30th Birthday Prediction

Brittany Callen

4B

30th Birthday Prediction

     I think that out of the possibilities of A and B, option A would be more likely. Honestly, I don't see our economy getting better. Plus, Us Americans don't really work on the solution until the problem explodes in our faces. If it was thirty years later and our economy was like the one we had today we would be in a lot of trouble. If option A did occur and I was thirty years old: I would most likely be in debt from college, like many other Americans  And the nation would be failing. We would most likely have a bad reputation and people may be leaving the country for another country with a better economy. I imagine the american debt would just get worse and we would be pulled into a huge black hole of national debt. There could also be variables that could happen that would make our economy worse: Like if china pulled out of their bonds. Like I said in the last paragraph option A is hard, but would be the most likely occurring option. Life would be much harder. 

     Either way both options are difficult, option B is proactive for our countrys future, and is also the option I WOULD CHOOSE. Yet I find it is more unlikely to happen than option A. If we had a GREAT leader, who had efficient plans to get out of debt It would be easier, but at this rate of time every single american, man, woman and child,  would have to pay $48,700. That's ridiculous  I find that not every citizen would be willing to give that money, and once (if we did) get out of debt, we would have to be able to STAY out of debt! There is so many variables that go into this option, and so many things that could impact it and that's why I feel like it's the one to be less likely to happen. Us Americans need to learn how to SAVE and not SPEND. 

Question: If China pulled out their bonds, could it cause a war? What would happen?

Economic Research Project- Bernie Madoff (Ponzi Scheme)

Brittany Callen

4B

Bernie Madoff’s Ponzi Scheme

Bernie Madoff can be described in many adjectives: thief, liar, ex-businessman, and father, many adjectives not admirable considering he founded the Ponzi Scheme, the largest financial fraud in the U.S. history. Investor account statements in 2008 showed $65 billion in false paper profits, but SEC estimates the fraud could be between $10-$17 billion dollars. Bernie Madoff chose to commit fraud against millions, as a result: civilians suffered loss of future retirement plans, many investors lost money, and some businesses even had to close.

The ponzi scheme affected many; largely small investors, who were relying on the income to create retirement funds. Other people that were hurt from the scandal were financial institutions, charity foundations, and even celebrities. Many of them are well known; Elie Wiesel, Steven Spielberg, and even the owner of the Mets, Wilpon family. The scheme led a ripple effect through the lives around Bernie; Mark Madoff, Bernies oldest son, committed suicide two years after his father's arrest. R. Thierry Magon de la Villehuchet also committed suicide after losing $1.4 billion in the scandal.

Irving Picard has recovered $10 billion and has created around 1,000 lawsuits to fund money for the people who have been stolen from. According to the PR Newswire, the US Labor Department is funding $220 million dollars to compensate for the money that has been stolen in the scandal. This settlement is still pending approval, yet if it’s authorized many investors and victims will be reimbursed. Although most were hurt from the scandal, some benefited from it. Around half of Madoff’s investors were “net winners” who earned more than their investment. There were lawsuits, called “clawbacks” which returned the money.

Many wonder why Bernie was able to pull off this 20 year long scandal. One reason is the SEC, Securities and Exchange Commission, ignored the 6 complaints that were filled towards Bernie. Even he himself thought multiple times he would be discovered by SEC investigators. The financial analyst and fraud examiner Harry Markopolos realized in 1999 that Bernie was committing a scandal, as it wasn’t possible to have earnings of which Madoff was claiming. Harry presented evidence to SEC in 2000, and 2001, yet again in 2005 and 2007. Harry unfortunately was ignored, and surprisingly Bernies sons, Andrew and Mark, turned in their father. This is when Bernie admitted, it was all “just one big lie.”

Madoff pleaded guilty to the 11 felony courts against him, including money laundering, perjury, and security fraud. During the trial Madoff apologized to the victims hurt by what he did, “I have left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren. This is something I will live in for the rest of my life. I’m sorry.” Madoff's wife, Ruth, had little input but said, “I am breaking my silence now because my reluctance to speak has been interpreted as indifference or lack of sympathy for the victims of my husband Bernie’s crime, which is exactly the opposite of the truth. I am embarrassed and ashamed. Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years.” He will now be facing his consequences and living the rest of his life in prison.

Bernie Madoff made the decision to commit fraud, and with help from others he was able to pull it off. He faces his consequences with his guilt, he destroyed his families life and took from many others. For his crime he hides behind bars, bars that are saving him from the vicious victims he took so much from.

Citations

Belson, Ken, and Richard Sandomir. "Mets' Owners Agree to Deal In Madoff Suit."New York Times 20 Mar. 2012: A1(L). Gale Student Resources In Context. Web. 29 Nov. 2012.

"Bernie Madoff Arrested for Ponzi Scheme, December 11, 2008." Historic U.S. Events. Detroit: Gale, 2011. Gale Student Resources In Context. Web. 29 Nov. 2012.

Nocera, Joe. "Suspense Is Over in Madoff Case." New York Times 26 June 2012: A23(L). Gale Student Resources In Context. Web. 29 Nov. 2012.

"Psychology Of Fraud: Why Good People Do Bad Things." All Things Considered 1 May 2012. Gale Opposing Viewpoints In Context. Web. 30 Nov. 2012.

"US Labor Department recovers nearly $220 million for Madoff victims." PR Newswire13 Nov. 2012. Gale Student Resources In Context. Web. 29 Nov. 2012.

Explaining the Fiscal Cliff

     The Fiscal Cliff is the impact that is predicted to occur when the AMT, Payroll Tax Holiday, Sequester, and Bush Tax Cuts expire, as well as the Budget Control Act of 2011 coming into regulation. It's a metaphor known as the increase of taxes to more than $500 billion, and across the board spending cuts starting January 1st. If we "fall off" the cliff, it will result in tax rises for every tax payer and business. Spending would be cut in the emergency unemployment compensation program, medicare payment, and a whooping budget cut of  65 billion dollars across the board for federal programs over the nine months between January through September.The fiscal cliff is occuring because all of our programs are expiring at one point of time: December 31st.
     The 2011 deal takes effect the same time as changes to the AMT adjustment occur. AMT stands for Alternative Minimum Tax. The AMT is a extra tax people have to pay on normal taxes, when it was first created it was targeting people with very high incomes who could use special tax benefits to pay little to no taxes. The problem with it now however is that the AMT is applying to civilians who don't have a very high income. People don't have to pay AMT taxes if their payment reaches regular income tax. But if the regular tax is below the minimum you have to also pay AMT. One tax that was DEDUCTED was the payroll tax holiday; its was a deduction of 2% of payroll tax. This expires on December 31st as well. It was helping the economy however the government is planning on letting it expire. Many citizens making 500,000 dollars a year were getting 80 dollars a month, This helped families pay for ridiculously expensive gas prices as well as purchasing food.
     This brings us to our last topic: The Sequester. It's a package of automatic spending cuts. The sequester begins in 2013 and ends in 2021. According to the White House Report the total cuts for 2013 will be $109 Billion. If the cuts do occur there could be unemployment and budget cuts from defense and health care. The sequester can be avoided but only if congress passes another budget deal with at least 1.2 trillion in deficit reductions. 
    All of these put together: Bush Era Tax Cuts, Payroll Tax Holiday, The AMT, Sequestration, and The Debt Calling create the Fiscal Cliff.

My Manifesto

Personal Manifesto

   I think that the government should have minimal economic involvement in our economy. I believe that the government should be able to assist in finding/creating jobs, and that they should remain supporting health care and social security as well as education. I only support this because it helps our economy. This means taking taxes, I think taxes are good, BUT I hate that I never know where my taxes are going, I have a solution for this located in the third paragraph. Another opinion of mine is that a decent amount of money should be given to support the emergency services in our country, as well as funds for education. I support the government regulating rules against the safety of our products and the property rights of owners, YET the government creates price ceilings and this can cause black-markets and illegals deals. 

   I think that the goverment should have limited control over our economy. To be truley free the people should have the power of choice, especially economic choice. The goverment controls price cielings and floors, as well as limits on minimum wage. Everything the government puts regulations on causes a series of cause and effect. For example, Rent Control. When soldiers returned home from WW2 there was a increase in families, this caused a shortage in housing. The government tried helping by putting a price ceiling on rent; soldiers were then able to pay for the rent but it caused a decrease in the quality of the apartments, it also lowered the quantity supplied. When the government puts a price ceiling on a good and the price is set below the equilibrium balance level there is a dead loss created. It can also cause suppliers to drop out of the market, as well as a higher demand. OVERALL it causes a shortage in the widget, and influences more use in the black-market. These are the many reasons I don't believe the government should control the price ceilings/floor's in our economy.
    I love the feeling of getting my paycheck; to me it represents handwork, and independence. Yet, my heart sinks a little when I see all the taxes retched out of my paycheck: federal withholding, social security employee, medicare employee, OR withholding. I have no problem giving taxes, MY problem is not knowing where the money thats taken from me goes. I think that the government should give us control over choosing what we would like our tax money to fund for. I also think it would encourage people to see how their tax money was effecting and supporting the economy, for example,  sending report cards, emails, or creating a online website where the information could be accessed. I encourage taxes, I believe they do help our economy. I believe that everyone who makes income should have to give a percentage of that income back. I know that taxes support our national defense and education, but theres also a lot of unknown in where our taxes our going. (at least I don't know, yet this is what the class is for). Overall my current belief is that the government should take our money for taxes, YET they should allow freedom in the choice of what our taxes go to, and we should get notifications of how our taxes helped the society.
   Overall my manifesto is that I believe the government is resourceful and useful, yet economically they shouldn't be able to control price ceilings and floors, I believe they should be able to take taxes yet they should give us a choice of where our money goes to.
 
  

   

#3 Minimum Wage

Minimum Wage

I agree with minimum wage, yet I believe it should be raised. I believe that if we raised minimum wage to $9.50 or $10.00 a hour we could help the market with inflation and provide more money to the people in poverty. The only problem with rising minimum wage is that small businesses could be hurt in the processes. In my opinion the government should raise minimum wage and create small business tax relief to help small businesses work force. I believe that by increasing minimum wage we would help the market. For example, people who live in poverty don't have extra money to purchase items such as extra shirts and shoes. By having them make more a hour they would have more money to spend on items such as clothes. It's a win win situation!

#2 Price Floors

Price Floors

   I disagree as well with price floors. There are many flaws with price floors; One example is consumers don't buy as much of a product because of its higher costs, yet suppliers produce more of the product however because they are selling it for more money. This creates a surplus in supply. In my opinion price floor hurts society more then it helps. Price floors may help out a handfull of farmers and people being payed minimum wage, yet it only helps those people by hurting everyone else! I would only make exceptions for price floors on goods such as alcohol, if it was sold for more money then less people would be able to purchase it. Based on market equilibrium I would oppose the imposition of price floors on any goods or services in our market economy, It creates too much of a market surplus and causes society to loose money. 

#1 Price Ceilings

Opinion on Price Control 

   My opinion is that the government shouldn't be able to put price ceilings on goods and services in our market. There are many reasons I disagree: price ceilings can cause suppliers to drop out of the market causing a reduce in supply, it can also strengthen use of the black market, and many times it discriminates against people.
    Having price ceilings can cause a shortage of goods in multiple ways. It can cause suppliers to drop out of the market because of shortage of profit, yet also sell-out the object because of its price. For example, if Starbucks had a price ceiling on their coffee of 25 cents per cup the coffee would be sold out almost immediately; there would be a shortage in supply.
   Price ceiling can cause discrimination against citizens. For example, if there was a price ceiling on the cost of apartments and there were many people applying the owner of the complex could pick and choose the people he would like to live there.
  I believe that price ceilings on our market economy cause shortage in many goods, causing a unbalanced market equilibrium. There would be a high demand for the goods sold but not enough supply.

Supply!

NOT DONE.

Demand Wrap-Up

Subsitutes- Reflection

Substitutes!

My mother is very frugal;  I admire her because if there is something of a utility that she needs she finds a way to get the item, or she gets a substitute. For example the other day, corn prices rose incredibly so instead she bought pea's because they were on sale. She has taught me many ways of saving money, which is convenient because I have to pay for everything myself. When I go shopping for clothing I try to buy items on sale, however, many times I go home with nothing because everything is overpriced! I have discovered I can substitute buying clothing at mall, and go to thrift stores instead. Jackets are a utility in Oregon, especially in the winter season. Buying at a thrift store provides cheap slightly used clothes for a lot less money!

Another thing that I realized this chapter in Econ was that many of the things I have are elastic. I don't need a coffee everyday or another pair of shoes to add to my collection. Many things I own ARE elastic, and I don't have many things that are inelastic. My mother; however, requires medicine from her doctor. It's a necessity so my family will buy it no matter the costs. It is the same for diabetics who need INsulin to survive. It's INelastic.

QUESTION: Do you think gas and other inelastic companys abuse their control because what they have we need? 

Inelastic Vs. Elastic, Total Revenue Charts

Newspaper Headlines

Newspaper Headlines

1. Complementary: Oprah's seen eating Doritos, Sales Rise!
2. Substitute: Outbreak of E coli in dairy products, people choose Soy milk instead!
3. Elastic Demand: Soda Prices Double! Consumers have cut down on buying!
4. Inelastic Demand: Medicine prices rise, angry patients buy belligerently! (News Article below, PG.1)

Medicine Prices Rise!

      Medicine has rose 35% in the last two weeks! Angry protesters are still buying the medicine because its a inelastic demand, but at the same time they aren't happy about it. Sarah Lanka a angry patient to Kaiser Family Hospital stated, "I hate that medicine prices are rising so high! My son needs antibiotics for the fever he is having yet its taking so much of my paycheck! I worry that I may not be able to pay rent this month." We interviewed the lead doctor on the floor, Dr. Canahan he said with all sorrow, “I feel so bad that prices have rose, but there is nothing we can do about it. I can’t say with the strength that the prices on medicine will not rise more!” There has been a increase in virus’s across the nation because people can’t afford antibiotic medicine to treat the virus they have. Its become a major issue in todays society. Especially if the prices keep increasing! The president only words on the topic, “I know the difficulty we are facing with the rising costs of medicine, insurance is paying for as much as they can and clinics have opened with lower costs of medicine to try to get everyone virus free. We are doing the best we can.”

Demand Schedule

A object example of my Demand Schedule is Kettle Corn!

url:http://www.popcornzone.com/shop/image.php?productid=16503

Blog #3

Blog #3

I've found that I connect to the reading in my hobby's. My Dad in the past two years has been fixing up a old  68' Chevy truck; I help him with putting the parts in or providing a extra hand. This makes a connection to the economy because, there are many fanatics about fixing up old trucks. To fix up old cars in general there needs to be truck parts provided; therefore, there needs to be someone selling them. This goes along with supply and demand . It could also partakes in the economy because there are some parts in the Chevy truck my Dad doesn't know how to fix; so he has to take it to a mechanic who knows how to fix old classic cars. This provides job's for people who have the skill set of fixing up old cars. Another example is if a owner of a classic car needs a paint job they take it to a professional who also makes more money through that. 

By fixing up my Dad's classic truck we are making it worth more money. He's putting money into it by buying parts, yet if he ever decides to sell his truck he will be able to sell it for a lot more than he bought it for. He bought his car in 2010 for 3,000 dollars; if he decides to sell it today he could sell it for around 12,000 dollars. Without supply and demand my Dad wouldn't be able to buy parts for his truck, and there would be a decrease of classic cars in our generation today.

Question: Would the government ever be able to control supply and demand? What would happen if consumers were low on money and couldn't buy the products the markets were selling?

Opportunity Cost- Blog #2

Opportunity Cost

About three years ago my Dad work place was closing down and all the employees were either layed off or given a option to transfer to a different location. At this point in time I lived in Sacramento, California. My family was forced into weighing the options of living in California but having no income and having my Dad struggle to find a new job or, moving to Tualatin, OR and starting a new life. My Dad and Mom felt like they were being called to Oregon and we moved all of our belongings to our new home, my three sisters and I started at new schools and tried to regain new friendships. 

I feel like the opportunity cost for my situation is the possibility of staying in California and predicting what my life would have been. I look back now three years later realizing its actually very good I moved up here. The High School I would have gone to is filled with a lot of drugs and I might have been peer pressured into doing unhealthy things with my life. The best friend I had when I left California ended up in the wrong group of friends and is now in Juvie. My Dad would have been forced to find a new job and possibly even my stay at home Mom. Life would have been to say at the least more stressful. We would have had a scarcity of  money. I might have ended up failing all my classes in California and getting involved in the wrong group of friends where here in Oregon I have a 3.5 GPA and am planning to get a nursing degree. 

Even though at the time moving to Oregon was hard, and finding friends was harder it made me value alot more things of my life. Because of the move I have a stronger relationship with my family; I also have great grades!

Opportunity cost: What my life could have been in California, school, education, friends, ect. because my family chose to take my Dads transfer in Tualatin, OR. 

Question: Is the opportunity cost choosing the best profit between two options; or is it just the alternative choice you didn't choose and what it could have been? 

Scarcity

Source: http://www.miriambuhr.com/wp-content/uploads/2011/07/scarcity-principle-marketers-use-of-time-marketing-psychology.jpg

The most scarcity I have in my life is the essence of time. One of my favorite quotes from a song is "The only thing between us is time." One of my best friends is leaving for college and I'm trying to hang out with her before she leaves; however, I feel like I never have enough time. There is so many things I have to do but I don't have enough time to complete everything!