Taxes-How does the Government Spend Money?

The government collects taxes every week from working people. This money is spent on various things suchs as education, transportation, program funding, medicare and military exspenses. Below is a dollar bill chart that shows where each dollar goes for funding. Majority of the money goes to medicare ad social security (which is said to be diminished within the next 50 years.) The next highest amount of money goes into national defense which is basically funding for unnecessary wars. On the other hand, New York State spends money on things such as education, economical development and medicaid. There is not much of a difference between the way NYS spends their money and the way the Federal Government spends their money.

Savings and Debt

It is really quite amazing how easy it is to get into debt. A lot of people dont realize how easy it is until it is too late and they are already in debt. I think that the main problem with people is that they do not know how to manage their money and they end up over spending. They spend money on things that arent necessary and that is how they end up getting into debt. Another thing that contribute to their debt is finance charges. People dont usually factor in their finance charges when they are determining their budgets and that helps create more debt. I think Americans dont save money because they cant afford to, especially is places like NY. The cost of living is way too high, the salaries are not that great and in order to live you must spend your money on the things that you need. This leaves no opportunity to save money. I think many Americans depending on things such as pensions and 401K's to be there for them when they retire, but now those funds are slowly deminishing.

GDP Podcast Critique

The podcast i critiqued was david, anthony and mychele. I felt that the content of the podcast was good. It wasn't great but they did answer the basic questions and definitions for what GDP is. I thought that the recording was loud and clear. I could hear and understand everything that each one of them was saying. The images didn't exactly go with that they were talking about at every given moment but they did have to do with GDP as a whole. The podcast wasn't really creative but how creative can you really be with a podcast? I did feel it was educational and they did explain things and taught the listener something. Overall I think this podcast was good.

US Trade Deficit: Getting Better

What is this article discussing?

This article talks about the US economy expanding. If the US continues to export and grow in other countries, it will help our economy more than it has in over a decade.

What is a trade deficit?

A trade deficit occurs when a country imports goods from another country worth more then the value of its exports to that other country.

Why is the US trade deficit likely to go down in the future?

The US trade deficit is likely to go down because of all the business that the US economy is doing overseas. Because our exports are growing, it is helping our economy to become stronger creating more domestic jobs and a better domestic economy.

What kind of products is the US selling overseas?

A lot of products are being sold overseas. Everything from GM cars to KFC to the things needed to support the developing world such as factory machinery.

And what about the US dollar - how can a weak dollar actually help the US economy and the trade deficit?

American companies are sending more and more products overseas to countries that have a weaker dollar thus helping to make American goods more competitive in foreign markets.

Taxes- How Does The Government Spend Money?

Type of Tax Specific Tax: How are they collected?
Federal Taxes • Payroll Tax: collected from wages and salaries only
• Income Tax: collected from wages, salaries, rents, interest on bank accounts and dividends
• Corporate Income Tax: collected from a corporations net income
• Excise Tax: collected from the sales of items like gas, alcoholic beverages and tobacco
• Estate Tax: collected from a dead person’s estate
• Gift Tax: collected during the transfer of property between people

State Tax • General State Tax: collected from general sales
• Excise Tax: collected from the sales of items like gas, alcoholic beverages and tobacco
• Estate Tax: collected from a dead person’s estate
• Inheritance Tax: collected from a person after they inherit something from a dead person

City/Local Taxes • General Sales Tax: collected from general sales
• Excise Tax: collected from the sales of items like gas, alcoholic beverages and tobacco
• Property Tax: collected from assets like stocks, bonds, houses, cars and artwork

Miscellaneous Taxes • Pollution Tax: collected from companies that produce air, water, oil or water pollution.

Student Loans

Why do you think some of these culinary school students took out such large student loans? What is your feeling on student loans?

I think students in general take out large loans because they arent given the financial aid that they need to attend the college of their choice. Everyone wants to go to a good school and become successful. Eut college is a very large expense, an expense that most people cant afford. therefore loans are taken out for what they cannot pay for or didn't receive in financial aid.

I personally think student loans are a way to keep people in debt. Students just become adults, dont have any credit and arent too familiar with finance can become trapped when they take out loans. Many parents dont know much about loans either which doesn't help the students at all. With a country worth trillions of dollars, why is it that our children cant further their education without having to spending nearly $100,000 in tuition alone ?

Do you plan on taking out any student loans? If so - for approximately how much

Currenty I am in the process of taking out a student loan. I have $7,500 in a stafford loan given to me by my college. $3,500 of that loan is a subsidized stafford loan which doesn't gain any interest while im in school and i must begin to pay back 6 months after I graduate. The other $4,000 is an unsubsidized stafford loan which has an interest rate somewhere around 6%. I also have a balance of $9,704 which I was going to take out in a private loan but my uncle has decided to loan me the money and I can pay him back, interest free!

Critique of Federal Reserve Podcast

Tiana and Sharonna's Podcast http://mmoloneyiths.com/econ/podcasts/fed/tiana-sharonna.mov">


This podcast was really good, especially compared to mine. They had a good set up of their information and how they answered the questions. The images coincide with the information that was being said throughout the podcast. Their voices were very clear and I could hear what they were saying perfectly. They discussed all the aspects of The Fed and even mentioned some things I did not know. The podcast wasnt outstandingly creative but it was somewhat creative. I would say this podcast was definately educational and interesting. Great sound effects Tiana.

Compound interests and the rule of 72

Compound interest is interest earned on previously accumulated interest as well as the principal. Compound interest is very good for saving and earning money because you accumulate "free" money. Compound interest keeps the money that you originally invested plus adds the extra or the interest money. An example of this is if you had $2000 in the bank and added $500 every year for 10 years with 5% annual interest (which is very very rare), you will have accumulated $9,800.!
The Rule of 72 is a rule that shows how long it will take to double the money you have invested. The rule is to divide the interest rate by 72 and the answer you get will be the number of years it will take to double the money you have invested. Example if you have $5000 invested with a 5% annual interest, it would take 14.4 years for your money to double (72/5.)

Insider Trades

There were 13 people arrested on March 1, 2007 accused of trading as insiders. The scheme involved 4 investment bankers, hedge funds, day traders, lawyers and even some supervisors who found out about the trading and blackmailed traders in order for them to keep quiet about the scheme. Nine of the defendants have been arrested and 4 pleaded guilty to crimes including bribery and securities fraud. The tactics that these traders used were all too familiar to the investigators: tipping traders about potential up/downgrades of stocks, leaking information about stock prices moving and potential stock mergers. Two of the men arrested met in Grand Centrals "Oyster Bar" to discuss debts owed to one another and exchange cash made from the profits of insider trading. One of the men would give his partner tips on rating changes and in return his partner would make quick changes to his funds and gain a huge profit. Over a 5 year period one of the accused men was said to have made over $5 million in illicit profits.

Dow Jones Down

Why did the Dow go down? The Dow went down because the Chinese stock market crashed. When the stocks crash people start selling their stocks for lower and lower amounts of money. This in turn makes the stock market go down. How does this decline compare to the other famous declines (Great Depression) ? this decline compares to other declines such as the depression because it affected people around the world. The GD happened in the United States but it ended up affecting many different countries around the world and international trade declined rapidly. This is very similar to what happened with the Dow. What will you do with your socks ? well I decided to buy some smaller stocks because they are cheaper now and they will probably make more money since the market went down. Is this a time to buy since prices went down? This would definately be the time to buy stocks since the prices went down. Stocks are less money now and they may have a much bigger gain soon.

Opportunity Costs

An opportunity costs is the value of the next best alternative that must be given up when a choice is made.

Example: the opportunity cost of studying on a Saturday night is the fun you are missing by not going to the party.

Economic Systems

Traditional Economies: a type of economic system where people's economic role are the same as their parents and grandparents. These types of economies are usually found in countrie like Asia, South America and Africa. These people harvest their own crops on their own land. They're past and tradition determines their way of life.

Centrally Planned (Command) Economy: this is the type of economic system where the government controls is the main decision maker. There is no one person who can inpendently open and run a business. The government decides what good and services can be used and they delegate these services.
Market Economy: this type of economic system is one where the nations economic decisions are the results of individual buyers and sellers in the marketplace. The U.S. has a markey economy. This is sort of like a "democratic" economy. You can choose to where anywhere you like as long as there is a job opening. You can open your own business and run it. You may do extremely well with your business but if it is not popular with the public, you will not be in business for long.
Mixed Economy: there are 3 different types of economic systems capitalism, socialism and communism. No one country has a 100% capitalism, socialism or communism system. All countries have mixed economies which are combinations of 2 or 3.

Investment Strategy

I did not have a strategy when I began to invest and I should have because my stocks are not doing well. I have only invest in 3 stocks but I plant to buy maybe 2 or 3 more. I want to find a smaller company to invest in because as Mr.Moloney said they are more likely to change and make money.

Investments

I want to invest in Citigroup, BP, Walt Disney, Yahoo and Google.