Stock Market

Written by Rajiv Geffert

 There is something that is trending in the American public and that means good for our whole economy. The stock market has reached an all time high but what does this mean for Americans and America in general some may ask. Some economists say that this is great for the the economy and that the only place we can go is up. They say that “the rally is just getting started”. There however are some people who say that the only place to go is down and that we should be preparing for an economic blow. In the article it states that “Both the Dow Jones Industrial Average and S&P 500 ended at historic highs with the S&P finally surging above 1576, the previous record set in October 2007.” There is no telling what will happen to the stock market until it happens. This however doesn’t mean that it is going to plummet down into a spiraling recession like before. It also doesn’t mean that it’s going to go up by an astronomical percent. In the stock market game, there are two kinds of players, there’s not really an in between. There are bulls and bears. Both of them have very different viewpoints on the stock market and the economy as a whole. Bulls are when people are buying stocks and the market is going up. A bear market is when people are selling and holding on to stocks and the market is going down or staying at a steady rate, not increasing or decreasing. You can look at this as a realistic standpoint that bears are pessimists and bulls are confident in their game and that the stock market is just going to keep going up. As an individual you can take this record breaking stock market and invest or hold off, whatever you really feel comfortable with.

Some people may also ask why and how the stock market keeps going up. There are some obvious and not so obvious answers and some predictions too. Some people think that the FED has rigged the stock market and that they keep giving out money to people so that they can keep buying stocks thus increasing the US economy as a whole. People say that the FED isn’t losing anything either, they say that they are just creating new money so in essence that is causing inflation. It is estimated that the FED creates about 4 billion dollars a day and some of that goes to stocks and some of it goes to equity which helps keep the stocks high and promotes people to buy stocks. There is not a clear answer to why this is thought to be but it is said by an expert at Forbes which is an economic genius when it comes to just about anything. So in conclusion the stock market is rising and it can be observed that it is a good or a bad thing who knows. It’s really up to you whether you’re a bull or a bear, you choose.

Fiscal Policies to Reduce Deficit

Fiscal Policies to Reduce Deficit

By: Kayla Vitalbo

            Congress has been going back and forth since 2008 to find ways to reduce the deficit and stimulate the economy again. Economists believe that reducing the deficit is a priority, and doing so would stimulate the economy. Economists report to the New York Times that “Tax increases and especially spending cuts take money from an economy that still needs some stimulus now, and is getting it only through the expansionary monetary policy of the Federal Reserve.” There are still not means of compromise between the two houses, mostly because the Democrats strongly believe that spending cuts and tax increases on targeted classes (such as the wealthy) are the key to fixing the economy, whereas the Republicans believe that spending cuts alone and a classical economic policy of the economy fixing itself rather than the government intervening, is the key to success.

            Boehner and Obama are still trying to compromise between the two houses, but are taking their own measures to get their point across. Obama is travelling to different states to talk to college students about the necessity of research and educational spending, while the House Republicans are trying to force an answer or a compromise out of the Democrats. They are doing so by threatening to allow the Treasury to prioritize debt payments if Congress cannot agree to increase the nation’s debt ceiling, so we can keep borrowing money to pay the creditors. Boehner and Obama need to come to an agreement to put a fiscal policy in place, because only have a monetary policy is not doing enough to stimulate the economy.

            Gregg Daco, an economic advisor, is told by clients that fiscal policy doesn’t really matter and they brush off any ideas about a fiscal policy. Daco tries to get through to his clients to tell them that “it does matter, and it is important in terms of growth. It’s also important in terms of confidence.” Having a stable economy boosts the economies confidence, and we are then able to take more investment risks to further stimulate economic growth. Implementing a fiscal policy in addition to a monetary policy just ensures that we have more options to grow our economy.

            Both parties believe that reducing the deficit is a priority, but both parties want to go about reducing it in different ways which is what they need to compromise on. Our national debt is currently at $16.8 trillion, and is only going to grow if we don’t do anything else to prevent it. The graph below shows the nation’s debt every five years since 1965, and our debt has increased significantly from 65% of our nation’s GDP in 2008, to an astounding 102% in 2013. The recession in 2008 caused a lot of problems, especially with the people not spending as much money which decreased economic growth, and now the people still aren’t as willing to spend, so the government needs to take action and implement some sort of policy. Not only is it important for the Federal Reserve’s monetary policy to be in place, but it is also necessary to implement a fiscal policy that both parties can agree on in order to stimulate and grow our economy.

Works Cited

Calmes, Jackie. "Deficit Reduction Is Seen by Economists as Impeding Recovery - NYTimes.com." The New York Times - Breaking News, World News & Multimedia. N.p., n.d. Web. 9 May 2013. <http://www.nytimes.com/2013/05/09/us/deficit-reduction-is-seen-by-economists-as-impeding-recovery.html?hpw&_r=0>.

"The inconvenient truth about the US national debt | AEIdeas." AEIdeas. N.p., n.d. Web. 9 May 2013. <http://www.aei-ideas.org/2013/01/the-inconvenient-truth-about-the-us-national-debt/>.

"US Total National Debt | The Concord Coalition." The Concord Coalition. N.p., n.d. Web. 9 May 2013. <http://www.concordcoalition.org/us-total-national-debt?gclid=CLOSydfAibcCFZBcMgodZncAnQ>.

Social Security.

By Collin Sternad 

Social Security.

As the U.S. government tries to control the debt that has grown exponentially in recent years that debate on what should be done, or if anything should be done with social security continues to be a hot topic for economist nationwide. Social Security was first created under President Roosevelt to start the development of comprehensive social insurance to cover all economic hazards with special emphasis on injury and old age. Money for social security is directly taken out of American workers income; 6.2% to be exact is take out and  put into trust funds (one for retirement and one for disability), and the employer matches that amount unless the amount earned is greater than $90,000 dollars. In theory Social Security requires individuals to save, and when they retire they will receive enough money to survive monthly.

            However this theory has been challenged drastically in recent years due to the number of people entering retirement. Because of demographic pressure and the weak economy the social security program will only be solvent until 2033. Unless changes are made be 2033 those who retire, or are currently retired will only receive 75 percent on what they were previously promised. If this were to happen, it would send a shockwave across American. “Less than half of households ages 55 to 64 have retirement savings, and of those, half have less than $120,000. Many near-retirees also have lost home equity or a job.”(Social Security). Social Security is a vital necessity to many Americans and possible cuts could leave Americans who are unprepared high and dry. However, if cuts are not made to social security, then bigger cuts will have to be made elsewhere. Currently about 17% of the U.S. Governments debts is to the Social Security trust fund, and this number will continue to grow as more and more members of the baby boom generation retire.

           

Clearly it isn’t feasible to cut the Social Security program all together, but economists and politicians have proposed ideas to help reduce its impact. One of which is raising the age, at which citizens receive benefits, from 65 to 67 or 69. Raising the age at which Americans start receiving benefits would save the United States government millions of dollars. Supporters of this idea argue that the life expectancy of Americans is growing, so naturally the retirement age should rise too. However, this idea isn’t by any means supported by everyone; Americans argue that they shouldn’t have to wait another two or three years to receive the benefits that they rightfully deserve.

Another possible way to lessen the affects of Social Security, as proposed, is withhold benefits from the wealthy. Some believe that this is a viable solution because the wealthy don’t need the extra money anyways; they already have money saved, and a few thousand dollars extra isn’t needed. Other politicians argue that the wealthy should get just as many benefits if not more, because in reality they were the ones paying in the greatest amount. Just because the rich may not need the money as badly, is it right for them to be punished for being successful? This is one of the questions politicians will have to consider and examine in the future when considering cuts to Social Security. Only time will tell what the government decides to do about Social Security as they try to reduce the American debt.

Works Cited

 "China Fears U.S. Debt Default, But Has Few Options : NPR." NPR : National Public Radio : News & Analysis, World, US, Music & Arts : NPR. N.p., n.d. Web. 19 May 2013. <http://www.npr.org/2011/07/28/138754315/china-fears-u-s-debt-default-but-has-few-options>.

"Social Security Retirement Benefits - Online Application Information." The United States Social Security Administration. N.p., n.d. Web. 19 May 2013. <http://www.socialsecurity.gov/pgm/retirement.htm>.

"Social Security, Present and Future - NYTimes.com." The New York Times - Breaking News, World News & Multimedia. N.p., n.d. Web. 19 May 2013. <http://www.nytimes.com/2013/03/31/opinion/sunday/social-security-present-and-future.html?_r=0>.

The End of Elastic Oil

Written by: Bailey Zimmerly 

The End of Elastic Oil

          Oil, a commodity unlike any other, the basis of transportation, and the wealth of nations is changing. There is no current shortage of oil, but oil reserves are becoming more difficult to drill. “The oil supply is becoming less elastic as new oil supplies come increasingly from unconventional oil” (Konrad). Simply put, consumers are reacting more to more severe changes in oil prices and any change in the price of oil produces a small change in supply. Over the past decade this shift can be seen.

            Back in the 1990s consumer reaction to oil was not as high. The demand was extremely inelastic. Consumers thought the oil supply would never end and production was not highly regulated. However now, at least in the long run, the demand elasticity for oil can be more elastic. This is being done through carpooling, moving closer to work, and driving more fuel efficient vehicles. Replacing a car or moving may be unrealistic in the short-run, but in the long-run it becomes more possible therefore a change in elasticity is possible. However, if oil prices continue to rise, especially at an exponential rate, then the economy will not be able to adjust, therefore hammering the country with higher unemployment rates. However, another side has to be taken into consideration.

            Supply side elasticity has remained steady throughout the 1990s with little regulation. However, now with a strict oil limits amongst the countries of OPEC, supply will now remain constant with a rising price therefore forcing supply to become nearly perfectly inelastic. This problem haunts many of the top world consumers of oil. In the past supply would always adjust to the demand side of the economy for oil, however a change is coming.

            With this shift away from the elastic supply of oil, countries such as the United States are going to have to make many critical changes to prevent disaster from soaring oil prices. Simple changes such as increased investment in public transportation and encouraging people to carpool are short term fixes. However, long-term plans including improving the nations rail system to shift from truck to rail as well as encouraging the electrification of transportation. Finally, to help pay for these changes an increase in the gas tax at a slow and predictable rate over time to provide funds for the nations improvements as well as to signal consumers for the prices above.

            With the improvements listed above the United States and oil consumers around the world will be more able to adjust to higher gas prices with a continued limited supply. The markets need to encourage alternative uses in the transportation sector in order to make it a successful long-run superpower in the future.

Article: http://www.forbes.com/sites/tomkonrad/2012/01/26/the-end-of-elastic-oil/

Cited:

 "The End of Elastic Oil - Forbes." Information for the World's Business Leaders - Forbes.com. N.p., n.d. Web. 6 June 2013. <http://www.forbes.com/sites/tomkonrad/2012/01/26/the-end-of-elastic-oil/>.

Careers, looking forward, and behind.

Cal Stempel

Careers, looking forward, and behind.

Everyone has dreams of becoming successful, may it be treating patients as a doctor, or designing the next great monument as an architect.  We have a pre-set list of careers engrained into our heads that reap the highest income.  But what jobs and careers in today’s economy bring in higher incomes than would be expected?

            The top 3 highest paying jobs in the US are Anesthesiologists, Surgeons, and in third obstetricians and gynecologists (according to usnews.com).  All of these careers expectedly make over $200,000 annually; but with these jobs comes years of medical schooling and educational debts. 

            For the majority of us though, we do not have access to the skills that medical schooling requires, we may not have gotten the grades to get us into the finest law schools or prestigious engineering programs.  But did you know that successful hot dog vendors can make up to $100,000?  There are niche careers throughout our economy that yield high incomes.

            How about being an ice cream taster?  Ice cream tasters make about $60,000 annually.  Funeral Managers make about $80,000 a year, human statues (street performers) make about $100 an hour!  All of these jobs do not require years of education, or thousands of dollars of debt.  

            These unconventional careers are rare and far in-between.  So you may be wondering, what careers are in demand that pay well?  Our economy today is outsourcing unspecialized positions and replacing human hands with robots.  So what careers could possibly be in demand in the US today? 

            Unsurprisingly, the healthcare is not going anywhere soon; some of the most needed positions in today’s economy are physician assistants, nurses, and medical technicians.  You have probably seen the endless commercials for 2 year colleges that prepare you in a career with the medical field.  Well the reason these commercials are so common is that these careers are in high demand,  and will be in the distant future. 

            Medical careers do not require years of schooling as you have learned from the commercials and low ranking positions such as medical assistants and billing and coders still reap high incomes, averaging around $50,000-$70,000.

            Another extremely in demand career are programmers and IT specialists. The US has been a technological force for decades and continues to progress.  With this progression there is the need for more and more IT positions and skilled computer programmers.  Just like the medical careers, IT schools strongly advertise on television; that is because the jobs are in high demand, and are future proof.

            So next time you think of which career field you think you will want to join, don’t look at the expected jobs such as surgeons, lawyers, or engineers.  You could very well be better off as a hot dog vendor, or funeral manager!  High paying jobs are scattered everywhere; It just takes a little digging to uncover them.   

http://www.ehow.com/list_5481635_10-needed-jobs-future.html#page=5

http://www.forbes.com/sites/jacquelynsmith/2013/05/23/10-unusual-jobs-that-pay-surprisingly-well/

http://www.usnews.com/news/articles/2013/03/29/the-10-highest-paid-jobs-in-america