My 30th Birthday, yo!

      I predict that the nation takes option B. What the nation will do is take control of all the big industry like steel, lumber, etc. The nation will also have stopped allowing corporations from other countries from taking or buying land in the U.S, so the U.S can use it themselves. The U.S. is also going to invest heavily into renewable energy, which would lessen our reliance on buying foreign oil. The U.S. will also invest more into environmental friendly products (like light bulbs), so the U.S could save the money they would have originally  used to help clean polluted environments so they can continued to be used for creation of new products. The U.S will also invest heavily in recycling so we don't have to take more from the environment, or buy these products from outside countries. The U.S. will have become better at balancing budget by making sure the government spends less money than it takes in (as realistically as possible).

      The last twelve years have been really hard on the American people. Tax rates have increased dramatically. The average person (middle class) will pay thirty percent of every dollar they make to the government. It becomes very hard to get a credit card or loans. The wealthy citizens (upper class) is paying a minimum of fifty percent of every dollar they make to taxes. It has become hard to survive for the poor, there is a temporary period where jobs are hared to find. Then when the debt has decreased to a manageable level, job numbers increase after about ten years, and the U.S. people can start to live better and survive easier again.

Question: I would like to know more about what would happen to the U.S population if China decided to sell/give out the U.S. dollars/debt they hold. Would this cause a famine or housing loss in the U.S? Would the U.S go to war? How much of the world population die or be effected negatively if the U.S dollar became worthless? I'd also like to know what country would then dominate or be the most important economy in the world and what would they do to the U.S. people (help them or "enslave" them)?

Charles Ponzi Research Paper

Charles Ponzi and His Fraudulent Scheme

The years immediately following World War I were a time of great prosperity for countless individuals in America. The rise of wealth in America caused many people to invest their money in order to obtain a quick fortune. This is significant because it allowed Charles Ponzi to implement an extremely fraudulent scheme that caused the creation of the Security Exchange commission which helps to halt fraudulent investment schemes that occur in the American society. Charles Ponzi was an Italian Immigrant that devised a fraudulent scheme that hoodwinked thousands of investors of millions of dollars in 1919 to 1920, which eventually led the creation of laws to prevent the reoccurrence of similar schemes because these added up to help cause the Great Depression.

In the article by Historic U.S. Events (referred to as HUE from now on)“Charles Ponzi Cheats Thousands in Investment Scheme, 1919-1920” Charles Ponzi was an Italian Immigrant whose origins was that of an affluent family gave him a one way ticket to the United States due to his inability to meet family expectations.  In another article written by DISCovering U.S. History (referred to DUH from now on) “Charles Ponzi Cheats Thousands in Investment Scheme, 1919-1920” Charles Ponzi in 1917 he began to work with his father-in-law as a fruit dealer. In 1919, Ponzi received a business letter holding a international reply coupon that had cost the sender the equivalent of one cent in Spain to send to him. This letter provided Ponzi the idea to take advantage of the exchange rate disparities in the trade of international reply coupons.

In the article by U*X*L Biographies, (referred to as UXB from now on) “Charles Ponzi” Ponzi quit his job to focus solely on exchanging these coupons, which he would buy for one cent in his home country of Italy, and then exchange them for five cents in the U.S for a profit of four cents. In the article by DUH, Ponzi created the Securities Exchange company, a firm which was to perform international reply coupon transactions; consequently, this firm was made to cover the fraudulent scheme Ponzi developed to make quick money off of the investors who were deceived into thinking the coupons would make fast money. This fraud quickly became attractive to investors because it promised high yields of money back to the investors, advertising a 50% return in 45 days. What this deceitful scheme did was to pay early investors with high dividends of money Ponzi had received from later investors or from the investors’ own funds, which encouraged other investors to give Ponzi even more money. Written in the article by UXB, Ponzi collected fifteen million dollars from over forty thousand investors over an eight month period starting from August 1919. 

Many people had also referred to Ponzi as “the greatest Italian of them all” which he modestly denied, which a given reply was “But you discovered money!”; these claims were made because of the great success and popularity he had gained when attracting investors, and returning to them unknowingly their own or other investor money for high dividends. In the DUH article, Ponzi’s success had allowed him to use these proceeds to obtain control of several Boston businesses including banks that had made loans to him. He also had begun to live a lavish lifestyle with a mansion, He had become a hero to the immigrant community and small investors.

In the HUE article, Ponzi’s success eventually attracted the attention of Boston’s legal authorities. In early summer of 1920 Ponzi had successfully passed investigations conducted by the District Attorney’s Office, Postal inspectors, and federal attorneys; as a result, Ponzi utilized their inability to find illegal activity as “official pronouncements to lessen any suspicions that investors might have had”, which resulted in the investors trusting Ponzi with their money.The Publisher of the Boston Post, Richard Grozier doubted Ponzi’s claims, and decided to uncover Ponzi as a fraud. Grozier interviewed Clarence Barron of Barron’s Weekly, in which Barron claimed “it would be impossible for the investing genius [Ponzi] to turn over so much [claimed amount of] money [to the investors].” Ponzi responded with a claim that this scheme was “subterfuge for an even more inventive plan that he had developed and wanted to keep secret from Wall street speculators.” Now, even more investors trusted him with their money. Eventually, the Boston Post received an anonymous tip about Ponzi having been jailed in Canada many years before for a similar fraud to his coupon exchange. A few days later Ponzi was arrested and sentenced to five years in prison by Boston’s federal court, in which he served only forty months. He was then  tried by Massachusetts and sentenced to nine years where he escaped on bail to Florida. He eventually served his sentence back in Massachusetts, and then deported to Italy.

The Ponzi scheme didn’t have instant legal and economic impact on the U.S; however, his scheme did contribute to the stock market crash of 1929, and a close collapse of the banking system. As a result, congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934, which required registration with the new Securities Exchange Commission (SEC) before securities were able to be sold. Many frauds, but most notably Ponzi’s also led to the Investment Company Act of 1940 , which required licensing and put limitations on the activities of individuals partaking in security sales or distribution. It was easier for the SEC to stop fraudulent schemes by citing technical breaches of SEC regulations than by focusing of the actual fraud accusations. Ponzi scheme imitators still surface because people make investments in the hopes of getting rich quick. Also, the ability for Ponzi like schemes still arise is because of the SEC’s weakness in focusing on fraud with large amounts of money with few investors, while a large number of individuals investing little amounts of money isn’t as much of a focus. The significance of the Ponzi scheme illustrates that many people can be deceived into investing their money poorly, which can lead to harmful effects on the economy later down the road (which could range from a great depression to even no harmful effects).

Works Cited

"Charles Ponzi." U*X*L Biographies. Detroit: U*X*L, 2003. Gale Student Resources In Context. Web. 28 Nov. 2012.

"Charles Ponzi Cheats Thousands In Investment Scheme, 1919-1920." DISCovering U.S. History. Detroit: Gale, 1997. Gale Student Resources In Context. Web. 28 Nov. 2012.

"Charles Ponzi Cheats Thousands in Investment Scheme, 1919-1920." Historic U.S. Events. Detroit: Gale, 2012. Gale Student Resources In Context. Web. 28 Nov. 2012.

Fiscal Cliff

     The Fiscal Cliff is thought of as the 500 billion of tax increases and spending cuts that will influence the nation's people and take affect after January 1 (called fiscal year of 2013, etc. ). Ben Bernanke made this term to warn the nation of the dangerous and unavoidable drop off in the direction of the nation's tax increases and cuts. For instance, the Bush Tax cuts of 2001 and 2003 were extended to 2012 (they were originally going to expire in 2010), lowered the taxes on the wealthy to 35%. Obama kept this tax rate here even though he desired to raise it to 39% because the economy was still in a weakened state in 2010. If he had raised the taxes, the government could have brought in one trillion dollars in taxes that would have helped lower the country's deficit.
     The Alternate minimum tax (AMT.) is apart of the nation's fiscal cliff because this is a tax people pay on top of their regular income tax. This tax is designed to prevent people with a very high income from utilizing special tax benefits to pay no to small amounts of money in taxes. But, now this tax reaches people who don't have a high income or don't claim many special tax benefits, which causes many individuals to pay more taxes unduly. Also, this tax is theoretically supposed to determine the amount of money a person would pay a specific income. This is part of fiscal cliff because it's a type of tax that influences the amount of taxes the people pay, but also shows that this tax is hard to come to an agreement on who gets taxed, anyone can be taxed.
      The Sequester is also another example of the spending and tax cuts that is the Fiscal Cliff. The sequester is a package of automatic spending cuts that makes up the Budget Control Act (BCA) that was passed in August 2011. This is projected to cut 1.2 trillion of spending split evenly on defence and discretionary domestic spending (exempting war spending, and spending on social security and Medicaid) over the years of 2013 to 2021. This can cause problems because it may lead to major job loss to companies subsidized by the government, but also the aid given to the people like social programs. This is supposed to help keep the economy from obtaining a too high debt by cutting its spending.

My Manifesto, yo!

     The government should have a larger involvement in directing the economy because if the government did there would be a better environment for everyone. However, this is believed only if the government is going to use the funds it would obtain from having a large role in the economy towards helping the people in a variety of ways. Also, if the government had a larger role in directing the economy this would stop the corporations from having a heavy influence on the economy, and thus also the harm that results to the environment. The government should have direct influence on the major industries of the country because it would be able to gain profit to use to help the people, but without harming people wanting to start businesses.

     Taxes should be collected from pay checks because it is easier for workers to receive a check with taxes taken out then having to pay multiple sums or one big sum during the year, and this way is more efficient and faster. The government should tax everyone that works because they are earning money that could and should be used to helping everyone in the country. The taxes should be used to support all public services like emergency, public safety (police, firemen, etc.). The funds should also be used to maintaining a safe sanitary systems, also to repairing, restoring and maintaining the environment because humans can't survive without a world. The money should also be used towards green energy, which would let the country get off oil because the use of oil harms the world. Taxes that should be levied are income, property, and taxes on the use of oil products (which these taxes could be used to invest in green energy). The more the income the higher the taxes should be because these individuals can afford the taxes.

     The government should play a big role in health care because it should put laws forth that allow everyone to get health insurance. Because right now not everyone can or is eligible to receive, which is bad because people die without the help of insurance, and also stops the government from having to pay the bill of people from going to the hospital when they don't have insurance. Also, this should raise the health of the people overall. They should have a bigger role in education because it would allow everyone a chance at education, the government should make it free to go to college, which would also boost the economy because more people would be educated, and more technology, etc, would be created to help the country as a result of free college. The government should play a big role in social services because some people aren't able to provide for themselves and need help like the disabled. They deserve help because everyone deserves a chance at life, and even if they are disabled they can still give back to the country or people.

Minimum Wage

     Minimum wage should continue to be in practice because it allows many people who would otherwise be in extreme poverty or die, to at least survive with the bare minimum. Without this wage many people wouldn't even be able to have or support their current families. Additionally, without a minimum wage their would be high unrest among the workers who make minimum wage with the government because they wouldn't be able to survive without the wages they would earn without a minimum wage. Furthermore, these workers would eventually elect a president or other public official to office that would promise to create a minimum wage for them to survive. If there was no minimum wage in the U.S. there would be an increased amount of people applying for welfare and food stamps, etc., or there would be a massive amount of people that will die of starvation, sickness, or from the elements because they don't make enough money to support themselves; however, there would be some people that wouldn't die without a minimum wage they would be highly depressed and hard worked in order just to survive without minimum wage (especially in our economy where prices are raising every year for all sorts of goods, etc.).

Price Floors

     I think that prices floors should be used in the economy for food goods like corn, tomatoes, etc. This should occur because it keeps these goods at a constant (if at the price floor) price/value. This is important because it there is a surplus of one of these goods one year, farmers won't be forced to quit farming because they can't sell their goods at a high enough price to keep their farms going. If this were to happen countless people would be affected in later years because there would be less farmers, thus less food and people would start to starve and food prices would sky rocket because of the shortages of food. Even though there would be surplus of these goods in the market, it is better to keep farmers farming and lose food, than to lose the source of those who make our food (and starve).

Price Ceilings

     I agree that there should be a price ceiling for some goods in our economy. This is because if there wasn't a price ceiling for some products many people wouldn't be able to afford them. For example, the price ceiling on apartments in New York allow many people afford housing that they wouldn't otherwise have without an affordable price ceiling in place. This would cause some market imbalances for landlords, etc. because they wouldn't buy many services for the upkeep of these buildings because they can only charge their tenets a certain amount for rent. However, this is an acceptable trade off in the economy because even though this may lessen jobs for those whose job it is to upkeep these buildings; people will have shelter from the elements, which helps lessen chances of a person (many) from becoming sick or dying from exposure to elements, etc. and thus lessens the amount of people that would occupy a hospital. Even though there would be a shortage of apartments making it harder for many to find homes, it's better for many to have homes than a few to have homes (while the many have a high chance of being sick and dying).

Supply Wrap Up

Demand Finale

Elastic/Inelastic Demand 

     An example of elastic demand in my life occurs most frequently in the grocery store for me. For instance, my mother drinks a lot of soda but we can only buy so much at a time because the cost for one 20 pack of sprite costs about $6.99. When it's at this price we only buy one at a time because we wouldn't be able to buy much of any other food. However, when sprite is at a price of $4.99 we will buy two packs because my mother is willing to pay because it's cheaper than two at a higher price. I always hope that the sprite is on sale because when my mother doesn't get to drink sprite in the morning she easier to set off, so I look out for the price of sprite in the store every time I go. 

     Inelastic demand also occurs in my life by way of the grocery store. In my family of five we drink a lot of milk, at least 3 gallons a week (sometimes more, for sure more during the summer when we eat a lot of PB&J's). The price of the type of milk we drink  right now is about $2.29, which is a product we must have available everyday because we eat cereal with milk for breakfast every morning, sometimes with dinner when we have PB&J's, and with our lunch of PB&J's on the weekends. I know that with as much milk as we drink (I believe though that I'm probably the one who drinks it the most because I eat PB&J's all the time) that we will buy it up to a price of at least $4, my parents may even buy it if it went up to $5. Milk is important to my family that if its price went up to $5 we would have to give up other food stuffs we buy, like buying less meat (beef and chicken) so we would be able to afford the milk. (I wouldn't like this very much because I would have to drink less milk with my meals so my whole family could drink equal amounts of milk, while budgeting how much we spend on it).

     What we've studied in class about elastic and inelastic demand has shown me that the market for elastic products is strongly influenced by the price, which in my life the prices of elastic products heavily influences whether I'll buy it. Also, for inelastic products the prices don't affect the quantity that will be demanded, in my life it is the same because if milk price went up we would still buy it; however, we would probably give up an elastic product all together.

Question: I would like to know if elastic demand products give great profits to companies? (Can they manipulate how much profit they'll make by changing the product's price and make a better profit than if the product was at market price?). I would also like to know how companies that produce inelastic products do in the market profit wise, do they make more profit than a company that makes elastic products? Do they have the ability to make more money than an elastic product producing company or will they make less of a profit?

Wrap Up Demand

Elastic and Inelastic Diagrams/Curves

Demand Headlines!

Headlines

1. Complementary Demand: " New Lord of the Rings movie released today, as the poster industry sales increase!"

2. Substitute Demand: "Digital book prices drop, Kindle sales rise!"

3. Elastic Demand: "Hershey's chocolate prices at an all time high, while millions are plagued with depression!"

4. Inelastic Demand: "All drinkable water now comes bottled at a price of $25.00 a bottle!"

     In the United States, due a drought occurring all over the U.S, all natural sources of drinkable water have either dried up or are dangerously low. Due to the big corporations of Nestle, Pepsi and Coca Cola refusing to restore lakes and ground water environments from their overuse and removal of millions of gallons of water (for free) per year water has become scarce, and what is left was contaminated by the plants of these big corporations. Additionally, the U.S government has charged these companies with environmental endangerment; and thus, making the companies pay for the restoration of all environments their factories have caused harm. These companies also must provide clean FDA regulated water (multiple teams of regulators supervising this process). Currently, all available water is highly priced, but as soon as these companies have water proccessing plants up and running the price of water will lower with the hope that with environmental restoration of water locations that there may soon be more water available to the world.

Question: Why are corporations allowed to buy land that they use to make a profit, but then aren't expected or won't clean up the land they contaminate or destroy? Why aren't they made to help the communities their factories harm with pollution and the chemicals they use?

Demand Schedule and Demand Curve

URL: https://waypointprod.blob.core.windows.net/blogfilestore/storage/blogs/headlines/files/2012/7/14/xbox360_halo4_320gb_console_us_groupshot.jpg

Market Economy

Market Economy

     I think that the market economy is good to an extent. I say this because this type of economy allows many changes to occur gradually. It also allows individual freedom to anyone who wishes to make their own decisions in the market, but also allows others to choose what they want to produce, which provides a variety of goods. The market economy can also be good because there is limited government interference which allows the government to be free for other tasks. 

     What I don't like about the market economy is that the government has to take care of many public goods. I have experience with this because my mother has healthcare through the government, and she doesn't receive the best of health care. The reason being she has long wait periods for paperwork to be looked at, but she also she doesn't meet some criteria to get a dental plan through the government medical care, meaning she has teeth pain all the time. What I also don't like about the market economy is that Health insurance companies won't accept my mother because she is extremely ill (and has a high chance of dying before they make a profit off of her), and she has to go through the government to get health care.

Question: I would like to know if it would be possible to make laws that require Health insurance companies to accept anyone no matter their illnesses. I would also like to know how health insurances pay the high medical bills when a persons monthly bill is low (how do they make a profit off of a person)?

Opportunity Cost

     Opportunity Cost in My Life.

     When I was about 14 years old I had saved up about $100. I wanted to save this money so I would be able to buy my own Ipod; however, I also wanted to buy books because I love reading. Then, one day my father saw an add in the Sunday Oregonian for a Xbox 360 on sale for $199.99, so he offered to pay the other half of the price right then for me if I decided to stop my incoming allowing until I had paid off what my dad had pitched in to help me get the Xbox 360. I chose to get the Xbox 360.

     The opportunity cost of this was that I wasn't able to get the Ipod, and because of that I had to wait until Christmas until I received my first Ipod Shuffle. The other cost of this was I didn't become familiar with I-Tunes until I had the Ipod; additionally, during that summer I didn't receive my allowance (*and stopped permanently afterwards). I wasn't able to buy small things like candy, etc.; however, during that summer I was able to read more (without an Ipod for distraction) and kept my mind sharp, I also started to understand the concept of buying only what you need, not always spending money on items I wanted. Another opportunity cost, I wan't able to buy the books, and lost out on the opportunity to learn more from the books I might have found when I browsed in the store.

      When I look back on the decision, I believed I made a good one because I can always checkout books from the library both school and public (this summer I finally made excellent use of the public library-I read over 30 books, probably more....). And I received an Ipod for Christmas later that year. And I also received a newer Ipod Nano the following Christmas, and finally my Ipod Touch the febuary following the next Christmas by "working" (cleaning). And in the time since I bought my Xbox 360 I've had probably thousands of hours of fun playing it. I have also learned that when it comes to games I have excellent memory. But I have also had numerous problems arise from having the Xbox 360, like only playing it on the weekends because it is very distracting when one needs to do homework. But I have also learned that I like reading and learning more than  videogames (this summer, this concept finally took hold in me). 

Question: But I also wonder if I had chosen to save the money instead of spend it (which at 14, it was hard for me to save at all because I always wanted something new), what I would have been able to buy, and if it would have affected my life like the Xbox has. I would also like to know why items are priced the way they are today, even when I was younger because I want to know how those prices have affected me today.

Scarcity, Yo!

Scarcity, yo!

     I chose the image of the beach because in my family we don't  go on vacations, camping trips, or even a visit to the beach for the day very often because my family can't afford the gas it requires to get to the beach or take a vacation. So, we miss out on the opportunity to spend more time together having fun; additionally, we miss out on time to get away from our home to just relax and have fun.

http://upload.wikimedia.org/wikipedia/commons/thumb/8/86/Man_o'war_cove_near_lulworth_dorset_arp.jpg/300px-Man_o'war_cove_near_lulworth_dorset_arp.jpg