down unnaturally. This would at first make food prices rise but as production of basic needs increased the price should start move towards something more affordable on its own.

            Cutting government salaries and benefits as well as unneeded jobs, while very unpopular needs to happen in order to fund other government activities that could prove more valuable to the overall economy. By building infrastructure the government can make the movement of goods cheaper, easier, as well as making it much possible to supply business and people with steady sources of water and electricity. Allowing prices to rise and fall on their own, as well as protecting people’s rights to personal property will go a long way to improving Zimbabwe’s economy. A government that focuses on the most efficient use of funds instead of the populist short term fixes will improve the overall economy. Trying to create a more equal economy tends to weaken the entire economy. People want to have more than others and when you restrict that desire by forcing equality into the system production falls, prices rise and investors flee. By taking away the reward of taking risk people will not take the risk. 

Economic policy

CMP 111

Economic Policy

And what’s best for America

Name

7/14/2009

In America we have many ideas of what is best for the future economic growth of our nation. The two main theories have very different views in what is best to move our country forward. The first is often promoted by the Republicans, the basic belief is that lower taxes for business and the richest of the population helps expand the economy, by creating new investment opportunities. The second is promoted by Democrats; they believe that when the masses have lower taxes our economy grows, because the money they receive is spent on goods and services which increase the profits of everyone. Both have endless amounts of research and statistics to back up their views. But only one can keep the American economy competitive for the long term. This paper sets out to show that lower taxes for the largest percentage of Americans can make the American economy stronger.

            In the 1980’s the Republican Party tested what we will call supply side economics

and the U.S. Treasury Department lost $644 billion in revenues with no increase in

worker productivity or investment activity (Hage, December 1994). A problem with the Treasury losing so much money is that the Fed had to slash grants to states and local governments which

 caused many states to raise income and sales taxes. In 1981 congress enacted a

series of tax breaks such as capital gains, generous write-offs for business investment.

 The Reagan Administration believed it would expand the economy 4.4% annually and

create a budget surplus of $28 billion by 1984 (Hage, December 1994). But this estimate was far off base in 1986 the Treasury collected $171 billion less than expected (Hage, December 1994). Thomas Sowell argues in the article “A dishonest Slogan” that lowering capital gains tax only

helps to keep up with the rate of inflation and isn’t really a gain at all. He also believes

 that raising capital gains tax discourages investment and hurts the economy. This

argument just doesn’t hold up when you realize that the people that benefit the most from

 capital gains tax will always invest their money because it is there chosen profession.

            In America both of our major political parties have conflicting ideas of how our

economic policy should work this goes beyond their tax plans. The Republicans believe

 that self reliance means there is no safety net needed. They believe business can thrive

without healthy social conditions (Porter, Novemeber 2008). While the Democrats talk in a way that sounds like they want to penalize investment and economic success. They believe social

progress can only happen at the expanse of business (Porter, Novemeber 2008). Both these views are wrong we need to realize what makes America great is our ability to find a middle ground, something that allows business to grow while offering a protective net for those who need it. Business can thrive in an environment where our poorest Americans are given a helping hand. The problem is that a politician by their very nature can’t admit when they are wrong and spend all their time defending the policies of the past to prove they were right. What we need is for political leaders, business leaders, and civil society to have a respectful fact-based dialogue about the challenges we face.

            Taxes are still a major part of what happens in our country and Americans tend to

look poorly on taxes. Taxes are necessary in any government, and a fair and balanced tax

structure is something everyone can agree on. But this hasn’t been the case in America

for a very long time. Most Americans believe business has put their personal gains over

what is best for the entire nation. And with a August report released by the U.S. General

Accounting Office that stated that two-thirds of all American corporations paid no

federal income taxes between 1999 and 2005, it’s easy to see why the American people

feel that way[1] (Zuboff, 2008). No one likes paying taxes but everyone should pay taxes not just

some people. But with the current economy we are dealing with there is a growing belief

that what has been seen as a “Liberal Democratic policy” might be what is needed to

keep America competitive in the future (Zuboff, 2008).

            A Business Week Online article by Jane Sasseen offers a good contrast between

the tax plans of the Republicans and the Democrats here are a few samples from her

article:

“Len Berman a former Treasury tax official who is a senior fellow at the        Urban Institute say if Obama’s proposals which include plans to    

rescind the Bush tax cuts on couples making more than $250,000,  

close corporate tax loopholes, and tax private equity earning           

known as ‘carried interest’ as ordinary income were adopted in

quintile of the population would see their after tax income rise

5.8%. Those in the next quintile would see an increase of

4%. McCain’s proposals by contrast far more benefits would go

to the top a corporate tax cut and a large reduction in estate taxes

also extension of the Bush tax cuts. In 2009 if McCain’s

proposals went into effect the bottom fifth of the population would

see after tax income go up just .2% and people in the next

quintile would see a  .7% hike. But the top quintile would see a

bump up in after tax income of 2.7%. Obama’s proposals when

compared with current tax policy would actually increase revenues

coming into government coffers. Although he has promised tax

cuts too many middle and working class families, along with the       elderly. Obama’s tax plans would bring an estimated additional

$734 billion to the treasury over 10 years. By contrast McCain’s

tax changes would still leave the Treasury coming up short.

McCain’s proposals would slash tax revenues by an estimated

$628 billion over the 10 year period.” (Sasseen, 2008)

Obama ·         $734 billion in treasury in 10 years

McCain ·         Slashes $628 billion in treasury in 10 years

           

There are many theories to what is best for the economy, but the obvious choice is

to give money to the mass of consumers. They will generate sales which will help

business and also bring in sales tax for many states. A fair and balanced tax structure that

 taxes the people on top and on bottom at a nearly equal rate means that everyone thrives

 from the increases sales. And if more people have more money investments will

naturally rise. A fair tax plan that lowers taxes for most Americans is a long term solution

that will grow our economy for many years.

Bibliography

Hage, D. a. (December 1994). The Repackaging of Reaganomics. U.S. News & World Report .

Porter, M. E. (Novemeber 2008). Why America Needs an Economic Strategy. Business Week , 38-42.

Sasseen, J. (2008, November 30). Obama vs. McCain: Taxing and Spending. Retrieved from Bussiness Week Online: http://web.ebscohost.com

Sowell, T. (January, 1995). A dishonest slogan. Forbes , 81.

Zuboff, S. (2008, November 30). Bill Bradley Slams McCain's Tax Rant. Retrieved from Bussiness Week Online:http:/web.ebscohost.com

           

           

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[1] Zuboff, S Bill Bradley slams McCain’s tax rant

human values world view

Name

July 20, 2009

100

            I view the world as a place where people do what they need to do to survive. The world is survival of the fittest no matter where you are on this planet and what your struggles are if you cannot meet those challenges you don’t survive. If you are homeless or jobless this world doesn’t care about you. We aren’t much different from animals if you cannot compete then you don’t survive very long. There are people that go out of their way to help others but they are so few in number even fewer do it just because they feel it is the right thing to do many do it because it may help with their taxes or make them look good in the public eye or some other motivation that is based on themselves. I don’t believe in anything really at all except what is best for me, I focus on me and what is best for me no one else why should I think of others. I don’t know why I am only concerned with myself and I don’t know when this selfish thought process began but I know that it just feels right. It feels more natural to be concerned about myself then others.

            I am not at all religious I don’t believe in a god at all I don’t see the point I believe the idea of a god was thought up by people smart enough to know that most people are basically stupid and would believe what they were told. Those same people used the idea of a god to scare the masses and take control over the larger group of people. I think people hold onto religion because they are afraid to admit to them that this is all there is to life and no one cares about them. All they truly have in life is they and that scares people so they hold onto this idea of an all loving god. I don’t hold any values dear or close to me if it will suit my needs I will do what needs to be done. And I expect all people I deal will to react in the same way personal self interest isn’t a bad thing even though we are all taught that it is. I respect a person who is motivated by doing what is best for them.

            I think that I should have everything that I want in the world and I am willing to do what I have to to achieve it because I don’t believe anything should be handed out to anyone. But since I am motivated by self interest I am not adverse to taking a hand out either it is strange because I am a hypocrisy and I realize that and have no problem with it. Something I don’t think another person should be given I will take just as easily if offered to me because it benefits me. The world is an unforgiving thing if you fail no one will help you or even care. The world is a harsh place to live every corner or the world there are people that are struggling to survive they don’t have the very basic needs to survive food water shelter. And there are places that have these things in abundance and don’t even think of giving the people that need these things to them or at least not enough to survive on just enough to stave off death for a little while longer. This sounds horrible but that what people do we naturally care about ourselves more than others we are greedy and when we have we don’t want to give we want more more more and I don’t think there is anything wrong with that I believe it is actually more natural then helping another person survive.

            People are always competing with one and another we seem to have a natural drive to dominate another group or species, why is it strange or wrong to realize that we only do the things we do to benefit ourselves. Natural selection is a driving factor in evolution and it is in its basic form all about dominating in an ecosystem. The person that is most successful has best mating opportunities and best access to the basics of survival. Why do woman try to look more attractive and why do men try to show off their car of whatever else they have of value, I believe these actions are a basic instinct to dominate or compete with other members of our species in order to better survive and spread their DNA. My view of the world seems very negative and pessimistic but I don’t really see it that way I look at it in more of a realistic view. Life is not fair this is a fact in life but it is wrong or maybe unfair for me to admit that I do everything in my life for myself it just doesn’t make any sense to me. If the world is not fair then why should I be fair or care about other people doesn’t it make more sense to be concerned about only yourself in a world that is clearly not fair?

            I fully expect the people I come in contact with to do what is best for them and I know that this sometimes means that it won’t be what is best for me. So with everybody I meet I maintain a distance a certain level of distrust. I also maintain what could be considered a quick release from the relationship in the event that my needs to align themselves with the person I am associated with. It sounds bad but the truth of the matter is can you truly trust someone completely, no you can’t because people are capable of doing anything a person you have known and trusted your entire life could be a person to rob you if they felt the need to do so, or the person you love could turn out to have been cheating on you for as long as you have been together. Trust is something no one should ever give to someone completely a person should always stay on their toes about a person in their life.

            I would have to say that a lot of what I have been taught I have rejected. The idea that god loves you people are good and honesty is important I would have to say I do not believe any of that. The reality as I see it is that we are told things like that by the people who control the masses business leaders government officials and religious leaders all feed that stuff to us so they can maintain their place in power which I can’t be mad at them for it good for them, but I want to put myself into a powerful position so instead of being a follower I decided to do what is necessary to succeed and not care about other people. People are taught certain things at very young ages so young that they aren’t able to create an argument against it and so they grow up believing what they were told without questioning it that is why so many people still believe in god because they were told he was real. Our culture teaches that people should be good and help each other but we often do not practice what we preach, we talk about how good it is to help people and then tell the homeless person asking for food to get a job. Why teach that giving is good when it goes against our natural instincts to give to another person?

            People say they value justice or honesty but in reality they only like to say they do. When a person is accused of a crime they are instantly marked as guilty without a trial or anything justice isn’t important people are more concerned with revenge than anything else. People are only honest when it suits their needs people have no trouble lying if it benefits them. People are only concerned with what pleases them and we create this unrealistic view of what we humans beings truly care about because we don’t like being falsely accused or lied to but when it comes down to it we have no trouble accusing someone without evidence or lying to save our own ass. So all people are only truly concerned about themselves whether or not they admit it. I am just one of the few that will admit that I am more important than anyone else.

            I believe the world would be a better place if we would all just admit that the only concern we have is for ourselves. If we did this religion business and government would not be able to control the masses in the way that they do. What is right and wrong would cease to exist it would simply become what is best for me and even though that may sound like chaos there would be a natural order to things because people even today still do what is best for them. If you allow everyone to do what is best for themselves without any social consequences people would be able to reach their full potential.

           

           

            

side taking

Name

September 27, 2009

Taking Sides Paper

            I am not worried at all that Patrick Buchanan is right. Every mass immigration into America has had the same fears that Patrick has displayed toward the Mexicans entering our borders. America promotes a history based on accepting immigrants into America and they say that is what makes America strong, but our history of treatment of immigrants has never been accepting. Patrick Buchanan is a Republican and I have never known a Republican to ever be right on anything they are mostly white racist males that only want to reverse any kind of progress America has made in its history. Their entire goal is to end any government oversight and to allow discrimination to be openly accepted once again. They also want to create a Christian nation and force the beliefs on those who do not already follow them. I firmly believe the people that consider themselves conservative are a threat to American freedom. Patrick in his paper describes a brief history of America and Mexico and uses this history as a reason why Mexican immigrants are a threat to America. If Mexican-American history creates a valid reason for ending immigration of the Mexican population into America then the same could be said of the people of the United Kingdom. Our history with the U.K. was that they refused to give us our freedom as a sovereign nation which forced us into a war where they invaded our shores. Then after we won that war in 1812 the British used their superior navy to impede our trade with France, which lead to the war of 1812 in which the British invaded parts of the United States.

I pose the question that if Buchanan is right that Mexican immigration is a threat to our cultural integrity what right do we have to even oppose this invasion and forced conversion into the Mexican culture? The European influence that is so prevalent here in the United States is the effect of our invasion and forced conversion of the indigenous population of the American continent. The Native Americans were forced off their land and had their culture destroyed by us. This is a fact that cannot be denied so why is it right for us to destroy a groups way of life, but the idea of another group coming in and changing or destroying our way of life is somehow wrong?

Immigration is not a threat to American people I know this to be true because of my service in the United States Marine Corps. Many of the people I served with were either a first or second generation of an immigrant family. There were many Mexican immigrants that I lived and worked with for four years. These men and women went over to Iraq and Afghanistan when their country asked them too. Despite the view or usefulness of these wars these immigrants or children of immigrants volunteered to put their lives on the line for America. If Mexican immigrants are a threat to America why are they joining the military? Also Patrick Buchanan makes a claim that immigrants do not benefit the economy. Using my experience of my fellow Marines that are Mexican immigrants I see something very different because they are working collecting an income and paying taxes. Even if there are high numbers of immigrants on welfare their future generations would be able to work and pay taxes and contribute to our economy much more than their parents were able to.

Human values 100

Name

July 6, 2009

HUV 100

            I found it interesting that Frankl said even if he had known his wife was dead he would have still clung to the image of his wife. The fact that he needed to hold on to something so much that it didn’t matter to him what the fate of his wife was he needed her image to keep him going.

            It was strange to read that the memories the prisoners remembered and thought about most were the simple things we take for granted. Things like unlocking the door to their apartment or switching on the lights could move them to tears. Such simple events we do daily and not even think about it meant so much to them really show the horrible conditions that they had to endure. Yet even through we hear these stories and think how horrible it must have been. There were times when they had small and short events that caused happiness or some relief from what they were living with.

            It was interesting to hear the stories of the guards and foreman that were kinder then what they had to be and to hear that there were prisoners that were much worse then they needed to be. There seemed to be good and bad people in every group. The situation had the potential to bring out the best or worst in people. It is easier to hurt another person in order to better your own postion or to take advantage of someone there were still those few that didn’t resort to such acts.

            The fact that after being released the prisoners didn’t feel like they were free at first, like it was a dream or just wasn’t real at all. And you often hear of the prisoners as poor victims but Frankl seemed to show another side. It was a understandable side but I never saw it. The anger and violence that many of the prisoners wanted to do they wanted to hurt the ones that hurt them.