"Keep your Fed'ral Gumment' hands off my Fed'ral Entitlement programs!!---Oh, and yea, decrease my taxes too"---Yes, we are that fickle..See the poll results here...

Here are the results of various polls asking people about the Federal Budget, Deficit Spending, Debt, AND their favorite Government programs...The American electorate is VERY schizophrenic!! THIS is part of the problem...

Source:  Bruce Bartlett at The Fiscal Times...

An April 6 NBC News/Wall Street Journal poll found that 61 percent of people favor a balanced budget amendment to the Constitution, down from 71 percent in 1995. Support falls to 27 percent when people are told that this would require a 20 percent cut in entitlement programs.


An April 4 YouGov poll found that an overwhelming majority of people favor large budget cuts. However, majorities also favor increased spending for education and medical research, and a strong plurality favor increased spending on clean energy technology.

An April 1 CNN/Opinion Research poll examined peoples’ knowledge of how the federal government spends its money. It finds that most really have no idea what percentage of the budget goes to various programs.


A March 31 Pew poll asked people which among these programs the federal government spent the most on: Medicare, education, scientific research, or interest on the debt. Only 29 percent of people correctly said Medicare, 7 percent said education, 7 percent said scientific research, and 36 percent said interest.

A March 16 Pew poll found sharply declining support for Republicans on budget issues. It also found strong opposition to cutting Social Security and Medicare, which Republicans have promised to do.

If the Demand for Healthcare increases but the supply of Doctors stays constant, what happens to the cost of Healthcare? Resist the urge to think the right answer---policy-makers do...



Source: Carpe Diem

 Sometimes we forget there is a supply-side function in the healthcare debate. Most of the focus is on the demand-side.  As much as policy-makers would like to suspend/ignore the laws of supply and demand, we must increase the number of doctors supplied in the market-place.  Even with policies that allow medical para-professionals to do some of the routine tasks traditionally performed by doctors, we need to replenish the doctor ranks at a much higher rate if we want to reign in medical costs.  As illustrated in the graph above, the number of new doctors coming online in the last 30 years has been relatively flat.  I have to assume that the demographics of medical professionals reflect societies demographics and there will be a wave of retirements in the coming decade or two. I am not very good at math, but I can see a potential shortage of doctors on the horizon...What do you think?

Who is the gate-keeper in terms of the number of new doctors created each year?

From USA TODAY: ""The marketplace doesn't determine how many doctors the nation has, as it does for engineers, pilots and other professions. The number of doctors is a political decision, heavily influenced by doctors themselves. Congress controls the supply of physicians by how much federal funding it provides for medical residencies — the graduate training required of all doctors.

The United States stopped opening medical schools in the 1980s because of the predicted surplus of doctors. The Association of American Medical Colleges dropped this long-standing view in 2002 with the statement: "It now appears that those predictions may be in error." Last month, it recommended increasing the number of U.S. medical students by 15%. ""

Perfect timing--We are covering Monetary Policy in AP Macro---China Raises it's Reserve Requirement...Why would they do this???

One of the Monetary Policy Tools Central Banks around the world have at their disposal to control the money supply in the banking system is the Reserve Requirement.  Banks are required to withhold a certain percentage of each deposit (the Required Reserve Ratio--"RRR") they receive in the form of Required Reserves held on account with the nation's Central Bank (the US Federal Reserve Bank, in the case of the US). The Central Bank can either increase or decrease the RRR.  This will have an impact on the amount of excess reserves available to be lent out to customers.

China' Central Bank is employing this particular monetary policy tool to address accelerating inflation in their economy.

From BBC: China raises bank reserves for fourth time this year

By insisting banks hold more cash, the central bank hopes to restrict lending, which in turn will reduce spending.

The latest move, raising the required reserve ratio from 20% to a record 20.5%, is expected to lock up about 350bn yuan ($54bn; £33bn) that banks would otherwise be able to lend.

Inflation in China hit 5.4% in March.

Rising food prices have been the main cause, with the cost of food up 11.7% in the year to March. Housing costs have also risen sharply.

The central bank has also raised interest rates four times since October as it tries to curb inflation.

Here is a simple example: If the Required Reserve Ratio is 10% and a bank recieves a $1,000 deposit the bank must withold $100 in an account with the Central Bank. The bank can then loan the remaining $900 (called "Excess Reserves") to customers to buy "stuff".If the Central Bank wants to slow down lending, hence the purchasing of "stuff", then they RAISE the RRR so banks withhold more and have less to lend out in excess reserves.  Assume the Central Bank raised the RRR to 20%.  Now, if a bank receives a $1,000 deposit they must withhold $200 and the maximum it can loan out from this deposit is $800.  The banking system has fewer Excess Reserves to lend out. This tends to INCREASE the interest rate at which money is loaned out.

The Central Bank raises the RRR in times of inflation, or if they anticipate inflation, to put a damper on borrowing for consumer/business purchasing and asset speculation by investors. It is meant to slow down or reverse the Aggregate Demand for goods/services.

This is a key concept on the AP Macroeconomics test...A must know!!!

Scary graphics on Sugar consumption...I just spit out my donut...

I think you could probably double these amounts for me...I am more ambitious in my sugar consumption than the "average person"...This is not a virtue...

Read the whole NYTIMES article below...

Watch this video for an example of why Congress is not capable of creating jobs. I wonder how prevalent this thinking is around the House?

Click on the link to watch a US Congressman on the floor of the House transform into a modern day Luddite...A case of adding up only one side of cost-benefit equation and forgetting there is another side...Extra credit for pointing out the economic fallacies (there are many) in the few minutes of this speech...

Rep. Jesse Jackson Jr. Blames The iPad For Killing Jobs

From Wikipedia: ""The Luddites were a social movement of British textile artisans in the nineteenth century who protested – often by destroying mechanized looms – against the changes produced by the Industrial Revolution, which they felt were leaving them without work and changing their way of life. It took its name from Ned Ludd.""

Just pay your taxes? Curious about the budget categories that money is going towards? Find out HERE

Click HERE to go the White House website and enter the amount of income and payroll taxes you paid and see a breakdown of where that money goes Federal spending.  Pretty eye-opening!

Source: Chartporn

Export of Containers full of US made goods reaches an all time high...I just hope they are not full of paper to be recycled in China...!



Source: Carpe Diem



How much of your "Made in America" vehicle ACTUALLY is Made in America? You will be surprised by these numbers...

How much of your "Made in America" car is actually made in America?  Below is a list of cars and their content of American made/sourced parts in percentage terms. It is interesting to note the domestic and foreign mix of manufacturers.  Toyota, Honda and Acura have vehicles with MORE American made parts than many of the US manufacturers. 

We have to re-think what it means to "Buy American"--could it really mean "Buy Japanese to get Made in America"???...


1. Dodge Avenger 83%

2. Chrysler 200 81%

3. Toyota Camry 80%
Toyota Avalon 80%
Honda Accord 80%

4. Chevrolet Impala 77%

5. Cadillac CTS 76%
Buick Lucerne 76%

6. Chevrolet Malibu 75%
Chevrolet Corvette 75%
Lincoln Town Car 75%
Acura TL 75%

7. Dodge Caliber 73%
Chrysler 300 73%

8. Dodge Charger 70%
Dodge Challenger 70%
Honda Civic 70%

9. Chevrolet Camaro 66%

10. Toyota Matrix 65%
Cadillac STS 65%
Cadillac CTS 65%
Ford Taurus 65%
Ford Mustang 65%

HT: Carpe Diem

Rising food prices hurt the extreme poor around the world (see chart)...There is a solution, but it ain't never gonna happen...

Food prices matter...Look for more political instability in the more vulnerable parts of the world if this trend is not reversed.  Let me beat the dead horse one more time---Corn-based Ethanol causes people to starve to death---If you grow more corn for ethanol, you have less to eat. Farmers grow more corn which means they grow less of the other agricultural commodities on the list.  Beef becomes more expensive because corn-based feed becomes more expensive---die, horse, die, so more PEOPLE can live...

Food prices: World Bank warns millions face poverty

World food prices are 36% above levels of a year ago, driven by problems in the Middle East and North Africa, and remain volatile, the bank said.


That has pushed 44 million people into poverty since last June.

A further 10% rise would push 10m more below the extreme poverty line of $1.25 (76p) a day, the bank said.

And it warned that a 30% cost hike in the price of staples could lead to 34 million more poor.

Who lends the US government the money to deficit spend? The answer may surprise you



Source: Business Insider



The citizens of what country work the most paid and unpaid minutes in a day? Is it not obvious???

The answer is Mexico...by far...


Source: Economix



Need the help of a math guru to check my work on an Elasticity problem...Be gentle. I am willing to learn..:)

I need the help of a math guru. Check my analysis below and tell me if I am right, wrong, or somewhere in the middle. Be nice...math is REALLY not my strong point, but I am willing to learn... :)
 
This graphic in today's NYTimes provides an opportunity of look at the elasticity of demand for gasoline.  It is not a perfect measurement because it is not in terms of quantity demanded for gasoline, but miles driven.  I am going to assume there is an inverse relationship between the price of gas and miles driven.  



Source: NYTimes



Elasticity is determined by taking the percentage change in the quantity divided by the percentage change in price. I am guesstimating, but I would say in 2005 miles driven is approx. 2.9625 (1/4 of .5 trillions miles plus 2.95 trillion miles) and 3.0 Trillion in 2011. That makes the percentage change from 2005 to 2011 +1.27%. 

 

The percentage change in price from 2005 ($2.00) to 2011 ($3.79) is 90% (rounded up slightly). 

 
Using the Elasticity of Demand equation we divide 1.27% by 90%. This yields .014.  A number less than 1 means demand is relatively INELASTIC, which suggests the change in quantity demanded is not very responsive to changes in price.  This is a VERY small number and indicates demand is almost perfectly inelastic (the demand curve is downward sloping but almost vertical)
 
Does this make sense? Thanks!

President Obama and Former BP CEO Tony Hayward appear to be kindred souls...Both just want their lives back...

I dislike it when someone (Presidents, CEO's, actors, etc) who seeks fame and fortune, and are well compensated for it, lament the fact that they cannot remain anonymous or just have a "regular life".  I understand what they are saying  but I believe you forfeit this privilege when you put yourself in the public eye. So, suck it up cupcake---you can't have it both ways (TANSTAAFL)...

"I just miss - I miss being anonymous," he said at the meeting in the White House. "I miss Saturday morning, rolling out of bed, not shaving, getting into my car with my girls, driving to the supermarket, squeezing the fruit, getting my car washed, taking walks. I can't take a walk."---Pres Barack Obama.

I thought I have heard something similar, but I can't quite recall where...Oh, yea, now I remember...

"We're sorry for the massive disruption it's caused their lives. There's no one who wants this over more than I do. I would like my life back."--Tony Hayward, BP Oil Company CEO...

A nice chart showing the increase in the National Debt Ceiling over time...Only LeBron James has a higher vertical leap...

This chart shows the number of times the debt ceiling has been raised since 1980 (it is the stair-stepped line).  Notice the change in the slope of the National Debt line (the smooth one) over time, especially since 2001.  It has become almost vertical.  A picture is worth a 1,000 words--or the word "dollars" 14.2 Trillion times and counting...




Source: NYTIMES


 Full Story below the fold....

The employment picture is looking up, if we take the collective word of corporate CEO's...I hope they are right...

A survey (NYTimes: In a Survey of Bosses, Good News for Job Seekers) of CEO's in the US suggests that a hiring spur may occur in the coming months. This is very good news if it plays out.  The magnitude of the job creation is still a major question:

""All the surveys are aimed at measuring the breadth of employment plans, as opposed to the magnitude of such plans. So a company planning to add a few workers would count just as much as one planning to add thousands.""  

Optimism about the future will drive business expansion and staffing requirments. The convergence of large corporate profits as of late and declining productivity per worker amid increasing demand for goods and services will drive hiring in the last half of the year.  Barring some exogenous event that would derail the recovery, things are looking up.  This is a bright and shiny as I get, students....

Read the entire story here: In a Survey of Bosses, Good News for Job Seekers .

Or here: