Entries Tagged 'Government' ↓
February 6th, 2015 — Economics and Investing, Government, Investing
Reprinted from Huffington Post
This time around, it’s Greeks who should beware of foreigners bearing gifts…
Ever since the financial crisis of 2008 hit Greece, I’ve wondered who really should pay.
Today, trying to find a reason for my unease with what’s happening to the Greek people, I took a look at the definitions of two forms of risk that investors can incur when buying foreign debt: Systemic Risk and Sovereign Risk.
Systemic risk is a term that came up quite frequently during the global Financial Crisis of 2008. I could never quite figure out what the term meant just by reading about systemic risk as part of a larger context in news stories.
Recently, however, I saw that familiar term used in relation to medical treatments. What I read was that chemotherapy imposes a systemic risk on the body while surgery and radiation treatments for cancer are more targeted risks to the patient.
In regard to investing, Wikipedia says, “In finance, systemic risk is the risk of collapse of an entire financial system or entire market”
We all know, or think we know, what an entire body is, but what is meant by “an entire market”? Continue reading →
October 14th, 2013 — Government, Taxes
House Republicans have said they just want a “little something” from the Democrats in order to sign a clean debt limit bill. They want some kind of spending cuts to help them save face. Well, how about a tax cut – a tax cut that will also be a stimulus helping to restore jobs and raise revenue?
Most of us agree that consumer demand is a major sticking point to growing our economy. Corporations have more than enough money to expand production of goods and services, but there aren’t enough people out there able to buy their products.
In particular, those Americans with the least amount of money now have even less money to spend. Years of steadily declining wages and now, as a result of the financial crisis, loss of interest income, and for some, their homes and jobs, have led the descent into belt-tightening just to pay the bills. This contributes to a sluggish economy on the one hand, and a lessening of tax revenue on the other.
The Republicans’ answer seems to be trim the national budget by taking more away from those on entitlements. The Democrats point out that this will reduce the amount of spending American citizens do.
What if we could increase the spending by workers who collect entitlements? Continue reading →
October 14th, 2013 — Government
Rent-seeking is a technical term few people understand. Put simply, rent-seeking is the effort to gain a privilege from government intended to increase the seekers’ incomes.
You’ll note I used the plurals for the words “seeker” and “income”. That’s because rent-seeking these days is being driven by lobbyists paid to promote the incomes of whole industry sectors or even areas of the world.
It’s no longer individuals or individual corporations seeking privileges from government: it’s groups of big corporations working together through their industry trade associations to use governments for their own self-interest, regardless of the impact or costs to others.
Rent-seeking by whole industries
Continue reading →