Alternative Investment Guide to Freedom – Free Educational DVD!
Hi readers,
I found this free DVD on the internet - and I have found it extremely informative.
I was amazed at the possibilities and strategies that were presented to me, I just knew that I had to take action and give them a go. Over the years I have spent countless dollars educating myself in the area of investing but never really learnt how to get started.
I am so glad to have stumbled across this DVD as now I am on my way to creating a better quality of life. I can honestly say, this is worth checking out for yourself - after all it is free, so you have nothing to lose!
Click here to have your world opened to a wide range of possibilities:
http://www.21stcenturyacademy.com.au/cmd.php?af=1161523
I found this free DVD on the internet - and I have found it extremely informative.
I was amazed at the possibilities and strategies that were presented to me, I just knew that I had to take action and give them a go. Over the years I have spent countless dollars educating myself in the area of investing but never really learnt how to get started.
I am so glad to have stumbled across this DVD as now I am on my way to creating a better quality of life. I can honestly say, this is worth checking out for yourself - after all it is free, so you have nothing to lose!
Click here to have your world opened to a wide range of possibilities:
http://www.21stcenturyacademy.com.au/cmd.php?af=1161523
A Simple Benefit of Offshore Banking is Seen in Offshore Savings Accounts
By Andrew E. Northand Gary H. Edwards
A simple aspect of offshore banking is seen in offshore savings accounts. In many tax advantaged locations interest on deposits is not deducted. Although the saver may need to declare savings interest "back home" the ability to let savings compound throughout the year on the untaxed balance will increase the return on your savings.
Interest on a certificate of deposit may be paid quarterly offshore but not be taxable in your home jurisdiction until you return the money to your home jurisdiction. Tax laws will vary from country to country and from offshore jurisdiction to offshore jurisdiction. However, banking in tax advantaged jurisdictions will usually save you money.
If you allow your savings account to accrue over the year and pay taxes "back home" only at year's end you will make a higher compounded rate throughout the year with will in turn accrue over the years ahead of what you would have seen with an account that stayed in your home country.
This same principle can apply to trusts, off shore funds, and investment bonds as well. If you are uncertain about the tax laws in your home country talk to your accountant. If you want to find a stable, trustworthy offshore banking jurisdiction you should talk to an offshore specialists about this.
Offshore funds, trusts, and investment bonds may be treated the same way depending upon your country of origin. In this case interest compounds tax free and is not taxed offshore upon withdrawal which is when the income from the investment vehicle will typically be taxed back home.
These any many other advantages becomes available by going off shore. Then the next question arises, about where and how to invest and save in tax advantaged locations.
Belize Offshore Banking
Opening an offshore bank account in Belize is easy. You do not even need to go to the bank. You can be introduced to a reputable, competent, trustworthy bank in Belize. You can set up your account online and by fax.
Belize has local, Belize banks, and international banks doing business in Belize. An offshore specialist can easily help you with the right banking choice for your needs. The banking guidelines in Belize provide you with unparalleled privacy and security in handling of your accounts and transactions.
In order to open an account in you need only provide your full name and a copy of your driver's license or passport, proof of your address, a utility bill for your address, and a reference from your current bank. Ideally you will need to have had a two year relationship with the bank that provides your reference.
Although the bank will need this information to open an account your personal information is not available to third parties without your knowledge and consent. You can do all of banking with your Belize offshore bank online from anywhere in the world.
Offshore Banking
This simply means that you bank in a country outside of your own. Banking offshore usually offers tax advantages as offshore bank interest is not taxed in the offshore location. Also offshore locations offer confidential, secure and convenient banking with access to your account from anywhere on earth.
These banks allow you to set up your accounts and do all of your banking on the internet. You never need to visit the bank. Many companies offer services and will help you choose a bank offering exceptional privacy and asset protection. Besides the advantages of banking tax free the banks will guard your privacy so that you can do business anywhere in the world without the world looking over your shoulder.
How Is a Belize Bank Account Taxed?
The answer is that a Belize offshore bank account is not taxed in Belize. Depending upon the tax laws in your home country you may have a tax liability there but income from your Belize account is not taxed and not reported to anyone except you.
Interest on money in your Belize offshore bank account is paid without deducting for taxes. Belize banks deal with you and not the government of your country. As such you may or may not have a tax obligation "back home" but that is not the business of your overseas banking partner.
You can bank online and carry a debit card for your account and use it anywhere in the world. You can transfer money in and out of your account in complete security and privacy. Your business is with your bank and their business is with you.
Offshore Trusts
If you would like to put money in trust for your grandchildren consider an offshore trust. Depending upon your tax jurisdiction there may be a substantial tax advantage in going offshore. Depending upon your home country and the offshore location you choose results will vary.
Offshore banks offering trust services in tax advantaged jurisdictions will typically have minimal taxation on trust income. The value of the trust will be allowed to grow and compound unencumbered by the level of taxes you might see "back home." When the trust money is made available to your grandchildren is typically when taxes will be taken out.
Talk to your accountant or tax lawyer about tax laws in your home country. Talk to the specialist about the advantages of offshore banking, trust accounts, and other savings vehicles in tax advantaged locations. Another option instead of a trust is an offshore foundation. Again, good planning with good council will reap the best rewards.
Many people see this as a shady operation and many myths comes alive remembering good old James Bond movies where money is transferred in a split of a second by just pressing a button where the bad guys retreat under the palm trees on some desolate island in the Caribbean ocean, for then moments later being caught by the good guy.
Tax planning and saving for the future is legal. Tax evasion is not. There is a lot in it for a lot of private and corporate individuals. It is a myth that this is only for the high net worth of clients. With the age of internet this has become available to people all around the world. And the offshore banks keeps their doors open, welcoming both you and me.
Gary Edwards
An offshore formations and banking specialist working for several companies regarding offshore structures, formation of companies, foundations, banks and financial institutions.
Working for User Bancorp Ltd, which is providing private and corporate accounts, merchant accounts, offshore companies such as Belize IBC's (International Business Company), Panama corporations and foundations, wire transfer services, managed funds/forex, credit- debit- and prepaid card issuing
http://userbancorp.com
Feel free to contact me by e-mail: gary.edwards@userbancorp.com
Article Source: http://EzineArticles.com/?expert=Andrew_E._North
http://EzineArticles.com/?A-Simple-Benefit-of-Offshore-Banking-is-Seen-in-Offshore-Savings-Accounts&id=3881142
A simple aspect of offshore banking is seen in offshore savings accounts. In many tax advantaged locations interest on deposits is not deducted. Although the saver may need to declare savings interest "back home" the ability to let savings compound throughout the year on the untaxed balance will increase the return on your savings.
Interest on a certificate of deposit may be paid quarterly offshore but not be taxable in your home jurisdiction until you return the money to your home jurisdiction. Tax laws will vary from country to country and from offshore jurisdiction to offshore jurisdiction. However, banking in tax advantaged jurisdictions will usually save you money.
If you allow your savings account to accrue over the year and pay taxes "back home" only at year's end you will make a higher compounded rate throughout the year with will in turn accrue over the years ahead of what you would have seen with an account that stayed in your home country.
This same principle can apply to trusts, off shore funds, and investment bonds as well. If you are uncertain about the tax laws in your home country talk to your accountant. If you want to find a stable, trustworthy offshore banking jurisdiction you should talk to an offshore specialists about this.
Offshore funds, trusts, and investment bonds may be treated the same way depending upon your country of origin. In this case interest compounds tax free and is not taxed offshore upon withdrawal which is when the income from the investment vehicle will typically be taxed back home.
These any many other advantages becomes available by going off shore. Then the next question arises, about where and how to invest and save in tax advantaged locations.
Belize Offshore Banking
Opening an offshore bank account in Belize is easy. You do not even need to go to the bank. You can be introduced to a reputable, competent, trustworthy bank in Belize. You can set up your account online and by fax.
Belize has local, Belize banks, and international banks doing business in Belize. An offshore specialist can easily help you with the right banking choice for your needs. The banking guidelines in Belize provide you with unparalleled privacy and security in handling of your accounts and transactions.
In order to open an account in you need only provide your full name and a copy of your driver's license or passport, proof of your address, a utility bill for your address, and a reference from your current bank. Ideally you will need to have had a two year relationship with the bank that provides your reference.
Although the bank will need this information to open an account your personal information is not available to third parties without your knowledge and consent. You can do all of banking with your Belize offshore bank online from anywhere in the world.
Offshore Banking
This simply means that you bank in a country outside of your own. Banking offshore usually offers tax advantages as offshore bank interest is not taxed in the offshore location. Also offshore locations offer confidential, secure and convenient banking with access to your account from anywhere on earth.
These banks allow you to set up your accounts and do all of your banking on the internet. You never need to visit the bank. Many companies offer services and will help you choose a bank offering exceptional privacy and asset protection. Besides the advantages of banking tax free the banks will guard your privacy so that you can do business anywhere in the world without the world looking over your shoulder.
How Is a Belize Bank Account Taxed?
The answer is that a Belize offshore bank account is not taxed in Belize. Depending upon the tax laws in your home country you may have a tax liability there but income from your Belize account is not taxed and not reported to anyone except you.
Interest on money in your Belize offshore bank account is paid without deducting for taxes. Belize banks deal with you and not the government of your country. As such you may or may not have a tax obligation "back home" but that is not the business of your overseas banking partner.
You can bank online and carry a debit card for your account and use it anywhere in the world. You can transfer money in and out of your account in complete security and privacy. Your business is with your bank and their business is with you.
Offshore Trusts
If you would like to put money in trust for your grandchildren consider an offshore trust. Depending upon your tax jurisdiction there may be a substantial tax advantage in going offshore. Depending upon your home country and the offshore location you choose results will vary.
Offshore banks offering trust services in tax advantaged jurisdictions will typically have minimal taxation on trust income. The value of the trust will be allowed to grow and compound unencumbered by the level of taxes you might see "back home." When the trust money is made available to your grandchildren is typically when taxes will be taken out.
Talk to your accountant or tax lawyer about tax laws in your home country. Talk to the specialist about the advantages of offshore banking, trust accounts, and other savings vehicles in tax advantaged locations. Another option instead of a trust is an offshore foundation. Again, good planning with good council will reap the best rewards.
Many people see this as a shady operation and many myths comes alive remembering good old James Bond movies where money is transferred in a split of a second by just pressing a button where the bad guys retreat under the palm trees on some desolate island in the Caribbean ocean, for then moments later being caught by the good guy.
Tax planning and saving for the future is legal. Tax evasion is not. There is a lot in it for a lot of private and corporate individuals. It is a myth that this is only for the high net worth of clients. With the age of internet this has become available to people all around the world. And the offshore banks keeps their doors open, welcoming both you and me.
Gary Edwards
An offshore formations and banking specialist working for several companies regarding offshore structures, formation of companies, foundations, banks and financial institutions.
Working for User Bancorp Ltd, which is providing private and corporate accounts, merchant accounts, offshore companies such as Belize IBC's (International Business Company), Panama corporations and foundations, wire transfer services, managed funds/forex, credit- debit- and prepaid card issuing
http://userbancorp.com
Feel free to contact me by e-mail: gary.edwards@userbancorp.com
Article Source: http://EzineArticles.com/?expert=Andrew_E._North
http://EzineArticles.com/?A-Simple-Benefit-of-Offshore-Banking-is-Seen-in-Offshore-Savings-Accounts&id=3881142
Growing Government Spending – Bad For the Economy
By Doug Cassada
As we have seen in the past year the federal government has grown at an alarming rate. If it continues we are headed down a perilous road. I would like to put aside politics and look at what the current administration is doing, which is a continuation of what the previous administration was doing but on steroids. Since both parties are to blame we need to look at why what is happening is bad for this country's economy.
I think most Americans can see that the spending that is going on in Washington cannot continue. You can't spend like that in your budget, you would go bankrupt. Most people understand economics from a simple supply and demand standpoint, low supply and high demand means prices will rise, low demand and high supply means prices will fall. The 'market' is always trying to find that price point where supply equals demand and everyone is happy.
What the Federal government is doing right now is spending money it doesn't have. In order to do that it is selling US Treasury bonds to foreign governments, mainly China. We will need to service that debt, pay the interest and the principle. But what they are spending this created money on is not going to produce anything to do that. It is going towards government programs that don't produce anything.
How do I know this? Because government programs, by definition, don't produce anything. They take tax dollars, something you earned producing something (unless you work for the government) and spend them on things that don't contribute to increasing productivity. That isn't necessarily a bad thing. There are legitimate jobs that government provides such as police, fire, roads, infrastructure and defense. All good things, but they don't increase productivity, in other words they don't add to the bottom line, they are liabilities. Necessary, but liabilities, they don't pay for themselves. Government only spends, it does not produce.
I think most Americans would agree that the deficits that this administration is creating cannot be sustained. The numbers are mindboggling. The deficits that are being created along with the liabilities that we have for Social Security and Medicare and Medicaid are at such numbers that most people's eyes just glaze over. What happens when those liabilities go beyond the ability of the government to tax? You can't tax 100% of people's earnings.
The Federal government needs to cut spending drastically. It will be painful to many and the decisions will not be popular because government programs have become so far reaching. It is the hardest thing for a politician to do. Nobody wants their subsidy cut or their favorite program cut and the politicians are all looking at the next election and getting re-elected. In an era of close to ten percent unemployment it is government jobs that is the fastest growing segment of the job market. It should be the exact opposite.
But like I said previously, government doesn't produce anything, it only spends. Who is paying for the salaries of these new government workers? If you have followed me at all so far, you already know the answer. If you don't get it yet, the answer is...You and I in the form of higher taxes. There is no way around it. This is how the government says it creates jobs. But these non-legitimate government jobs are paid for using tax money from people that don't work for the government. I hope you can see why this is not a good thing. Jobs need to be created in the private sector, not in government.
Right now the administration says that only those people who make above a certain amount will see their taxes increase. Unfortunately, there aren't enough 'rich' people to pay for all of this spending. It will come down to pretty much everyone. The problem with that is now you won't be able to spend that money or save it which allows the bank to lend it to some person or a business to purchase something that will increase productivity.
Productivity is what creates a growing economy. Government spending takes money from you and businesses and puts it to non-productive uses. That money would have been spent in the private sector and would have been used to increase productivity. And increased productivity, overall, means creation of new jobs and increased wages. What taxes and government spending does is removes all of the things that might have been done with that money to increase productivity and applies it towards things that don't produce anything, thereby not contributing to expanding the economy.
There is a book written after World War II by economist Henry Hazlitt called 'Economics in One Lesson'. It is available anywhere and does a very good job of explaining complex economic concepts in everyday language and situations. It is not long and only gets a little boring at times, but if you force yourself to read it you will learn and know more about classic economics than ninety percent of people in this country. Certainly more than ninety percent of those elected people in Washington. I dare you to read it.
Article Source: http://EzineArticles.com/?expert=Doug_Cassada
http://EzineArticles.com/?Growing-Government-Spending---Bad-For-the-Economy&id=3926484
As we have seen in the past year the federal government has grown at an alarming rate. If it continues we are headed down a perilous road. I would like to put aside politics and look at what the current administration is doing, which is a continuation of what the previous administration was doing but on steroids. Since both parties are to blame we need to look at why what is happening is bad for this country's economy.
I think most Americans can see that the spending that is going on in Washington cannot continue. You can't spend like that in your budget, you would go bankrupt. Most people understand economics from a simple supply and demand standpoint, low supply and high demand means prices will rise, low demand and high supply means prices will fall. The 'market' is always trying to find that price point where supply equals demand and everyone is happy.
What the Federal government is doing right now is spending money it doesn't have. In order to do that it is selling US Treasury bonds to foreign governments, mainly China. We will need to service that debt, pay the interest and the principle. But what they are spending this created money on is not going to produce anything to do that. It is going towards government programs that don't produce anything.
How do I know this? Because government programs, by definition, don't produce anything. They take tax dollars, something you earned producing something (unless you work for the government) and spend them on things that don't contribute to increasing productivity. That isn't necessarily a bad thing. There are legitimate jobs that government provides such as police, fire, roads, infrastructure and defense. All good things, but they don't increase productivity, in other words they don't add to the bottom line, they are liabilities. Necessary, but liabilities, they don't pay for themselves. Government only spends, it does not produce.
I think most Americans would agree that the deficits that this administration is creating cannot be sustained. The numbers are mindboggling. The deficits that are being created along with the liabilities that we have for Social Security and Medicare and Medicaid are at such numbers that most people's eyes just glaze over. What happens when those liabilities go beyond the ability of the government to tax? You can't tax 100% of people's earnings.
The Federal government needs to cut spending drastically. It will be painful to many and the decisions will not be popular because government programs have become so far reaching. It is the hardest thing for a politician to do. Nobody wants their subsidy cut or their favorite program cut and the politicians are all looking at the next election and getting re-elected. In an era of close to ten percent unemployment it is government jobs that is the fastest growing segment of the job market. It should be the exact opposite.
But like I said previously, government doesn't produce anything, it only spends. Who is paying for the salaries of these new government workers? If you have followed me at all so far, you already know the answer. If you don't get it yet, the answer is...You and I in the form of higher taxes. There is no way around it. This is how the government says it creates jobs. But these non-legitimate government jobs are paid for using tax money from people that don't work for the government. I hope you can see why this is not a good thing. Jobs need to be created in the private sector, not in government.
Right now the administration says that only those people who make above a certain amount will see their taxes increase. Unfortunately, there aren't enough 'rich' people to pay for all of this spending. It will come down to pretty much everyone. The problem with that is now you won't be able to spend that money or save it which allows the bank to lend it to some person or a business to purchase something that will increase productivity.
Productivity is what creates a growing economy. Government spending takes money from you and businesses and puts it to non-productive uses. That money would have been spent in the private sector and would have been used to increase productivity. And increased productivity, overall, means creation of new jobs and increased wages. What taxes and government spending does is removes all of the things that might have been done with that money to increase productivity and applies it towards things that don't produce anything, thereby not contributing to expanding the economy.
There is a book written after World War II by economist Henry Hazlitt called 'Economics in One Lesson'. It is available anywhere and does a very good job of explaining complex economic concepts in everyday language and situations. It is not long and only gets a little boring at times, but if you force yourself to read it you will learn and know more about classic economics than ninety percent of people in this country. Certainly more than ninety percent of those elected people in Washington. I dare you to read it.
Article Source: http://EzineArticles.com/?expert=Doug_Cassada
http://EzineArticles.com/?Growing-Government-Spending---Bad-For-the-Economy&id=3926484
Dubai Gets a New Lease of Life
By Shalini Agraawal
In a landmark development, Abu Dhabi announced a fresh infusion of US$ 10 billion to the government of Dubai thereby averting the possibility of a sovereign default. Holders of an Islamic bond that was backed by a sovereign guarantee were demanding repayment and Dubai was on the verge of reneging on its commitment if Abu Dhabi had not intervened and saved Dubai from the brink of a financial disaster. The incident, for sure, has sent a scare in the global financial markets weakening Dubai's credibility as an investment destination.
Dubai, the holiday destination of choice for millions of vacationers all across the world suffers from a systemic problem. It can no longer fund its ambition of being an 'international metropolis' only through oil revenues. It therefore, relies heavily on debt to achieve its objectives and has put itself in a precarious position. To pull itself out of such a shaky position, it badly needs to reschedule its debts with immediate effect. Debt rescheduling is critical for Dubai as it needs low cost credit to emerge out of the slump that has plagued its economy for over a year now.
Analysts closely observing the Middle-East financial market point out that Dubai's present problems arise of its Government's warped attitude towards international creditors. Though it is very easy to start a business in Dubai, closing it down is virtually impossible as Dubai has enacted laws that are heavily biased in favour of debtors. According to World Bank estimates there is only a ten percent chance of a creditor recovering his dues from Dubai's bankrupt companies.
The Government of Dubai needs to put in place a system that weeds out the bad apples from the barrel and rewards companies with strong corporate governance mechanisms by providing them easy access to low cost capital. Unless these systemic flaws are corrected and strong fiscal and monetary policies implemented which minimize the impact of economic uncertainties, Dubai will not be spared from the debilitating effects of another economic recession that might lead to a sovereign default by the Government of Dubai.
However, some industry analysts point out that in case of a sovereign default by the Emirate of Dubai in the near future; the impact of such a collapse will however be limited as Dubai combined GDP makes up only 0.1% of the global economy. If you are planning a holiday to dubai this year then be prepared to witness empty buildings and suspended construction projects-most notably 'The World' an archipelago of man-made islands that was for some critics, nothing but an exercise in ostentation.
However Dubai's worsening financial situation hasn't in any way reduced its allure amongst vacationers who are always on the lookout for cheap and exciting holiday deals to Dubai during the November to March season that is perhaps the best time to visit Dubai.
In spite of all these handicaps Dubai continues to attract millions of visitors each year who come to explore this exciting city state in the heart of the Arabian desert that offers deserts, beaches, mountains and artificial ski-resorts to those looking for a fun-filled holiday.
For More details about cheap holidays dubai, holidays to dubai, holidays in Dubai, holidays dubai, holiday for dubai visit our site http://www.awayholidays.co.uk/dubai/.
Article Source: http://EzineArticles.com/?expert=Shalini_Agraawal
http://EzineArticles.com/?Dubai-Gets-a-New-Lease-of-Life&id=3903338
In a landmark development, Abu Dhabi announced a fresh infusion of US$ 10 billion to the government of Dubai thereby averting the possibility of a sovereign default. Holders of an Islamic bond that was backed by a sovereign guarantee were demanding repayment and Dubai was on the verge of reneging on its commitment if Abu Dhabi had not intervened and saved Dubai from the brink of a financial disaster. The incident, for sure, has sent a scare in the global financial markets weakening Dubai's credibility as an investment destination.
Dubai, the holiday destination of choice for millions of vacationers all across the world suffers from a systemic problem. It can no longer fund its ambition of being an 'international metropolis' only through oil revenues. It therefore, relies heavily on debt to achieve its objectives and has put itself in a precarious position. To pull itself out of such a shaky position, it badly needs to reschedule its debts with immediate effect. Debt rescheduling is critical for Dubai as it needs low cost credit to emerge out of the slump that has plagued its economy for over a year now.
Analysts closely observing the Middle-East financial market point out that Dubai's present problems arise of its Government's warped attitude towards international creditors. Though it is very easy to start a business in Dubai, closing it down is virtually impossible as Dubai has enacted laws that are heavily biased in favour of debtors. According to World Bank estimates there is only a ten percent chance of a creditor recovering his dues from Dubai's bankrupt companies.
The Government of Dubai needs to put in place a system that weeds out the bad apples from the barrel and rewards companies with strong corporate governance mechanisms by providing them easy access to low cost capital. Unless these systemic flaws are corrected and strong fiscal and monetary policies implemented which minimize the impact of economic uncertainties, Dubai will not be spared from the debilitating effects of another economic recession that might lead to a sovereign default by the Government of Dubai.
However, some industry analysts point out that in case of a sovereign default by the Emirate of Dubai in the near future; the impact of such a collapse will however be limited as Dubai combined GDP makes up only 0.1% of the global economy. If you are planning a holiday to dubai this year then be prepared to witness empty buildings and suspended construction projects-most notably 'The World' an archipelago of man-made islands that was for some critics, nothing but an exercise in ostentation.
However Dubai's worsening financial situation hasn't in any way reduced its allure amongst vacationers who are always on the lookout for cheap and exciting holiday deals to Dubai during the November to March season that is perhaps the best time to visit Dubai.
In spite of all these handicaps Dubai continues to attract millions of visitors each year who come to explore this exciting city state in the heart of the Arabian desert that offers deserts, beaches, mountains and artificial ski-resorts to those looking for a fun-filled holiday.
For More details about cheap holidays dubai, holidays to dubai, holidays in Dubai, holidays dubai, holiday for dubai visit our site http://www.awayholidays.co.uk/dubai/.
Article Source: http://EzineArticles.com/?expert=Shalini_Agraawal
http://EzineArticles.com/?Dubai-Gets-a-New-Lease-of-Life&id=3903338
India – Union Budget 2010 Review
By Rita Jain
The Union Budget this year has aimed to focus on inclusive growth. The concerns of the common man including Income Tax have gone hand in hand with appreciable measures for improving investment, infrastructure and fiscal consolidation. As the country looks to 'quickly revert to a high GDP growth path' in the wake of 'uncertain times', concerns for inclusive growth targeting the disadvantaged sections form the defining features of the Budget. There are also concerns about a rise in inflation in the short term due to a combination of factors like low-base effects, petrol price hikes and strong consumption.
The announcements increasing the defense budget, healthy funding of infrastructure development schemes, stress on SEZs etc seem to be enough for a conclusive productive growth. Relaxation in Income Tax is expected to benefit a large section of society with broadened tax slabs, removed surcharges and increased exemption limits.
The new slabs include 30% tax on income above Rs 8 lacs, 20% tax on income between Rs5 lacs to 8 lacs and 10% tax on income between Rs1.6 lacs to 5 lacs. With new tax rates people having a taxable income above Rs 3,00,000 and up to Rs 5,00,000 will now attract a tax at a lower rate of 10% as against 20% earlier. If his income is Rs 5,00,000, his net savings will be Rs 20,600 along with 3% education cess. The new tax rates have put more money in the wallets of the middle income group. The other high points of the Budget are the GST road map, direct tax code and willingness to implement Parikh Committee's recommendations.
Agriculture has also been taken care of and Rs 3000 Crs have been allotted for the impetus of the agricultural sector in India. Besides this, farm loan payments have also been extended for six months. The subsidy on fertilizers is to be reduced. To strike a balance, there is also an announcement of a 2% subsidy on loans to farmers. With concern at the emergence of double digit food inflation, steps have to be taken to bring down inflation in the next few months. However, a hike in fuel prices and extended coverage of the service tax, the increased cost of commodities like jewelery, refrigerators, TV etc seem to take away the credit of a good budget.
In spite of all these facts, the Budget seems to give more than it takes and deserves an honest appreciation.
Rita Jain is a well known website author. With her growing interest in finance, she has written this article on the the review of Union Budget 2010. The exceptional growth and tremendous planning influenced her and here is she sharing her views on the union budget of India. For more details on finance log on to http://www.surfindia.com/finance/budget-india/ and our website http://www.surfindia.com/finance/.
Article Source: http://EzineArticles.com/?expert=Rita_Jain
http://EzineArticles.com/?Union-Budget-2010-Review&id=3851765
The Union Budget this year has aimed to focus on inclusive growth. The concerns of the common man including Income Tax have gone hand in hand with appreciable measures for improving investment, infrastructure and fiscal consolidation. As the country looks to 'quickly revert to a high GDP growth path' in the wake of 'uncertain times', concerns for inclusive growth targeting the disadvantaged sections form the defining features of the Budget. There are also concerns about a rise in inflation in the short term due to a combination of factors like low-base effects, petrol price hikes and strong consumption.
The announcements increasing the defense budget, healthy funding of infrastructure development schemes, stress on SEZs etc seem to be enough for a conclusive productive growth. Relaxation in Income Tax is expected to benefit a large section of society with broadened tax slabs, removed surcharges and increased exemption limits.
The new slabs include 30% tax on income above Rs 8 lacs, 20% tax on income between Rs5 lacs to 8 lacs and 10% tax on income between Rs1.6 lacs to 5 lacs. With new tax rates people having a taxable income above Rs 3,00,000 and up to Rs 5,00,000 will now attract a tax at a lower rate of 10% as against 20% earlier. If his income is Rs 5,00,000, his net savings will be Rs 20,600 along with 3% education cess. The new tax rates have put more money in the wallets of the middle income group. The other high points of the Budget are the GST road map, direct tax code and willingness to implement Parikh Committee's recommendations.
Agriculture has also been taken care of and Rs 3000 Crs have been allotted for the impetus of the agricultural sector in India. Besides this, farm loan payments have also been extended for six months. The subsidy on fertilizers is to be reduced. To strike a balance, there is also an announcement of a 2% subsidy on loans to farmers. With concern at the emergence of double digit food inflation, steps have to be taken to bring down inflation in the next few months. However, a hike in fuel prices and extended coverage of the service tax, the increased cost of commodities like jewelery, refrigerators, TV etc seem to take away the credit of a good budget.
In spite of all these facts, the Budget seems to give more than it takes and deserves an honest appreciation.
Rita Jain is a well known website author. With her growing interest in finance, she has written this article on the the review of Union Budget 2010. The exceptional growth and tremendous planning influenced her and here is she sharing her views on the union budget of India. For more details on finance log on to http://www.surfindia.com/finance/budget-india/ and our website http://www.surfindia.com/finance/.
Article Source: http://EzineArticles.com/?expert=Rita_Jain
http://EzineArticles.com/?Union-Budget-2010-Review&id=3851765
Armchair Economics – Capitalism, Consumerism, and Narcissism
By Tyler Williamson
Some people propose that today's youth and humans in general in this society comprise the most narcissistic, self-centered population the world has ever seen. On the other hand, some conclude that we are merely seeing a change or shift in norms and values over time. Many like to give humans the benefit of the doubt and assume the latter, when in fact the former is true. Needless to say, one of the main areas in which this selfishness and seeming narcissism can be seen is advertising. And not only can this selfishness be seen in advertising, but it is quite possible that the advertising itself inspires it. As an armchair economist, I believe some basic principles of economics and capitalism play a role as well.
Proponents of this generalized idea of an evolutionary shift of norms and values usually deny the presence of this apparent societal selfishness. Their seeming laziness encourages them to simply shove the issue aside, either to deal with it later (perhaps in future generations when it really becomes a problem) or not at all.
Journalists like Raina Kelley, however, choose to take the road less traveled and observe the present-day fundamental facts of society to correctly conclude that this population is comprised of some of the most self-centered individuals the world has ever seen, suggesting that we are experiencing "a narcissism epidemic."
How or why does she make this bold, absolutist conclusion? Well, honestly I do not know, but I choose to take the less traveled road with her and observe things myself, and there are indeed many factors that support her (and, agreeably, my) opinion. There are also many approaches that can be taken when considering the selfish-or-not dichotomy, the first being scientific.
British neuroscientist Sarah-Jayne Blakemore is able to conclude without a doubt that the present-day population indeed quite selfish. Specifically, she observed MRI scans of the brains of teenagers and adults after asking them specific questions. She demonstrates with her own study on the areas of the brain that when making decisions or choosing a course of action, teenagers largely do not use the part of the brain responsible for empathy and understanding, meaning that they think "less about the impact of their actions on other people and how they are likely to make other people feel." This region is known as the medial prefrontal cortex.
Blakemore claims that instead of using this region, teenagers use an area in the back of the brain called the superior temporal sulcus, which is responsible for the perception and imagination of actions, as well as the prediction of outcomes based on those actions. In other words, Blakemore is saying that teenagers immediately imagine the effects of their current choice and how it will affect them and virtually ignore the consideration of the possible impact on others. This concept is very important in that it provides a biological explanation for a specific behavior, namely a predisposition for teenagers to behave a certain way: selfishly.
How did this lack of empathy and understanding come about? And, if our grandparents and ancestors did consciously think about the effects of their actions on others, how or why did our brains evolve so drastically to become so seemingly selfish in nature, as Blakemore illustrates? Well, perhaps we should instead investigate the nurture aspect of the situation. In other words, I would argue that this evolution of the brain has stemmed from environmental factors, the primary factor being advertising. Psychologists and sociologists are all the time investigating whether a certain effect is born of nature (biological factors) or nurture (external, environmental factors). Sometimes they are even intertwined, as I believe the case is here.
The nature-versus-nurture argument is vast and is applicable to almost any observable situation or exigency in society, but here I believe the external factor of advertising through media has, over time, caused an evolutionary shift of the human brain. Perhaps the fact that we are constantly to exposed to so much individualistic, self-based advertising, our brains began to recognize the advertisements as the status quo, the normal ways of life, therefore our personalities reflect those fundamentally selfish ideals without us even consciously realizing it. Perhaps we are too caught up in our selfishness to recognize our selfishness, or perhaps we just don't want to. Or perhaps we enjoy the selfishness. I know I do, and I believe most economists would agree.
Samuel J. Scott takes a societal approach, pointing out that a major factor of self-absorption is of economic origin. He believes that it is currently impossible to move up the societal and economic ladders due to the past generations' disinterest in retirement and the current situation of the economy. Scott says that all we can do to pass the time is strive to obtain degrees and "choose to have fun, travel, and live life for ourselves."
Scott's assessment definitely seems relevant with the current economic conditions and the fact that it supports the claim that this generation is self-centered. Another important fact is that our economy here in the United States is based around consumerism. We are a self-interested society that consumes things in vast amounts, this consumption essentially being fueled by our ever-present selfishness. Thus, sales-driven companies exploit this selfish consumption by constantly finding different ways to appeal to us through advertising.
Furthermore, the concept of whether or not this selfishness is purposeful is irrelevant in Scott's analysis in that he puts the blame largely on the current economic situation. Although I agree with Scott up to a point, I cannot accept his overall conclusion that it is currently impossible to move up the societal and economic ladders. I think he is simply making an extremely pessimistic generalization about society and the American population in order to further enrich his opinion and the persuasiveness thereof. That said, his argument does emphasize and corroborate the notion that external factors are pushing us to behave this way and to "live life for ourselves." I would argue that perhaps our grandparents and ancestors are and were not as selfish as we are either because they simply were not exposed to the present-day individualistic forms of advertising, or because opposing ideals were implanted in their brains early on in their lives.
An important concept must be considered here though. Economics dictates that humans are rational and self-interested. We accept this, but for some reason society views this self-interest, as well as capitalism, consumerism, and profit maximization, as a bad thing, when in fact it is a great thing! I will explain more on this a little later. For now, let's consider some advertising as an illustration.
All advertising is targeted toward a specific demographic and usually attempts to appeal to the emotions and fundamental ideals of that particular demographic in order to evoke Scott's living-for-ourselves ideal. A successful, knowledgeable twenty-first-century marketing team can effectively persuade anyone to do almost anything these days. Moreover, advertising almost always encompasses a sense of individualism (as opposed to collectivism), usually in terms of self-improvement and self-help, which seem to be the primary, self-centered goals of humans nowadays. For example, consider the infamous weight loss supplement advertisements that guarantee that you can lose a thousand pounds in a matter of hours by simply taking a pill, all while relaxing in your leather armchair with the television remote in one hand and a coke in the other - armchair economics at its best.
Consider the reader's perception of the product in the aforementioned type of advertisement. I can see it now. The marketer would probably throw the ad for the weight loss supplement on a page in a popular magazine targeted toward women, like Cosmopolitan or People, for example. They would slap a picture of a beautiful young woman wearing a bikini with a body that probably took years to sculpt in the top left corner, and perhaps even put some before-and-after-type shots to emphasize the product's seeming effect.
The marketing team would also probably opt to put some outrageous statistical claims in bold-face print with phrases like "99.9% effective!" along with a few seemingly falsified endorsements from celebrities, doctors, and/or fitness experts. Sound familiar? I'm sure it does. That is because these types of ads work. They convert into sales. The owner of a marketing firm knows this; an expert economist knows this also, but he or she knows it is true because of the fact that humans are rational and self-interested.
Now let's look specifically at the tactics the marketer used here to grab the attention (and probably the money) of the reader. First, the ad appealed to the senses and drew on the emotions of a perhaps overweight female audience desperately wanting to be thinner. The second tactic is a logical approach through which the advertiser puts flashy, captivating, too-good-to-be-true statistics on the page to almost guarantee its effectiveness. Humans, being rational in nature, love when things make sense logically. Lastly, they usually pay famous people or experts to say something good about the product in question to emphasize its popularity and the fact that the reader is missing out on a great product.
You can find several, if not all of these types of tactics in nearly every type of advertisement for any type of product or service. It has become the norm for marketers to both create and then subsequently exploit these fundamental senses of self-centeredness, self-betterment, laziness, and individualism, among other things, in the target audience.
What about the "narcissism epidemic," though? Well, I would be slightly reluctant to casually throw around the term narcissism in describing the present-day population in that I do not exactly believe that we consciously and blatantly disregard the feelings of others; perhaps that is merely subconscious byproduct of the ad-induced self-interest. Either way, hopefully now Kelley's opinion rings a bit truer than it originally did.
Sometimes the advertiser's approach is direct and straightforward in that you know exactly why and how they are attempting to persuade you, and you are able to actively approve or disapprove of a specific advertisement or product. Other times, however, the effect is subliminal, and we do not consciously realize that our viewpoints, opinions, and essentially our brains, are being warped. Advertisers recognize and make use of this subliminal capturing of the target audience. It does not matter whether the ad is in a commercial, magazine, poster, newspaper, or whatever else; they all use the same approaches to achieve the same effect - sales. In that sense, I would like to propose a seemingly abstract concept based on a somewhat replicative structure.
I believe that advertising creates selfishness because the manufacturers doing the advertising are selfish. What I mean to say is manufacturers and entrepreneurs are merely rational, self-interested humans in a capitalist society surrounded by consumerism. In a free market economy, self-interest and its consequent selfishness and individualism are what create the general welfare of the individuals in society. The common man is able to buy microwaves, cell phones, and computers because of the original inventor's profit-driven self-interest, and this concept will always be true of a society with a free market economy. Politicians are quick to cite profiting as some sort of crime or negative act, when in fact it is beneficial and absolutely necessary for the welfare of the individuals of society.
On the other hand, if the inventor's original intention was helping others and allowing others to "profit," then perhaps the subsequent advertisements of his or her product or service would focus on collectivism and the genuine desire of the happiness of the target audience. This idealistic collectivism and seeming altruism is very rare, though, if it even exists at all. Although the emotional effects of advertising may seem of concern to only a small group of individuals, it should in fact concern anyone who cares about the future and welfare of our society.
Profit maximization, in relation to capitalism in a free market system, is both our savior, in that it provides us with a means by which consumption and subsequent satisfaction can occur, and our enemy (society's and politicians' viewpoint, NOT mine), creating and inspiring this aforementioned selfishness of society's individuals that everyone views as being a negative attribute. I would absolutely conclude that it is in fact, however, a very positive selfishness. I believe what is born of self-interest is self-interest, and that's what makes the world go 'round. Capitalism is one of my best friends, and I'll stick by it 'til the end.
Tyler Williamson runs a site about basic principles of economics that are applicable to everyday life and realistic situations. His site is called Armchair Economics.
Article Source: http://EzineArticles.com/?expert=Tyler_Williamson
http://EzineArticles.com/?Armchair-Economics---Capitalism,-Consumerism,-and-Narcissism&id=4032225
Some people propose that today's youth and humans in general in this society comprise the most narcissistic, self-centered population the world has ever seen. On the other hand, some conclude that we are merely seeing a change or shift in norms and values over time. Many like to give humans the benefit of the doubt and assume the latter, when in fact the former is true. Needless to say, one of the main areas in which this selfishness and seeming narcissism can be seen is advertising. And not only can this selfishness be seen in advertising, but it is quite possible that the advertising itself inspires it. As an armchair economist, I believe some basic principles of economics and capitalism play a role as well.
Proponents of this generalized idea of an evolutionary shift of norms and values usually deny the presence of this apparent societal selfishness. Their seeming laziness encourages them to simply shove the issue aside, either to deal with it later (perhaps in future generations when it really becomes a problem) or not at all.
Journalists like Raina Kelley, however, choose to take the road less traveled and observe the present-day fundamental facts of society to correctly conclude that this population is comprised of some of the most self-centered individuals the world has ever seen, suggesting that we are experiencing "a narcissism epidemic."
How or why does she make this bold, absolutist conclusion? Well, honestly I do not know, but I choose to take the less traveled road with her and observe things myself, and there are indeed many factors that support her (and, agreeably, my) opinion. There are also many approaches that can be taken when considering the selfish-or-not dichotomy, the first being scientific.
British neuroscientist Sarah-Jayne Blakemore is able to conclude without a doubt that the present-day population indeed quite selfish. Specifically, she observed MRI scans of the brains of teenagers and adults after asking them specific questions. She demonstrates with her own study on the areas of the brain that when making decisions or choosing a course of action, teenagers largely do not use the part of the brain responsible for empathy and understanding, meaning that they think "less about the impact of their actions on other people and how they are likely to make other people feel." This region is known as the medial prefrontal cortex.
Blakemore claims that instead of using this region, teenagers use an area in the back of the brain called the superior temporal sulcus, which is responsible for the perception and imagination of actions, as well as the prediction of outcomes based on those actions. In other words, Blakemore is saying that teenagers immediately imagine the effects of their current choice and how it will affect them and virtually ignore the consideration of the possible impact on others. This concept is very important in that it provides a biological explanation for a specific behavior, namely a predisposition for teenagers to behave a certain way: selfishly.
How did this lack of empathy and understanding come about? And, if our grandparents and ancestors did consciously think about the effects of their actions on others, how or why did our brains evolve so drastically to become so seemingly selfish in nature, as Blakemore illustrates? Well, perhaps we should instead investigate the nurture aspect of the situation. In other words, I would argue that this evolution of the brain has stemmed from environmental factors, the primary factor being advertising. Psychologists and sociologists are all the time investigating whether a certain effect is born of nature (biological factors) or nurture (external, environmental factors). Sometimes they are even intertwined, as I believe the case is here.
The nature-versus-nurture argument is vast and is applicable to almost any observable situation or exigency in society, but here I believe the external factor of advertising through media has, over time, caused an evolutionary shift of the human brain. Perhaps the fact that we are constantly to exposed to so much individualistic, self-based advertising, our brains began to recognize the advertisements as the status quo, the normal ways of life, therefore our personalities reflect those fundamentally selfish ideals without us even consciously realizing it. Perhaps we are too caught up in our selfishness to recognize our selfishness, or perhaps we just don't want to. Or perhaps we enjoy the selfishness. I know I do, and I believe most economists would agree.
Samuel J. Scott takes a societal approach, pointing out that a major factor of self-absorption is of economic origin. He believes that it is currently impossible to move up the societal and economic ladders due to the past generations' disinterest in retirement and the current situation of the economy. Scott says that all we can do to pass the time is strive to obtain degrees and "choose to have fun, travel, and live life for ourselves."
Scott's assessment definitely seems relevant with the current economic conditions and the fact that it supports the claim that this generation is self-centered. Another important fact is that our economy here in the United States is based around consumerism. We are a self-interested society that consumes things in vast amounts, this consumption essentially being fueled by our ever-present selfishness. Thus, sales-driven companies exploit this selfish consumption by constantly finding different ways to appeal to us through advertising.
Furthermore, the concept of whether or not this selfishness is purposeful is irrelevant in Scott's analysis in that he puts the blame largely on the current economic situation. Although I agree with Scott up to a point, I cannot accept his overall conclusion that it is currently impossible to move up the societal and economic ladders. I think he is simply making an extremely pessimistic generalization about society and the American population in order to further enrich his opinion and the persuasiveness thereof. That said, his argument does emphasize and corroborate the notion that external factors are pushing us to behave this way and to "live life for ourselves." I would argue that perhaps our grandparents and ancestors are and were not as selfish as we are either because they simply were not exposed to the present-day individualistic forms of advertising, or because opposing ideals were implanted in their brains early on in their lives.
An important concept must be considered here though. Economics dictates that humans are rational and self-interested. We accept this, but for some reason society views this self-interest, as well as capitalism, consumerism, and profit maximization, as a bad thing, when in fact it is a great thing! I will explain more on this a little later. For now, let's consider some advertising as an illustration.
All advertising is targeted toward a specific demographic and usually attempts to appeal to the emotions and fundamental ideals of that particular demographic in order to evoke Scott's living-for-ourselves ideal. A successful, knowledgeable twenty-first-century marketing team can effectively persuade anyone to do almost anything these days. Moreover, advertising almost always encompasses a sense of individualism (as opposed to collectivism), usually in terms of self-improvement and self-help, which seem to be the primary, self-centered goals of humans nowadays. For example, consider the infamous weight loss supplement advertisements that guarantee that you can lose a thousand pounds in a matter of hours by simply taking a pill, all while relaxing in your leather armchair with the television remote in one hand and a coke in the other - armchair economics at its best.
Consider the reader's perception of the product in the aforementioned type of advertisement. I can see it now. The marketer would probably throw the ad for the weight loss supplement on a page in a popular magazine targeted toward women, like Cosmopolitan or People, for example. They would slap a picture of a beautiful young woman wearing a bikini with a body that probably took years to sculpt in the top left corner, and perhaps even put some before-and-after-type shots to emphasize the product's seeming effect.
The marketing team would also probably opt to put some outrageous statistical claims in bold-face print with phrases like "99.9% effective!" along with a few seemingly falsified endorsements from celebrities, doctors, and/or fitness experts. Sound familiar? I'm sure it does. That is because these types of ads work. They convert into sales. The owner of a marketing firm knows this; an expert economist knows this also, but he or she knows it is true because of the fact that humans are rational and self-interested.
Now let's look specifically at the tactics the marketer used here to grab the attention (and probably the money) of the reader. First, the ad appealed to the senses and drew on the emotions of a perhaps overweight female audience desperately wanting to be thinner. The second tactic is a logical approach through which the advertiser puts flashy, captivating, too-good-to-be-true statistics on the page to almost guarantee its effectiveness. Humans, being rational in nature, love when things make sense logically. Lastly, they usually pay famous people or experts to say something good about the product in question to emphasize its popularity and the fact that the reader is missing out on a great product.
You can find several, if not all of these types of tactics in nearly every type of advertisement for any type of product or service. It has become the norm for marketers to both create and then subsequently exploit these fundamental senses of self-centeredness, self-betterment, laziness, and individualism, among other things, in the target audience.
What about the "narcissism epidemic," though? Well, I would be slightly reluctant to casually throw around the term narcissism in describing the present-day population in that I do not exactly believe that we consciously and blatantly disregard the feelings of others; perhaps that is merely subconscious byproduct of the ad-induced self-interest. Either way, hopefully now Kelley's opinion rings a bit truer than it originally did.
Sometimes the advertiser's approach is direct and straightforward in that you know exactly why and how they are attempting to persuade you, and you are able to actively approve or disapprove of a specific advertisement or product. Other times, however, the effect is subliminal, and we do not consciously realize that our viewpoints, opinions, and essentially our brains, are being warped. Advertisers recognize and make use of this subliminal capturing of the target audience. It does not matter whether the ad is in a commercial, magazine, poster, newspaper, or whatever else; they all use the same approaches to achieve the same effect - sales. In that sense, I would like to propose a seemingly abstract concept based on a somewhat replicative structure.
I believe that advertising creates selfishness because the manufacturers doing the advertising are selfish. What I mean to say is manufacturers and entrepreneurs are merely rational, self-interested humans in a capitalist society surrounded by consumerism. In a free market economy, self-interest and its consequent selfishness and individualism are what create the general welfare of the individuals in society. The common man is able to buy microwaves, cell phones, and computers because of the original inventor's profit-driven self-interest, and this concept will always be true of a society with a free market economy. Politicians are quick to cite profiting as some sort of crime or negative act, when in fact it is beneficial and absolutely necessary for the welfare of the individuals of society.
On the other hand, if the inventor's original intention was helping others and allowing others to "profit," then perhaps the subsequent advertisements of his or her product or service would focus on collectivism and the genuine desire of the happiness of the target audience. This idealistic collectivism and seeming altruism is very rare, though, if it even exists at all. Although the emotional effects of advertising may seem of concern to only a small group of individuals, it should in fact concern anyone who cares about the future and welfare of our society.
Profit maximization, in relation to capitalism in a free market system, is both our savior, in that it provides us with a means by which consumption and subsequent satisfaction can occur, and our enemy (society's and politicians' viewpoint, NOT mine), creating and inspiring this aforementioned selfishness of society's individuals that everyone views as being a negative attribute. I would absolutely conclude that it is in fact, however, a very positive selfishness. I believe what is born of self-interest is self-interest, and that's what makes the world go 'round. Capitalism is one of my best friends, and I'll stick by it 'til the end.
Tyler Williamson runs a site about basic principles of economics that are applicable to everyday life and realistic situations. His site is called Armchair Economics.
Article Source: http://EzineArticles.com/?expert=Tyler_Williamson
http://EzineArticles.com/?Armchair-Economics---Capitalism,-Consumerism,-and-Narcissism&id=4032225
Building a Better Economy – Current US and Global Economic Crisis
By Rene Fonocho
Even an ideal economic model can not avoid a recession. WHY can an ideal economic model not avoid a recession? This is the question this article will try to articulate.
In a perfect economic model we assume every nation has attained a steady state meaning the economic growth rate is zero. Everything available in one nation is readily available in another nation at the same price. All industries have attained a growth rate of zero and production equals consumption. There is no inflation rate. The unemployment rate is zero, though we would typically presume that it is at a minimum and equal in every industry and country. Tourism is everywhere the same. The birth rate equals the death rate and the growth in skill labor equals the death in skilled labor.
To put is more solidly, everything everywhere is the same and at steady state. With no technological improvement in any sector, it is unlikely that any industry will have a positive growth. Due to the limitation in technological innovation, no matter how good economic decisions are, there is going to be that ideal limit that we can not jump over.
With an ideal economic model, every industry grows on the backbone of another competing industry and any country only grows not necessarily to the detriment of another country, but its gains are made significantly possible by taking advantage of the lower improvement in development of other countries. The good news is that irrespective of where growth occurs, there is going to be a raise in overall standard of living. The truth is you want to be the first industry or country to have the technological discovery and experience the first growth.
A positive growth in one industry will be accompanied by a negative growth in a substitute industry and likewise for countries. When an industry develops a better technology, the industry's cost of production decreases. The industry is now capable of selling at a much lower price than its substitute or competing industry. The competing industry faced with higher costs and lower demand is forced to lay off workers. Since technology does not increase so quickly, the substitute industry with the right decisions can quickly invest in research and come up with an equivalent technology thus decreasing its costs. It can now employ more people to meet its demand.
What happens to the rival industry now that this industry in now capable of producing at the same production costs? As a result of its initial great increase in demand, it had increased labor to meet demand. Now, it faces a higher production cost and is forced to cut production rate and labor. If labor was significantly higher initially, there will be an increase in overall unemployment as many skilled people having learnt that discipline are forced out of work and it is certain these laid off workers will not be all absorbed by the growing rival. As it takes time to learn a new trade to get employed, this unemployment is bound to last for a while. This is similarly applied to countries doing international trade.
More succinctly, a recession develops when the rate of lay offs is greater than the absorption of skilled workers in a single country. Poor economic decisions like easily controlled excesses and very inefficient means of production only make the sequence of events worse. Technologically strong countries (with improved skills and services) are bound to go through a recession if other countries comparably improve their technological know how.
The only way to stay constantly out of a recession is to constantly come up with a cutting edge technology that keeps you ahead of other countries or competing industries in other countries. This gives you a bigger and steady international market to sell your goods. Bad news is not far off when that market begins to shrink. Once other countries begin to gain on you in technology, you lose your market size, plunge into job losses and then a recession. This recession is in turn transmitted across the globe as job losses increase.
Job losses in the leading country decrease consumption of both home and foreign goods. Since it takes a while to detect the loss in market size, more goods would have been produced that exceeded the once high demand. This results in losses and hence increases production costs. These foreign countries then cut on supply and equally labor thereby causing unemployment. High unemployment and rising cost could lead to a recession in the country trying to attain the maximum production rate. It is important to note that with strong economic policies, the rival faltering country (yet to attain the newly established maximum) could still continue to grow, but at a decreasing rate because it still faces a bigger market compared to its initial state as it is yet to attain the technological know how of its competitor.
This makes studying market trends, jobs available and perusing every available data important in avoiding a worst case scenario. Data predicting done efficiently greatly limits the losses as people could be quickly advised on the many available growing jobs and the skills they need to quickly learn to assuage the severity of the recession. It is implicit that the inability to quickly adapt and a poor mental attitude aggravate the recession.
The US recession has really not been caused by a credit crisis, not by the housing crisis and certainly not by the declining sales in the auto industry although these played a contributing factor. The recession has been caused by a rapid growth of other countries meeting up with the new technological challenges. To get off this recession the US has no choice, but to invest in technology. Unfortunately, technology itself has its limitations. Credit and housing crises erupt when people do not have money because of unemployment to pay their debts.
Spending more money to defrost frozen credits is not going to give people the money to pay the debts. This certainly mitigates the harshness of the crisis, postpones it, but does not wipe it out. For social reasons, it may make sense to give the auto makers money to keep jobs. Is this economically sound? No. Reason being that, their only way to improve is to have a boost in technology. Will there be a leap in technology? I hope there is otherwise, it is sad to say the tax payer's money has been dropped in an angry ocean and the auto industry is far from being saved as fewer and fewer people have the money to even buy their inefficient and expensive cars.
Oil prices might have had their toll on the US economy causing an initial freeze in some sectors like the food industries or played a contributing factor to the recession. The fact that the recent decline in oil prices does not seem to have made things better and certainly not worse either gives us good reason that oil prices could not have been the main cause for the current US and world economic crises.
It is equally implicit from this why developing countries should be least affected by the global recession. Whether they do well will depend on their economic plans and their execution of them. A recession in developed countries should be good news for developing countries that rely heavily on expatriates. Unfortunately, some of these countries may not have the flexible rules at play to profit from the recession. Poor decisions in the US financial (real estate and subprime loans) and auto industries might have hastened a recession, a recession was nonetheless inevitable because of rising economies like China, India and many more that produce and sell cheap.
The US can only successfully get out of a recession by heavily investing in new energy technology. A breakthrough energy technology will keep the economy booming again. Thereafter the government should focus on stabilizing that, but a sustainable growth is only possible with a continuous improvement in technology relative to other countries. The US could have a chance if fast growing economies falter in handling the global crises. Without a technological breakthrough, better policy decisions will have a cushioning effect to slow down the recession rate and alleviate great losses, but not completely stop it.
THE OBJECTIF
http://www.theobjectif.com
Article Source: http://EzineArticles.com/?expert=Rene_Fonocho
http://EzineArticles.com/?Building-a-Better-Economy---Current-US-and-Global-Economic-Crisis&id=4023626
Even an ideal economic model can not avoid a recession. WHY can an ideal economic model not avoid a recession? This is the question this article will try to articulate.
In a perfect economic model we assume every nation has attained a steady state meaning the economic growth rate is zero. Everything available in one nation is readily available in another nation at the same price. All industries have attained a growth rate of zero and production equals consumption. There is no inflation rate. The unemployment rate is zero, though we would typically presume that it is at a minimum and equal in every industry and country. Tourism is everywhere the same. The birth rate equals the death rate and the growth in skill labor equals the death in skilled labor.
To put is more solidly, everything everywhere is the same and at steady state. With no technological improvement in any sector, it is unlikely that any industry will have a positive growth. Due to the limitation in technological innovation, no matter how good economic decisions are, there is going to be that ideal limit that we can not jump over.
With an ideal economic model, every industry grows on the backbone of another competing industry and any country only grows not necessarily to the detriment of another country, but its gains are made significantly possible by taking advantage of the lower improvement in development of other countries. The good news is that irrespective of where growth occurs, there is going to be a raise in overall standard of living. The truth is you want to be the first industry or country to have the technological discovery and experience the first growth.
A positive growth in one industry will be accompanied by a negative growth in a substitute industry and likewise for countries. When an industry develops a better technology, the industry's cost of production decreases. The industry is now capable of selling at a much lower price than its substitute or competing industry. The competing industry faced with higher costs and lower demand is forced to lay off workers. Since technology does not increase so quickly, the substitute industry with the right decisions can quickly invest in research and come up with an equivalent technology thus decreasing its costs. It can now employ more people to meet its demand.
What happens to the rival industry now that this industry in now capable of producing at the same production costs? As a result of its initial great increase in demand, it had increased labor to meet demand. Now, it faces a higher production cost and is forced to cut production rate and labor. If labor was significantly higher initially, there will be an increase in overall unemployment as many skilled people having learnt that discipline are forced out of work and it is certain these laid off workers will not be all absorbed by the growing rival. As it takes time to learn a new trade to get employed, this unemployment is bound to last for a while. This is similarly applied to countries doing international trade.
More succinctly, a recession develops when the rate of lay offs is greater than the absorption of skilled workers in a single country. Poor economic decisions like easily controlled excesses and very inefficient means of production only make the sequence of events worse. Technologically strong countries (with improved skills and services) are bound to go through a recession if other countries comparably improve their technological know how.
The only way to stay constantly out of a recession is to constantly come up with a cutting edge technology that keeps you ahead of other countries or competing industries in other countries. This gives you a bigger and steady international market to sell your goods. Bad news is not far off when that market begins to shrink. Once other countries begin to gain on you in technology, you lose your market size, plunge into job losses and then a recession. This recession is in turn transmitted across the globe as job losses increase.
Job losses in the leading country decrease consumption of both home and foreign goods. Since it takes a while to detect the loss in market size, more goods would have been produced that exceeded the once high demand. This results in losses and hence increases production costs. These foreign countries then cut on supply and equally labor thereby causing unemployment. High unemployment and rising cost could lead to a recession in the country trying to attain the maximum production rate. It is important to note that with strong economic policies, the rival faltering country (yet to attain the newly established maximum) could still continue to grow, but at a decreasing rate because it still faces a bigger market compared to its initial state as it is yet to attain the technological know how of its competitor.
This makes studying market trends, jobs available and perusing every available data important in avoiding a worst case scenario. Data predicting done efficiently greatly limits the losses as people could be quickly advised on the many available growing jobs and the skills they need to quickly learn to assuage the severity of the recession. It is implicit that the inability to quickly adapt and a poor mental attitude aggravate the recession.
The US recession has really not been caused by a credit crisis, not by the housing crisis and certainly not by the declining sales in the auto industry although these played a contributing factor. The recession has been caused by a rapid growth of other countries meeting up with the new technological challenges. To get off this recession the US has no choice, but to invest in technology. Unfortunately, technology itself has its limitations. Credit and housing crises erupt when people do not have money because of unemployment to pay their debts.
Spending more money to defrost frozen credits is not going to give people the money to pay the debts. This certainly mitigates the harshness of the crisis, postpones it, but does not wipe it out. For social reasons, it may make sense to give the auto makers money to keep jobs. Is this economically sound? No. Reason being that, their only way to improve is to have a boost in technology. Will there be a leap in technology? I hope there is otherwise, it is sad to say the tax payer's money has been dropped in an angry ocean and the auto industry is far from being saved as fewer and fewer people have the money to even buy their inefficient and expensive cars.
Oil prices might have had their toll on the US economy causing an initial freeze in some sectors like the food industries or played a contributing factor to the recession. The fact that the recent decline in oil prices does not seem to have made things better and certainly not worse either gives us good reason that oil prices could not have been the main cause for the current US and world economic crises.
It is equally implicit from this why developing countries should be least affected by the global recession. Whether they do well will depend on their economic plans and their execution of them. A recession in developed countries should be good news for developing countries that rely heavily on expatriates. Unfortunately, some of these countries may not have the flexible rules at play to profit from the recession. Poor decisions in the US financial (real estate and subprime loans) and auto industries might have hastened a recession, a recession was nonetheless inevitable because of rising economies like China, India and many more that produce and sell cheap.
The US can only successfully get out of a recession by heavily investing in new energy technology. A breakthrough energy technology will keep the economy booming again. Thereafter the government should focus on stabilizing that, but a sustainable growth is only possible with a continuous improvement in technology relative to other countries. The US could have a chance if fast growing economies falter in handling the global crises. Without a technological breakthrough, better policy decisions will have a cushioning effect to slow down the recession rate and alleviate great losses, but not completely stop it.
THE OBJECTIF
http://www.theobjectif.com
Article Source: http://EzineArticles.com/?expert=Rene_Fonocho
http://EzineArticles.com/?Building-a-Better-Economy---Current-US-and-Global-Economic-Crisis&id=4023626
Tax Cuts Or More Government Spending to Stimulate the Economy?
By Rene Fonocho
There is really no fixed way to stimulate the economy. The degree of economic stimulation and the size of response during a recession largely depend on the cause of the recession. For any recession, the GDP make-up is the paramount determinant of the most effective stimulating mechanism.
When an economy runs into a recession, it is hard to believe that without any new action, the economy is somehow going to pull itself out. The inability of the economy to pull itself out with inaction indicates that the old ways of running business have to be significantly modified.
Although it is important to free up money so that consumers can purchase goods when a recession strikes, it is more important to channel this money towards the most efficient goods which increase productivity in the long run. Governments have the power both to free up and to channel the flow of money although bureaucratic constraints hinder the speed and the effectiveness of the response. During recessions, struggling private enterprises producing inefficient products are usually more interested in disposing unproductive goods in the market and staying in business. This renders government action all the more relevant.
The government's ability to initiate any kind of economic stimulus greatly declines with a decreasing ratio of government budget to GDP. Having a fixed government budget to GDP ratio enlarges the government if the GDP grows with time. This in turn renders the government so cumbersome that its efficiency wanes with time. This diminishing effectiveness could be mitigated by modeling government institutions like the non-profit private industry while using the rest of the government apparatus to play only a regulatory role. While this helps to boost efficiency, it also strengthens the government's ability to steer the country towards economic progress with less hindrance.
An economy in recession could either be stimulated through increase in government spending or tax cuts. A rise in government spending creates more government sponsored projects, jobs and increases the cash flow for working families. This money is then channeled to other businesses leading to an increase in jobs in the private sector. Increased spending would entail an increase in taxes thereafter in order to minimize the budget deficit.
On the other hand, tax reduction raises the amount of cash available for businesses and consumers. Consumers can buy more goods resulting in an increase in jobs in the private industry and the private industry could in turn embark on producing more goods.
Government spending implies the government directs where the money needs to be spent. In tax reduction, the private industry allocates where the extra cash goes. While the government often focuses on long term opportunities, the private industry's focus is usually not stretched out beyond 5 years considering that the average life span of a US company is 50 years and its infant mortality rate is 10 years.
A reduction in taxes for small businesses and consumers really does little to keep the economy booming in the long run. This reduction would result in a temporal increase in small businesses. Having more small businesses in a recession does not generate more investment, but encourages more consumption. Consumption is bad for economic recovery. US consumption alone is 70 % of the GDP. Stimulating consumption may postpone a depression in the short run but the recession will become more severe when consumption is exhausted with no investment. Consumption stimulation provides a parachute for a slower free fall with little hope to rise.
A tax cut on small businesses is only effective in stretching out and exhausting an already initiated growth. Tax cuts on small businesses do not initiate growth. More often, an economic crisis requires stabilization with an orientation towards the initiation of growth than the expansion of growth. The increase in small businesses during a recession only results in the production of similarly existing goods with little or no changes in efficiency. This ends up being an illusory economic growth.
In addition, tax cuts create many disunited multidirectional economic fights by many different businesses. The ineffectiveness of multidirectional fights could not be overemphasized because economic resources get scattered everywhere thereby diminishing their strength to meaningfully reshape any economic meltdown.
A better strategy for tax cuts would be not to have an across the board tax cuts, but a reduction in taxes for industries that are expected to become the new production frontiers for the next decade. That would be money well spent. An alternation of more targeted spending and focused tax cuts is a sure means to keep the economy very efficient.
It is easier to see the ineffectiveness of tax cuts through the provision of lower taxes to businesses that are failing. A failing business requires a lot of restructuring and tax cuts give it an incentive not to restructure. With the tax cut, prices will be brought down and the consumption of the same poor goods is encouraged. When the well of tax cuts is exhausted, more tax cuts would be required to keep the industry afloat. This only leads to a deflationary spiral.
As personal finances dwindle, other programs such as food stamps, tax rebates and unemployment benefits help ensure that many existing jobs are not lost which will worsen the downward spiral. Such programs therefore only act as stabilizing mechanisms.
The effectiveness of the government to transform policies into actions is the single most significant factor in restoring economic prosperity. Should the government become very inefficient, then there is no doubt that tax reduction would play a more effective role in stimulating an economy during a recession. The government is needed more in a severe recession to make swift, smart and steady corrective measures. Government investment lays a formidable groundwork for future growth.
Every fiscal policy has a threshold below which its effect is insignificant. An invaluable fiscal policy would be simultaneous increase in spending and tax cuts, but no country has the luxury of excess cash to effect such a concurrency beyond both thresholds. This leaves government spending as the more efficacious policy. The challenge is to know these thresholds in order to institute the right measures. With the government budget constituting a fixed and appropriate percentage of the GDP, the government is sure to have the machinery to launch congruous tax cuts for the short run economic stimulation and increased government spending for long run stimulation without the burden of excessive deficits.
THE OBJECTIF
http://www.theobjectif.com
Article Source: http://EzineArticles.com/?expert=Rene_Fonocho
http://EzineArticles.com/?Tax-Cuts-Or-More-Government-Spending-to-Stimulate-the-Economy?&id=4023383
There is really no fixed way to stimulate the economy. The degree of economic stimulation and the size of response during a recession largely depend on the cause of the recession. For any recession, the GDP make-up is the paramount determinant of the most effective stimulating mechanism.
When an economy runs into a recession, it is hard to believe that without any new action, the economy is somehow going to pull itself out. The inability of the economy to pull itself out with inaction indicates that the old ways of running business have to be significantly modified.
Although it is important to free up money so that consumers can purchase goods when a recession strikes, it is more important to channel this money towards the most efficient goods which increase productivity in the long run. Governments have the power both to free up and to channel the flow of money although bureaucratic constraints hinder the speed and the effectiveness of the response. During recessions, struggling private enterprises producing inefficient products are usually more interested in disposing unproductive goods in the market and staying in business. This renders government action all the more relevant.
The government's ability to initiate any kind of economic stimulus greatly declines with a decreasing ratio of government budget to GDP. Having a fixed government budget to GDP ratio enlarges the government if the GDP grows with time. This in turn renders the government so cumbersome that its efficiency wanes with time. This diminishing effectiveness could be mitigated by modeling government institutions like the non-profit private industry while using the rest of the government apparatus to play only a regulatory role. While this helps to boost efficiency, it also strengthens the government's ability to steer the country towards economic progress with less hindrance.
An economy in recession could either be stimulated through increase in government spending or tax cuts. A rise in government spending creates more government sponsored projects, jobs and increases the cash flow for working families. This money is then channeled to other businesses leading to an increase in jobs in the private sector. Increased spending would entail an increase in taxes thereafter in order to minimize the budget deficit.
On the other hand, tax reduction raises the amount of cash available for businesses and consumers. Consumers can buy more goods resulting in an increase in jobs in the private industry and the private industry could in turn embark on producing more goods.
Government spending implies the government directs where the money needs to be spent. In tax reduction, the private industry allocates where the extra cash goes. While the government often focuses on long term opportunities, the private industry's focus is usually not stretched out beyond 5 years considering that the average life span of a US company is 50 years and its infant mortality rate is 10 years.
A reduction in taxes for small businesses and consumers really does little to keep the economy booming in the long run. This reduction would result in a temporal increase in small businesses. Having more small businesses in a recession does not generate more investment, but encourages more consumption. Consumption is bad for economic recovery. US consumption alone is 70 % of the GDP. Stimulating consumption may postpone a depression in the short run but the recession will become more severe when consumption is exhausted with no investment. Consumption stimulation provides a parachute for a slower free fall with little hope to rise.
A tax cut on small businesses is only effective in stretching out and exhausting an already initiated growth. Tax cuts on small businesses do not initiate growth. More often, an economic crisis requires stabilization with an orientation towards the initiation of growth than the expansion of growth. The increase in small businesses during a recession only results in the production of similarly existing goods with little or no changes in efficiency. This ends up being an illusory economic growth.
In addition, tax cuts create many disunited multidirectional economic fights by many different businesses. The ineffectiveness of multidirectional fights could not be overemphasized because economic resources get scattered everywhere thereby diminishing their strength to meaningfully reshape any economic meltdown.
A better strategy for tax cuts would be not to have an across the board tax cuts, but a reduction in taxes for industries that are expected to become the new production frontiers for the next decade. That would be money well spent. An alternation of more targeted spending and focused tax cuts is a sure means to keep the economy very efficient.
It is easier to see the ineffectiveness of tax cuts through the provision of lower taxes to businesses that are failing. A failing business requires a lot of restructuring and tax cuts give it an incentive not to restructure. With the tax cut, prices will be brought down and the consumption of the same poor goods is encouraged. When the well of tax cuts is exhausted, more tax cuts would be required to keep the industry afloat. This only leads to a deflationary spiral.
As personal finances dwindle, other programs such as food stamps, tax rebates and unemployment benefits help ensure that many existing jobs are not lost which will worsen the downward spiral. Such programs therefore only act as stabilizing mechanisms.
The effectiveness of the government to transform policies into actions is the single most significant factor in restoring economic prosperity. Should the government become very inefficient, then there is no doubt that tax reduction would play a more effective role in stimulating an economy during a recession. The government is needed more in a severe recession to make swift, smart and steady corrective measures. Government investment lays a formidable groundwork for future growth.
Every fiscal policy has a threshold below which its effect is insignificant. An invaluable fiscal policy would be simultaneous increase in spending and tax cuts, but no country has the luxury of excess cash to effect such a concurrency beyond both thresholds. This leaves government spending as the more efficacious policy. The challenge is to know these thresholds in order to institute the right measures. With the government budget constituting a fixed and appropriate percentage of the GDP, the government is sure to have the machinery to launch congruous tax cuts for the short run economic stimulation and increased government spending for long run stimulation without the burden of excessive deficits.
THE OBJECTIF
http://www.theobjectif.com
Article Source: http://EzineArticles.com/?expert=Rene_Fonocho
http://EzineArticles.com/?Tax-Cuts-Or-More-Government-Spending-to-Stimulate-the-Economy?&id=4023383
LA City Council Puts Banks on Notice – Help Los Angeles Home Mortgage Holders and Businesses Or Else
By Rick Persley
LA City Council passed a directive that requires banks that want access to the city's $30 billion in savings and pension funds, to help residents who need a Los Angeles home mortgage, a loan modification or funds to invest in a small business. With this new approach "local reinvestment" is now the order of the day.
The city of LA will track what types of loans the banks that have access to city funds make available. They will determine if the banks make loans within city limits, which banks modify mortgages and how many local business loans are funded. They will also be looking at how many new bank branches open and where, especially in poorer neighborhoods.
The goal is to get more money flowing directly into the city, where the unemployment rate is currently at 13.7 percent, which is significantly higher than the national rate of 9.7 percent.
Everyone benefits if more people can stay in their homes, more jobs are created and businesses can thrive.
If you overlay what this new directive will do with what the stimulus package and Making Home Affordable Program (HAMP) have done, I believe that LA's City Council may have put together the right mix to put LA on track for a faster recovery.
For many Angelenos, being able to keep or buy a home is of primary importance. In my opinion, Los Angeles' new directive will help keep Los Angeles home mortgage rates on the low end of the spectrum for an extended period of time. This should also enable more homeowners and potential buyers to take advantage of the anticipated expansion of the banks reinvestment efforts.
Rick Persley is a California Mortgage Broker. He focuses on the Southern California Market, more specifically, Los Angeles County. Visit Los Angeles-Home Mortgage to learn more.
Article Source: http://EzineArticles.com/?expert=Rick_Persley
http://EzineArticles.com/?LA-City-Council-Puts-Banks-on-Notice---Help-Los-Angeles-Home-Mortgage-Holders-and-Businesses-Or-Else&id=3934126
LA City Council passed a directive that requires banks that want access to the city's $30 billion in savings and pension funds, to help residents who need a Los Angeles home mortgage, a loan modification or funds to invest in a small business. With this new approach "local reinvestment" is now the order of the day.
The city of LA will track what types of loans the banks that have access to city funds make available. They will determine if the banks make loans within city limits, which banks modify mortgages and how many local business loans are funded. They will also be looking at how many new bank branches open and where, especially in poorer neighborhoods.
The goal is to get more money flowing directly into the city, where the unemployment rate is currently at 13.7 percent, which is significantly higher than the national rate of 9.7 percent.
Everyone benefits if more people can stay in their homes, more jobs are created and businesses can thrive.
If you overlay what this new directive will do with what the stimulus package and Making Home Affordable Program (HAMP) have done, I believe that LA's City Council may have put together the right mix to put LA on track for a faster recovery.
For many Angelenos, being able to keep or buy a home is of primary importance. In my opinion, Los Angeles' new directive will help keep Los Angeles home mortgage rates on the low end of the spectrum for an extended period of time. This should also enable more homeowners and potential buyers to take advantage of the anticipated expansion of the banks reinvestment efforts.
Rick Persley is a California Mortgage Broker. He focuses on the Southern California Market, more specifically, Los Angeles County. Visit Los Angeles-Home Mortgage to learn more.
Article Source: http://EzineArticles.com/?expert=Rick_Persley
http://EzineArticles.com/?LA-City-Council-Puts-Banks-on-Notice---Help-Los-Angeles-Home-Mortgage-Holders-and-Businesses-Or-Else&id=3934126
State Financial Crises and Why America Should Take Heed
By Justin Aquino
California's problems continue to fester. And America as a whole better be taking notes. Being the largest economy in the US, as California goes, so goes the country - in more ways than one. And the fundamental causes of the California crisis, although more exaggerated there, are not uncommon across the rest of the nation. For all these reasons, the US as a whole must pay attention to what the not-so-golden state is going through.
We know the causes of the financial debacle in California: the shortsighted penchant for extensive and un-financed public spending, the triumph of ideology over good governmental management, and the pernicious influence of special interests and the inevitable corruption that comes with them.
In addition to the Golden State, these are all too common in the American political system, at the state level (some more than others) and at the national level. Of course, complimenting the spendthriftiness is a seemingly endless thirst on the part of the people (we do live in a democracy, after all) for higher spending and lower taxes. In few places is this popular tendency typified so well as in California itself.
Thus we see the financial crisis in California, which on the surface is straightforward enough (outlays greater than receipts), and theoretically easy enough to solve (cut spending), in actuality has roots reaching deep into the structure of a political system and the character of a people. A temporary fix might be cobbled together in Sacramento. The powerful public sector unions might be slapped around. But unless the deeper structural, political and cultural issues are confronted, the same problems will arise again. And, ultimately, the same goes for the country.
http://www.100treatises.com
Article Source: http://EzineArticles.com/?expert=Justin_Aquino
http://EzineArticles.com/?State-Financial-Crises-and-Why-America-Should-Take-Heed&id=4004887
California's problems continue to fester. And America as a whole better be taking notes. Being the largest economy in the US, as California goes, so goes the country - in more ways than one. And the fundamental causes of the California crisis, although more exaggerated there, are not uncommon across the rest of the nation. For all these reasons, the US as a whole must pay attention to what the not-so-golden state is going through.
We know the causes of the financial debacle in California: the shortsighted penchant for extensive and un-financed public spending, the triumph of ideology over good governmental management, and the pernicious influence of special interests and the inevitable corruption that comes with them.
In addition to the Golden State, these are all too common in the American political system, at the state level (some more than others) and at the national level. Of course, complimenting the spendthriftiness is a seemingly endless thirst on the part of the people (we do live in a democracy, after all) for higher spending and lower taxes. In few places is this popular tendency typified so well as in California itself.
Thus we see the financial crisis in California, which on the surface is straightforward enough (outlays greater than receipts), and theoretically easy enough to solve (cut spending), in actuality has roots reaching deep into the structure of a political system and the character of a people. A temporary fix might be cobbled together in Sacramento. The powerful public sector unions might be slapped around. But unless the deeper structural, political and cultural issues are confronted, the same problems will arise again. And, ultimately, the same goes for the country.
http://www.100treatises.com
Article Source: http://EzineArticles.com/?expert=Justin_Aquino
http://EzineArticles.com/?State-Financial-Crises-and-Why-America-Should-Take-Heed&id=4004887
