In the out-sourcing of labor, it is really to be wished that up and coming countries start getting decent jobs. But there are the transnational corporations, countries, and the global economy. When the corporations out-source labor they are getting very cheap labor, undermining the standard of living of the labor force in more developed countries. (I’ll leave out environmental regulations for now.) It should not be a zero sum game. Why should the labor of one country have to suffer for the sake of out-sourcing jobs? Corporations are of course accruing more profit by this practice. They do not have the real benefit of the labor in those countries at heart or in mind.
I forgot the exact figures that Jeffrey Immelt, the chair and CEO of General Electric, told Charlie Rose on TV (On Thursday, June 25th, 2009), but it was something like the financial industry, that is, Wall Street had grown to 47% of our economy while the manufacturing sector had shrunk to 11%. CEO’s should realize that if they destroy the middle class in this country, they also destroy one of the most lucrative markets in the world, thus hurting their own profits. He suggested that the CEO’s of our country try to balance these figures more and bring our industrial base to 20 or 25% of the economy as a goal.
All of this initiative, if it was not blown away in the wind, should however, think in terms of the global market. Rather than shrink the financial industry, workers should be encouraged to buy into stock and become beneficiaries or take the losses as well of the global industrial base. of course, blatant “bank robberies” by that I mean the way banks are short-selling on the country of Greece right now after knowing and hiding its debt and now standing to reap billions if Greece defaults, need to be stopped and prevented by the governments of countries.
Financial corporations that make their money in the stock market also have shares that can be purchased, of course, but the little investor, really investing for the sake of industrial growth and more productivity, versus the big financial powers that can game the system, need to be protected. The mutual funds help them somewhat, but one gets the impression that the hedge funds and other fancy financial firms leave others with the short end of the stick.
But labor ought to be encouraged to become part of the stock market and partially have ownership of the corporations. CEO’s and management needs to stop taking a lion share of the profits out of the pockets of individual shareholders. Now these have also become middle class and the holders are not merely the great pensions, institution, and the rich.
When jobs are outsourced, labor there ought to receive access to shares in the stock market as much as the middle class and labor here. When labor here is helped by stock market income they too will become middle class. But real investment would not be so much of a gamble if so much irrational speculation and gaming the system was not going on.
When productivity grew in the global market place and and when investment for productivity in the financial industry became reality for the global labor force, the industrial base could grow for many countries and the labor could also enjoy the profits. In consort with corporations countries have to figure out how to guide this growth and not allow industries to do the race to the bottom in terms of environmental regulations and wages. D’Angel Rugina argued that if the irrational speculation, that is, the speculation were taken out of the stock market, then the real investment in productivity would produce full employment. Applying that to the global market place is not utopic for our computer enhanced consciousness.
The propagandists are out again claiming that the economy grew in Q4 last year.
It did not grow. One has to keep in mind that GDP is a measure of spending. With the trillions that have been borrowed and spent by the Obama administration it is not surprising that would show up in the GDP.
The reality is that the country continues to lose jobs, there is no manufacturing base, the US consistently runs massive trade deficits (we buy more than we sell) and Obama has been increasing spending deficits and the debt more than any other in the history of the world.
How is it possible that the economy could grow? Saying that is like saying that someone who is in debt should go out and max-out their remaining lines of credt, get some more cards and max those out, take out a second mortgage and spend it all on a vacation. That way when their statements come they can look and say, wow, look at how much my econoomic activity grew, I must be doing great!
That may seem ridiculously silly but it is in fact exactly what has been going on. The time is not long before all of that stops because nobody is willing to give that person any more money and that holds for countries as well. The Chinese just dumped almost $40B in US treasuries, they are not buying more, they have plans to buy nearly 200 metric tons of gold from the IMF and they have already chastised Obama and Geithner for their inept economic policies. Chinese students actually laughed out loud at Geither during his presentation. And the rest of the world is talking about moving away from the US$ as the reserve currency.
This economy is a sham and the rest of the world is waking up to that and when they do this country will be left in utter shambles. It will look a lot like Chavez’s Venezuela, Castro’s Cuba, the USSR or any of the other socialist states that have failed so miserably.
The government is doing everything in its power to perpetuate the failed policies of the past and preserve the economic slavery that it has been imposing upon the Americans. It does not work, it never has worked and it never will work. Hopefully Americans will wake up to that and change things before the rest of the world does.
Greece has symptoms.So some buy some bond insurance.So the cost of bonds go up.So it costs more for Greece to sell bonds…..so Greece has more symptoms ..until the bonds fail to sell and the insurance makes money.
Self -fullfilling…or just an accelerator to the inevitable ?
Probably the latter.Greece could’nt balance it books in the good years..it won’t now in the hard years to come. A default is coming….
The Germans will have to lose some fingers before they act….so they will act late in the day and that will cost them.Thats politics…..just not possible for the Germans to act early.
I wonder what the political fallouy cost will be…..German State control over EU finances…a German Chancellor for Europe ?
Three econometricians were hunting in the woods. After several hours, they finally spotted a deer. In their excitement, two of them fired at the same time. The first one hit a tree a hundred feet to the left of the deer. The second one had equally bad aim and hit a tree a hundred feet to the right of the deer. As the animal fled, the third econometrician shouted, “All right, we hit it!”
I know, you can’t stop laughing. Stay tuned for more content.
I was surprised to hear Brit Hume and Newt Ginrich (former Speaker of the US House) (re)define socialism as “government control of private property.” My understanding of socialism is that the state owns as well as controls the means of production. By “owns,” I do not mean holding the majority of shares, for there are no stockholders in socialism. Government control of a give economic transaction is called government regulation; this is not to say that the government owns the economic institutions. Remember socialism is a type of economic, not political, system. Anyway, Ginrich then said that Obama would instill socialism in the US if he could…and that it would be like Western Europe (which by implication is socialist already)…but there are plenty of privately-held companies sourced in the EU. To say that the EU or any of its states own the businesses would be a gross error. But all too often, if someone on television says (or implies) that this is so, it is taken as such by the general public. What concerns me here is that our public political discourse over the airwaves lets such redefinition go unfettered. The graver implications from the real definition can still scare people even as some new definition is cited. That is to say, people who know what socialism really is might fear that the US Government may take ownership of their small businesses, when what is being feared is that government regulations will increase. That is a far different thing than government ownership of the means of production. When such distances are trespassed in the name of political expediency, we all lose.
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
-William Butler Yeats, “The Second Coming”
The time has come to tackle a subject which many pundits, opinion-makers, and ideologues across the political spectrum have been speaking of with increasing vitriol and divisiveness, which is the fracturing of the veil of prosperity and upward mobility which has been the hallmark of the American Dream for generations, forged in the fires of our Founding Revolution gaining independence from Great Britain.
We’re in trouble, folks, and pretending otherwise is foolish and will only postpone the inevitable. The United States has become a massive debtor nation, and an increasingly large percentage of the population in what is the “richest, most powerful nation on earth” are living lives of increasing desperation, at least so far as our traditional American standards and expectations have defined. While politicians dither and in many cases, cynically manipulate the system out of personal interest and beholden to those that control their purse strings, the physical and educational infrastructure of this country crumbles, executives with little concern beyond the next quarter’s bottom line make decisions with implications that impact the lives of millions, our population grows even more anaesthetized and disengaged as it gorges on a diet of 24/7 “info-tainment” and mindless lowest common denominator “reality” fare, and meanwhile, we engage in conflicts which on many levels may be necessary, but with a tiny fraction of the population bearing the actual burden of the fighting.
Like all civilizations before us, we have reached a crossroads and the choices (difficult as they may be) which we make now will define us for eternity. Even if we do nothing, which is what many in positions of power seem compelled or resigned to do, we have made a choice, and the repercussions of our inaction will echo throughout time as we slide into the chasm which has engulfed other once great peoples. If recorded history teaches us one thing, it is that human nature does not change, and throughout the world lie hints that contrary to the widely accepted view that mankind has technologically evolved over time, save for periods of “back-sliding,” we operate under no assurance that this is a constant or that we are somehow immune to the pressures and choices which have destroyed empires and nations that had cohesively endured far longer than our 234 year run thus far.
REVOLUTION OR EVOLUTION? WHICH WILL IT BE?
As I see it, we face very stark choices right now, which will likely become more restricted as time goes on and we slip deeper into the quagmire we’ve created for ourselves. The United States as a whole can seek to evolve, to apply the enormous potential of our creative and business minds to adjust our course, to make certain sacrifices which may be unpleasant in the short-term, but which are far more preferable to what we could face in the mid or long-term if we do not take such action. Or we can continue to allow the fear, hopelessness and steadily building anger which is permeating many sectors of our population to build, until it finds release in revolution, which even in its non-violent expression leads to fractures and rifts in which the rights of dissenters to life, liberty and the pursuit of happiness – as well as the rule of law – may be compromised as passions inflame action and desperation yields to extreme agitation.
Before I get too much farther, I should clearly state for the record that the thought of our present circumstances leading to violence, organized or not, is deeply troubling and not a course that I wish to see inflicted upon this nation. Yet I cannot help but observe that circumstances are staging themselves nicely for the emergence of demagogues on either extreme of the political spectrum, and I do not deceive myself into believing that right-wing or left-wing extremism cannot take hold in the United States. I believe it is the duty of the vast majority of us who occupy positions somewhere in the amorphous and not easily defined “middle,” that understand that we can find solutions if we bravely face and acknowledge reality, to try to prevent a schism which would destroy the very promise and noble ideals that America was founded upon.
OUTLINING THE STAKES – THREATS FACING THE STABILITY OF THESE UNITED STATES
In order to present solutions to any problem, it is first necessary to acknowledge that the problem exists, to understand what the repercussions are if the problem is not addressed, and to seek to find solutions that will eliminate the problem as an ongoing concern or at the very least, minimize the impact that the problem will have on the future.
Unlike many op-ed writers in many “papers of record,” at the very least I feel compelled to try to offer possible solutions to these problems in upcoming postings. Rather than be yet another “doom and gloom” naysayer crying that the sky is falling, I believe it is incumbent to try to motivate others to seek solutions while we still have palatable options, or before we are backed into a corner individually and collectively and the only choices remaining are poor or unthinkable. I can’t promise that my answers are the best ones available, but I hope that they are better than silence or the monumental and borderline criminal obfuscation and collusion with special interests as is evidenced by the majority of our current crop of politicians.
As I see it, there are seven vital issues facing us right now, some of which are interlinked, which must be addressed in a coherent and forward-looking manner:
Unemployment and Underemployment – Why the U6 Number Matters
Crumbling Physical and Technological Infrastructure Heading Towards Obsolescence
Energy Dependence on Foreign Oil
Geo-Politics and Global Security – Why Radical Interpretations of Islam are a Threat
Spiraling Healthcare Costs and Government Entitlements – There is No Free Lunch
Underfunded Pension Liabilities – The Nasty Surprise Awaiting Many Future Retirees
Education and Lifelong Learning – Ignorance is a Choice with Serious Consequences
Each of these issues is of significant scope and pressing need to present formidable challenges on their own; the fact that we are facing these in a confluence of bad timing due to years of inaction, recklessness and lack of political will to deal with these before they escalated to pending or current crisis status is most unfortunate.
WHY FREEDOM IS PREFERABLE TO SLAVERY IN ANY FORM
Many Americans would do well to remember Gerald Ford’s admonition that, “The government big enough to give you everything you want is big enough to take away everything you have.” I do not believe that more government is the answer to the problems facing us – our government is bloated and inefficient as it is, and while government can work in partnership with the private sector to help facilitate solutions, with rare exception has government ever proven to operate more efficiently or productively than profit-motivated private industry. It’s not that Capitalism as a concept is fatally flawed or outdated; however, unbridled and unregulated capitalism does concentrate wealth, and correspondingly, power, in the hands of a few and if we rely on a sense of benevolence or noblesse oblige from some of today’s oligarchs (little better than the 19th Century’s Robber Barons) raised with little sense of a moral compass or civic responsibility greater than themselves, we are really in trouble.
While it may be true that it’s hard in modern society to be completely self-reliant and to one degree or another, as individuals and nations we are all inter-connected, this does not mean that we cannot strive to do better. For all the pessimism and bad news that the 24/7 news cycle seems to feed upon, every day witnesses all too often unheralded acts of kindness, compassion and heroism from ordinary people that are willing to put their money, principles and sometimes even their lives on the line to help others.
Freedom is a scary proposition, because freedom entails risk, but ultimately, we can only trade our freedom for the illusion of security while voluntarily and cowardly slipping on the shackles and fetters that enable us to become little more than serfs to the minority in power at any given time or place in history.
In my next posting I’ll delve deeper into the employment situation in America, taxation and our faltering primary and secondary educational system…
Jonathan S. Ross is the founder of Black Rock Consulting and the blog “Tao of the Zentropist.” In the interest of full disclosure, he is a political independent that deeply admires President Teddy Roosevelt and believes in the principles of limited government by, of, and for the people; increased personal responsibility and accountability to society;, and enlightened regulation of free market economies to safeguard the financial interests and livelihood of the majority. He believes that the Bill of Rights enumerates individual rights and that it’s specious and self-serving to selectively claim that any (e.g. The Second Amendment) are meant collectively only. He feels that people’s personal lives ought to remain personal and that what goes on between consenting adults, so long as no one else is getting hurt, is neither the business of the state nor of anyone else. While he believes in international cooperation and free and fair trade, he also believes that nation-states and their populations have the right to sovereign and secure borders and the right to self-defense, which extends to the individual level as well. And finally, he believes that as flawed as it may be at times, representative democracy is the best means of governance yet devised by Man and those that threaten it are a clear and present danger to peace, freedom and any hope of global stability now or in the future.
To follow up on the post from Saturday, here’s a column by John Lott, which makes the very sensible point that shifting resources from the productive sector of the economy to the government necessarily will cause dislocation in the short run. There also would be inefficiency in the long run, but that’s a separate issue:
…the stimulus created higher unemployment. In fact, my columns in this space predicted that during at the beginning of February 2009 that would be the case. Moving around a trillion dollars from areas where people would have spent it to areas where the government wants to spend it will move a lot of jobs away from those firms that are losing the money to those who are now favored by the government. Since people won’t instantly move from one job to another, there will be a temporary increase in unemployment.
LONDON – World markets rose Monday as concerns that U.S. borrowing costs may be increased later this year diminished ahead of a testimony by Federal Reserve chairman Ben Bernanke.
Worries about the debt crisis afflicting Greece reined in the advance in Europe, especially in light of the big gains seen earlier in Asia.
In Europe, the FTSE 100 index of leading British shares was up 22.09 points, or 0.4 percent, at 5,380.25 while Germany’s DAX rose 14.03 points, or 0.3 percent, to 5,736.08. The CAC-40 in France was 8.94 points, or 0.2 percent, higher at 3,778.48.
Earlier in Asia, stocks were in demand after strong economic growth figures from Thailand and Taiwan.
Jane Foley, research director at Forex.com, said the loss of momentum during the European session was largely to do with nervousness among investors over the euro’s future despite reasssuring comments from the Greek government.
“Looking beyond the immediacy of Greece’s current budget problems, the market is wary about the ability of the eurozone to sustain itself without strengthening fiscal ties,” said Foley.
By early afternoon London time, the euro was down 0.1 percent at $1.3620 — above last week’s nine-month low of $1.3444.
Investors will be particularly interested to see if the Greek government announces a sizable bond issue some time this week as it looks to roll over debt payments due soon.
Elsewhere, the focus in the markets will likely be Bernanke’s testimony to U.S. lawmakers on Wednesday and Thursday.
In particular, investors will be interested to hear what Bernanke says about last week’s decision by the Fed to raise its discount rate by a quarter of a percentage point to 0.75 percent. The discount rate is the rate banks pay for emergency loans from the Fed.
The discount rate rise last Thursday stoked some fears in the markets that the Fed was paving the way for possible increases in its benchmark funds rate later in the year. But the news that inflation remained extremely subdued in January coupled with comments from Fed officials suggest that the benchmark rate may not actually rise this year.
“No sooner had the Fed raised its discount rate by 25 basis points last week before a whole host of Fed officials lined up to reassure investors that the decision was by no means a precursor to a marked tightening in policy,” said Neil Mellor, an analyst at Bank of New York Mellon humidifier.
“Amidst unrelenting talk of tighter policy globally in 2010, the episode is a reminder of just how cautious officials have become — and for good reason,” Mellor added.
Nevertheless, there is a growing optimism that the recovery, at least in the U.S., is on a sure footing and that has helped stock markets eke out further gains over the last couple of weeks — further earnings statements from retailers such as Macy’s Inc., Target Corp., Home Depot Inc. and Gap Inc. will be pored over. The reports should provide clues about the strength of a rebound in consumer spending, which accounts for more than two-thirds of economic activity.
Last week, the Dow Jones industrial average rose for the second straight week, posting its best weekly performance since early November after a string of strong earnings and economic reports.
Wall Street was poised for modest gains later — Dow futures were up 49 points, or 0.5 percent, at 10,427 while the broader Standard & Poor’s 500 futures rose 5.5 points, or 0.5 percent, to 1,111.70.
Earlier in Asia, Japan’s Nikkei 225 stock index jumped 276.89, or 2.7 percent, to 10,400.47 after earlier surging more than 3 percent. Hong Kong’s main index climbed 483.25, or 2.4 percent, to 20,377.27. Only Chinese shares lost ground, with the main Shanghai index retreating 0.5 percent in the first day of trade after weeklong Lunar New Year holidays.
Elsewhere in Asia, South Korea’s market rose 2.1 percent, while Australia’s market closed up 1.8 percent and Taiwan’s market gained 1.6 percent
Benchmark crude for March delivery was up 19 cents at $80 a barrel.
____
AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.
Focus groups can provide insight into the customer decision making process (Bygrave & Zacharakis, 2010). Questions must be carefully formed to ensure worthwhile data is compiled (Bygrave & Zacharakis). The limitations of focus groups and customer interviews include lack of statistical significance due to the nature of the information collected (Bygrave & Zacharakis). However, customer groups can provide great feedback of a product before formal launching. Many technology based programs run a beta program where they receive input and potential errors from willing consumers.
Reference:
Bygrave, W. D., & Zacharakis, A. (2010). The Portable MBA in Entrepreneurship. Hoboken, New Jersey: John Wiley & Sons, Inc.
On February 18th, Fluvanna’s Board of Supervisors spent the better part of an hour discussing possible changes to the county’s adopted vision statement. Currently it reads: “Fluvanna County is the most livable and sustainable community in the United States.” No changes were made since at least half of the supervisors seemed to favor the current one. This was the first of three meetings Wednesday evening.
The major news occurred after the regularly scheduled meeting when the Board held a budget work session. The county staff announced that to keep services at current levels, fund proposed capital projects, and the increasing debt payments, the supervisors would have to raise real estate taxes by about $.20 per $100 of assessed valuation, or forty percent over the present $.50 per $100. To download the current budget book click here (PDF).
This scenario also would require the county to absorb certain state cuts as well. At the other extreme, if the county were to revert to its FY 2005 spending levels, it would require about a 35 percent reduction in spending, excluding debt service.
These assumptions do not address the additional cuts proposed by Governor McDonnell prior to the meeting on February 17th. The presentation was an elaboration upon earlier information and provided parameters not seen before.
For the most part, supervisors kept their counsel, except for supervisor Sean Kenney (Columbia) who stated that he opposed a tax increase and intimated that he would seek to reduce the local contribution to the school system by as much as $3 million (or twenty percent of the current $15 million).
In other business, supervisors:
· Adopted a “Financial Sustainability” chapter to the Comprehensive plan;
· Authorized a request for proposal for financial advisory services. The county recently terminated its contract with Davenport and Co.; and,
· Were briefed on economic development strategies by Ms. Liz Povar, director of business development for the Virginia Economic Development Partnership.
The Fluvanna Board of Supervisors will hold a joint work session with the Fluvanna School Board to discuss budget issues on Saturday, February 20th, at 9:00 am in the new Courthouse.
I’ve got a lot of ground to cover since I’ve been so delinquent posting lately. A lot has happened in the last few weeks. The unemployment rate decreased. But it’s like the old “that’s good, not so good” joke. Unemployment decreased. That’s good. Not so good, they modified the number of available jobs to make it look better. That’s bad. Not so bad, housing starts increased. That’s good. Not so good, forfeitures increased also. That’s bad. Not so bad, GDP increased. And on and on we go.
I’m pretty excited because I attracted the attention of my new pal, Monica. That’s good. Not so good, she’s critical. That’s bad. Not so bad, it keeps me on my toes. That’s good. Not so good, I may not be up to the task. That’s bad. Not so bad, I have reinforcements. That’s good. Not so good, they can be obtuse or sarcastic. That’s bad. Not so bad, they amuse me. And on and on.
I’ll address some of Monica’s objections another time. What I want to focus on now is something I need to clairify so I can use it later — one, overused word: TRUTH.
To me, “truth” is a simple concept. It means that a sentence or a statement accurately reflects reality. So if I say, “The grass is green” and, indeed the grass IS green. Then the statement is “true.” This is pretty simple. But there are a lot of people who find this idea a challenge. They point out that the grass isn’t really green but different shades of green and even brown. So they want to say that nothing is absolutely true, except, of course, this sentence. Others point out that where I may see green others see yellow. So what’s true for me isn’t true for you.
All of those critics of TRUTH are very, very smart, having learned their ideas at Ivy League schools and graduate-level classes. But there are other individuals, those people whose feet are made of clay, such as engineers or business people, who don’t have the luxury of vague, foggy uncertainty. For them a design either meets the requirement or it does not. The marketing plan succeeds as expected or it does not. The medicine either has a positive effect or it does not.
To be sure, finding truth, making statements that accurately reflect reality is difficult. But honest people work at it for years.
There is another school of thought that accepts the concept of ”truth” but believes that reality is subjective and truth is in the eye of the beholder. Of course, this is “true” in certain cases, such as determining what art is beautiful or appealing. But I’ve never understood this line of non-reasoning. If you tell me that reality is subjective and that what is “true” varies from person to person and that perception is reality, are you not telling me something you think is universally “true?” So you must believe in universal truths.
I suspect that if you hold to the notion that reality is subjective, especially if you try to convince me of that, you are just being intellectually lazy. In fact, what you really believe is that truth is so elusive and hard to find that you would rather save yourself the effort by declaring that there is no such thing as truth. Really? Is that true?
Then there are those of you who dismiss all this as just “semantics.” I proclaim you also too lazy to make the effort of figuring out what’s real and what is not.
Here’s Richard Feynman’s take on the subject. He does a little slam of social science but his real point is that “truth” is possible (reality is objective not subjective) but that finding truth is really, really, really difficult:
A very, very key point is that if you do not accept the notion that truth is objective rather than subjective, there is no point in us having a debate. Debate assumes a common reality. If you don’t accept that, what are you trying to prove by engaging in a debate? I think I know and I’ll explain that next time.
Yesterday, the NY Times had an article about US funding for 2 new nuclear plants in Georgia (the state, not the country). I am cautiously optimistic about this project, while at the same time dreading it. I have long been a supporter of nuclear energy, since the science behind radiation is much more well understood than the interactions related to climate change. However, I believe that supporters need to be clear in what nuclear energy is, and is not.
In so much as it is used to replace or prevent construction of coal burning (or probably natural gas as well) power plants, this is a good idea. However, nuclear energy is not emissions free. Concrete is associated with large quantities of CO2 emissions, and uranium mining has its own environmental drawbacks based on how it is performed. More importantly, there is no federal repository for nuclear waste. Instead it is collecting at the individual nuclear power plant sites across the US.
Regarding overall CO2 emissions, I am a fan of nuclear because it can provide low emissions baseload power. That is, they can run essentially 24/7. They are highly reliable as well, and are not intermittent (nor do they have the associated problems with intermittent). Perhaps one day, in a few decades, other alternatives might be cost effective and reliable, such as storage, but until then, we need something that can reduce baseload emissions in a (fairly) clean manner. And, I believe, that nuclear power is the best way forward…. for now.
Today, I attended “Re-thinking poverty” conference at the UN led by Dr. Jomo Kwame Sundaram, United Nations Assistant Secretary-General for Economic Development in the UN Department of Economic and Social Affairs (DESA), and (Honorary) Research Coordinator for the G-24 Intergovernmental Group on International Monetary Affairs and Development (UNU-ONY, 2010). The conference was initiated as a book launch of “Rethinking Poverty: Report of the World Social Situation 2010″ composed by UN Dep. of Social and Economic Affairs.
Dr. Jomo Kwame Sundaram addressed a plethora of issues concerning methodology and implication of current poverty measures. He stated that the definition and methodology of “poverty line” have to be revisited. “Poverty line” itself is a misleading concept because the official (WB) definition of the poverty line is – what it takes to avoid being hungry. Therefore, poverty is synonymous with being hungry. Moreover, “poverty line” does not encompass the amount of social provisioning provided by the government, political and social freedoms, or gender/racial/class inequalities. Money measure of poverty is misleading because it fails to capture decreases in social provisioning available to the population (ex. China, social provisioning decreased, but the number of poor, according to official statistics, did not). Last decade the poorest of poor were found in East Asia, this decade they are to be found in South Asia and Sub-Saharan Africa.
Dr. Jomo Kwame Sundaram criticized conventional “solutions” of poverty problem, such as, (1) good governance, (2) micro-finance, (3) establishment of property rights, (4) bottom-pyramid marketing. His critiques, based on the body of independent data, showed that these measures do not prove effective in reducing poverty per se. But, these measures produce favorable outcomes in the area of gender inequality, family dynamics (micro-finance), and class inequalities. Instead he proposed to focus on macro economic solutions to reduce world poverty. Sustainable development is one of the most important undertakings that should be universally accepted and practiced. Creation of decent jobs is another crucial goal that developing countries should focus on. And, lastly, social provisioning should be on the top of developing world governments’ agendas.
Dr. Jomo Kwame Sundaram briefly spoke about universalism vs. targeting in poverty reduction. He favors universalism because targeting is politically unsustainable, costly, and leads to exclusion of more than 3/4 of otherwise eligible population.
Some of my questions remained unanswered. For instance, what role does development of independent civil society play in reduction of poverty? Should the discourse about poverty be led by the developing nations? Are the female voices represented in the dialogue about poverty reduction?
Report of World’s Social Situation 2010 could be found here.
Michael Totten interviews Christopher Hitchens – part I, part II. Probably a good thing they stopped there, as I would have just kept reading indefinitely.
How to rise fast at work. Rings true.
Interview with Eugene Fama, a ‘Chicago-school’ economist on the bubble. (HT CARPE DIEM.) Excerpt:
I don’t know what a credit bubble means. I don’t even know what a bubble means. These words have become popular. I don’t think they have any meaning.
“Liberalism” is the opposite of liberalism. Something I’ve been saying for years now.
Martin Regnen on “voudoun”, progressivism and signalling.
David Henderson says that Paul Krugman actually agrees with me that forbidding insurance companies from taking pre-existing conditions into account is stupid. Krugman just disagrees with how to get around the stupidity. Henderson says Krugman’s idea won’t work. I agree with Henderson.
M. Simon finds a Nature article seeming to indicate that the CFC ban as an example of successful environmental policy may be problematic because there never really was an ozone “hole”. Analogies to certain contemporary debates are obvious.
Alex Tabarrok on the problems with the term ‘capitalism’:
It is true that capitalism was named by its enemies. Thus, it’s interesting to note that a socialist is someone who believes in socialism, a communist someone who believes in communism but a capitalist is someone with capital. [...] So if we name crony capitalism, capitalism, and if we can’t name capitalism, socialism, then what should capitalism be named?
My answer: ‘freedom’.
curi critiques food stamps.
Dan Simon brings us the last television news report we’ll ever need to watch:
Charles Rowley on the Chrysler bankruptcy and the rule of law.
Fearsome Tycoon on the governing assumption of liberals.
Arnold Kling is worth reading here on models and hunches. His hunch is not to trust models. So is mine.
Via Tyler Cowen, James M. Buchanan says Economists have no clothes. For example,
Economists do not really understand what they are doing….
Via Pastorius, the resurrection, right under everyone’s noses, of a crude anti-Semitic stereotype in the highly-accoladed British period drama An Education. Which I wasn’t gonna see anyway, now I just gotta figure out how to not-see it twice….
Finally, via Chris Byrne (and now a zillion others), if you haven’t seen Rock Sugar yet, you should. Or at least, you will….
Adult Dating with Brown Ugly Romance
Adult Dating to Twenties years(20s) Mature Service
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I’m in international economics this semester with Professor Ming Lo. The class is very interesting and Dr. Lo is a great professor. The topic of child labor came up in class as we were discussing globalization. Most people today agree that child labor is unethical. The question becomes, how do we stop it? One response has been to simply outlaw it. For example, in 1938, President Franklin Roosevelt signed the Fair Labor Standards Act in an attempt to curb child labor and protect children from the horrors of industrialization, which had brought with it brutal, and often fatal, working conditions. This had an effect in domestic markets, but it did not stop similar abuses of children in foreign markets. This is why Senator Harkin (D-IA) introduced the Child Labor Deterrence Act in 1992 and several other years after that. The bill would “prohibit the importation of products that have been produced by child labor, and included civil and criminal penalties for violators.” Well this had an effect. According to Jagdish Bhagwati, the University Professor of economics at Columbia University and author of the 2004 book In Defense of Globalization, garment employers in Bangladesh laid off an estimated 50,000 child workers, fearing passage of the bill. We don’t know what happened to these children, but it is believed that these children moved to the underground economy. That is to say, they found worse jobs in worse conditions. These included, for example, unregistered garment factories; At least in some cases, however, these may have included child prostitution and being sold into the sex trade. Very few people could agree this is a positive result.
So how do we stop child labor if we agree that it ought to be stopped? Clearly, banning imported products made with child labor will likely have the effect of not eliminating child labor, but rather making it more concealed and even more dangerous and exploitative than it was previously. Not doing anything doesn’t seem to be the solution either, evidenced by the fact that child labor still exists and has always existed until actions were undertaken to deal with the problem. Dr. Bhagwati suggests in his book that we label products that are are made by child laborers. In this way, consumers can make a decision as to whether to buy the product or not. Although I agree it is a good idea to label products in this way (it increases consumer information), there are some problem. For one, many consumers still purchase goods even when they are aware the negativity associated with it. People still continued to buy Nike products, for example, even after it was exposed that many of their products were produced in sweatshops and unethical working conditions. Sometimes, the benefit that we receive from purchasing a product outweighs any negative thoughts we have about the ethical standards about the production of the product. That is, even if we agree that the production of what we’re buying was done unethically, we still are inclined to purchase the product. Second, even if demand for products created with child labor does decrease because of increased awareness, the effect won’t be much different than prohibiting the import of these products. Children will be forced into other sectors, including underground markets that help conceal the true abuses to these children. While it may help us feel better, it doesn’t do much in the way of ending the exploitation of children. There does not seem to be any clear and easy solution to this problem, and I certainly don’t have the answer. I do believe, however, that a principal component needs to address the underlying causes that drive parents and their children to pick child labor as their available best option. In other words, we need to tackle the issue of world poverty and the social conditions in developing countries that lead to child labor. Decreasing our demand for these products is a step in the right direction, but clearly not enough to end this blight on human affairs.
Everyone has one, it’s impossible to escape. There’s one in every class. The one I’m thinking about in particular is an outspoken buffoon. It doesn’t matter whether whoever is reading this is conservative or liberal. (Personally, I don’t care about your personal political preferences.) This boy, and for the sake of his security I will rename him Belial, is a very obnoxious conservative. Not that I have anything against conservatives, but he’s just so damn outspoken, that any logical person of the right persuasion would and should be embarrassed.
Anyway, I have two classes with this Belial. One is a US history class, the other is an Economics class. So it’s a perfect time for him to exercise his very warped opinions. It wouldn’t be enough to just state his opinion, no, as my history professor said he, “runs a commentary” most of the time under his breath. Then when it’s actually time for the students to answer a question or give an opinion, he talks over the people the professor actually calls on. (One day the teacher finally made him aware of this.)
Now, in my Economics class, the professor worships him like some odd demigod. The professor, and I really am not lying about this, is an Ayn Rand cultist. On many occasions I considered bringing in a copy of Atlas Shrugged to see what would happen if I just set it down on my desk. I expect objectivism in Economists, but this guy has no idea how the real world works. Anyone who isn’t American is a commie. (This is the same with Belial. I’m sure this is why they get along so nicely.)
I like something, it’s considered logic. I try objectivism (don’t confuse this with the economic objectivism) in the classroom, but I can’t see where this Belial kid is going. Probably because everything he says doesn’t make any damn sense. I’ll give some examples of his sheer stupidity in a moment.
So what do you do with someone so delusional that he can’t possibly snap out of it? Don’t get me wrong, outside of class he’s quite nice. We had a conversation about a book I was reading, and when I’m sick he asks me if I’m okay. Inside the classroom though, I just can’t stand him. So, for a judge of character, he’s actually a very nice guy. And that’s what kills me. I mentioned Belial to one of my close friends, and he knew about him, because he had him in a class to.
Enough about really complaining about him, here’s some things he has done or said.
1. In an American National Government class, he nearly got into a fist fight about gun control. Now, it doesn’t matter if it’s gun control or not, but he felt that since he was in the National Guard, he deserved to have an assault rifle. What is a man going to do with an assault rifle in Western Pennsylvania? (Except kill zombies, which I’m perfectly for.)
2. The US history professor asked, “When someone mentions the 1960s, what do you think about?” normal people said things like hippies, civil rights, etc. You know what he said? “SOCIALIST REVOLUTION.” The professor, being a very knowledgeable man, stared at him puzzled for a moment. Then he shot him down, “The closest we ever got to a socialist revolution was in the 1910s and 20s when we actually put socialist politicians in office.” and that was the end of that.
3. Again in the history class, the doctor asked, “Was America actually a melting pot as some call it?” and he said, “No, it was a chamber pot.” The professor (and everyone else) thought it was rather comical, and he said, “You should go to graduate school and make that your dissertation.” his reply from Belial was, “Not if the teacher is left-wing!” I don’t understand that.
4. Keeping on the topic of immigrants, out of the blue he said, “My ancestors are hard to trace – probably the time of the revolution.” and it was at this point where he used an Irish accent – which was actually a crappy English accent – and said, “Stay here and kill some English? Sounds good to me, eh!” (or something tantamount to that.) Nobody knew where that came from, honestly. The professor stared at him, and then looked away saying, “Okay, then.”
5. He mentioned that anyone of any liberal persuasion was a Communist. (I should wear my Soviet-era ushanka hat to class just to freak him out, or piss him off, whatever comes first, honestly.)
6. My Economics professor has a very odd spectrum to judge countries. It’s a compass. North is Capitalism, South is Socialism, East is Democracy, and West is Communism. Any normal person would realize that the assumption he has is very wrong. It’s “Totalitarianism” and “Libertarianism” but hey. He had France all the way down to the bottom at “Socialism”. Honestly, I wanted to know what he considered the Scandinavian countries, so I said, “What would you consider Norway, Sweden, and Denmark then?” the professor said, “Cold.” (I’ll admit, that was witty.) Belial said, “SCANDINAVIA, DUH.” I almost ripped his head off (verbally) but I didn’t. It was then the professor called Norway a dictatorship. I’m sorry, what?
Anyway, those are some things I’ve noticed he said. He also advocated for a complete anarchy – which confuses me, but hey.
The lesson learned is, “Extremism is stupid on all sides.” If you’re too far right or too far left, you’re a scary person, I’m sure. That’s when people become belligerent, and I don’t want to see that. Violence isn’t really a way to solve your problems. Diplomacy’s where it’s at, bro.
If you’re a fanatic, don’t read this, you’ll get mad. Also, if you’re outspoken, you’ll probably get mad too. I’m not going to fight you, I don’t think I have the energy or time to do that. I don’t want to hear your political opinions, especially if you think the current administration is “socialist” or not. That’s not what this blog entry was about. Okay? Okay. The point was, people take things way too far.
Entitlements: Social Security, is running deficits decades earlier than expected. We’ve been kicking the can down the road. We’re out of road.
USAToday: Social Security’s annual surplus “nearly evaporated” for the first time in a quarter-century last year. The program is poised to be in the red for the next two years; between 2008 and 2009, it saw a revenue decline of $60 billion.
Meanwhile, with the retirement of many in the “Baby Boom” generation imminent, regular annual losses are expected beginning in 2016. Republican Rep. Paul Ryan of Wisconsin, the highest-ranking Republican on the House Budget Committee, says the program’s “moment of truth has arrived.”
IBD: As Bernie Madoff found out, any Ponzi scheme depends on a continuous inflow of new cash and new customers or the ever-expanding pyramid will totter and collapse. Social Security, dependent as it was on new workers paying the expanding benefits of retirees, is about to, much sooner than expected.
As Ed Morrissey over at HotAir.com reminds us, Peter Orszag, now director of the Office of Management and Budget, predicted as director of the Congressional Budget Office in August 2008 that no one needed to worry about Social Security. “CBO projects that outlays will first exceed revenues in 2019 and that the Social Security trust funds will be exhausted in 2049,” we were told.
As the baby boomers have started retiring and the economy has collapsed, that day of reckoning is here. The Social Security Administration’s Office of the Chief Actuary finally got around to posting detailed November numbers, and they aren’t pretty.
The combined OASDI (Old-Age Survivors and Disability Insurance) “Trust” Funds recorded a nearly $6 billion primary deficit for November, the worst monthly performance since records began in 1987. The 12-month OASDI primary surplus was only $9.598 billion, also the worst 12-month performance on record.
Only the fact there will be no cost-of-living increase in 2010 may save OASDI from running a primary deficit this year. But continued economic doldrums coupled with the economy-killing socialization of health care, higher taxes, rising deficits and the still-looming catastrophe known as cap-and-trade may cause our house of Social Security cards to collapse long before sea levels begin to rise.
When you consider just disability income (DI), the picture looks even bleaker. For the 50th straight month, going back to October 2005, the DI Fund ran a yearly deficit, this time a record $21 billion.
At least one part of Orszag’s prophecy is coming true: “Social Security’s revenues each year are greater than its outlays, but as the baby-boom generation (people born between 1946 and 1964) continues to age, growth in the number of Social Security beneficiaries will accelerate, and outlays will grow substantially faster than revenues.”
That trend has accelerated to the point of collapse.
Private, insurance company-run annuity plans are legally required to pay you what was promised, when it was promised, and to maintain assets sufficient to redeem those promises. Social Security is not. Any insurance company CEO that ran a Ponzi scheme like Social Security would soon be incarcerated for fraud.
Opponents of the partial privatization proposed by President George W. Bush cited the variability in the stock market as a looming disaster and probably would say “I told you so” considering the recent market troubles. But at least retirees would still have real money, their money, in real accounts. They wouldn’t be dependent on government IOU’s and the hoped-for contributions of others.
We have a looming disaster on our hands.
Social Security has been called the “third rail” of American politics. Well, this train is running off the rails, and someone better touch it before momma gets thrown from it.
And this from The New York Times: One sound approach would be to link benefit levels to life expectancy, so that as people live longer, future benefits would be modestly reduced while payroll taxes that support Social Security would be modestly increased.
A nice way of saying, less Benefits, more taxes.
I personally have never regarded Social Security as anything other than a Tax.
And when liberals attack me on Social Security for being “socialist” so I’m a hypocrite, I just say back to them: Give me all the money you stole from me and never do it again and I will be happy.
I will succeed or fail on my own merits.
I never get a response to that.
And thus the shouting match continues as the trail derails as to whether it is even derailing to begin with then what to do if it does or how to prevent it if it does, but will it?
:::sigh:::
Meanwhile, The President proposes to increase the money taken from my paycheck.
Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.
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Global Coffee Output May Dip 3.6 Per cent in the 2009-10
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Global coffee output may dip 3.6% : ICO
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Global coffee output may dip 3.6 per cent to 7.41 million tonnes (mt) in the 2009-10 crop year on fall in production in Brazil and Africa, the International Coffee Organisation (ICO) said.
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Adverse climatic conditions in few growing regions may also affect crop quality, it added.
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Last year, world coffee output had stood at 7.69 mt, it said, adding that the estimate for this year is preliminary as data from Colombia and Vietnam is pending.
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“With factors such as a prolonged dry season and high levels of coffee berry borer infestation, there appears to be little possibility of an increase in global production,” ICO said in its latest market report.
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In Other major Commodities Update, there are news of rabi productions falling short of expectations and Uttarakhand government seems not to be increasing the sugar price.
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Rabi output may fail to meet estimates:
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All eyes are now on the estimates for the rabi crop this year.
A good winter crop (rabi) will help augment the foodgrain supply and ease food prices.
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Hopes of a good crop have been fuelled by favourable weather conditions and the greater thrust on increasing the rabi crop.
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The Union agriculture ministry has already indicated that the rabi season, this year, may see an additional 10 million tonne (mt) of output over the past year’s production, implying a growth of 8%.
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This optimism on the rabi crop has prompted the Central Statistical Organisation or CSO — the government’s statistics arm — to estimate a meagre fall of 0.2% in agri output this year despite a 16% fall in the kharif (or summer crop) output due to the deficient monsoon.
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Uttarakhand not to increase sugarcane price:
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The Uttarakhand government seems to be in no mood to increase the price of Rs 215-220 per quintal for sugarcane despite a hefty increase by private sugar mills.
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In the first week of December, the government announced the state advised price (SAP) of Rs 192-197 at a time when farmers were agitating for a price of Rs 250.
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But soon, the private mills began paying heavy bonuses to farmers in the face of acute shortfall in a desperate bid to keep the factories running.
The government too decided to give bonus with a final price of Rs 215-220.
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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
BUDGET ASSIGNMENT
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
BUDGET ASSIGNMENT
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
On February 18th, Fluvanna’s Board of Supervisors spent the better part of an hour discussing possible changes to the county’s adopted vision statement. Currently it reads: “Fluvanna County is the most livable and sustainable community in the United States.” No changes were made since at least half of the supervisors seemed to favor the current one. This was the first of three meetings Wednesday evening.
Today, I attended “Re-thinking poverty” conference at the UN led by Dr. Jomo Kwame Sundaram, United Nations Assistant Secretary-General for Economic Development in the UN Department of Economic and Social Affairs (DESA), and (Honorary) Research Coordinator for the G-24 Intergovernmental Group on International Monetary Affairs and Development (UNU-ONY, 2010). The conference was initiated as a book launch of “Rethinking Poverty: Report of the World Social Situation 2010″ composed by UN Dep. of Social and Economic Affairs.
* FREE SIGNUP * – Dating
