Investment Terms 2013

Investing 101

Stock



I chose to use a picture of a piece of pie because owning stock is like having a little slice of the company, the more stock you purchase, the bigger percent of the company you own.


Bond

I chose to use a pinky promise because a bond involves borrowing money and then promising to pay it back later on. If you don't pay it back, you risk paying even more or legal issues.


Primary and Secondary Market

I chose to use this picture because it represents companies competing to get more business. In this picture, honey bees bring more honey to impress the queen bee.

Bulls and Bears



I chose this picture because they represent opposites, just like bears and bulls are opposite. Bulls are optimistic about the market while bears are pessimistic.


Selling Short


I chose this picture because it represents selling short, which is when the company benefits from the price of a stock falling. In a pawn shop, usually people sell their belongings and then buy it back for cheaper later.

Franchise


I chose to use these wooden dolls because a franchise is a smaller part of a large corporation, but are still the same.

Underwrite/Underwriter/Going Public


I chose this picture because it represents going public with someones engagement, just like going public in a market economy.

Now that I am 30...

 Now that I am 30, heres where we are economically; we have continued on the same economic path that we have been for the last 10-12 years.  We still have a giant deficit, and the economy is very slow to improve.  Its very hard to pay off student loans because students just don't have the money to do so, and nobody can help with it because no one has the money. Struggling Individuals and families are forced to pay for a college education, yet don't have the money, so they are stuck with the burden off taking out loans and paying these loans off for many years.  Its hard for kids to pay for schooling, so they are having to take out loans, which take years and years to pay off.

Due to the weak economy, it is almost impossible for people to find jobs, especially whom are right out of college.  People are forced to make lifestyle changes like finding a cheaper place to live, sell their cars, and spend less due to the fact that they have very little income.  It is very hard on people because they don't know what to do and they can't do much to improve it by themselves.  The economy has gotten worse, but it has stayed about the same for the past two or three years.  In order to improve our economy and our massive deficit of $21trillion, people are going to have to make much smarter choices financially.  Due to the great amount of debt, businesses are struggling which ends up effecting the general public.

Manifesto 2.0

1. This is the way it ought to be... The role of government ought to be encouraging of small business growth and development. The government often interferes too much with businesses and does not allow them to grow as much as they could, bringing money and economic growth to a community. As this article stated in US News and World Report, "Last year alone, federal agencies issued 3,807 final rules according to data compiled by Wayne Crews of the Competitive Enterprise Institute".  I think, government should stay out of the economy and small business enterprise because they are restricting businesses from reaching their full potential by their time consuming, costly, and endless regulations.

2. Do you support or criticize sources of government money?  I think that large corporations should be paying more taxes, because if they were the revenue to the government would be more balanced. I believe that the government puts too much pressure on individuals to pay high taxes that in the end dont produce economic growth. Therefore, if they made the large corporations pay higher taxes it would release some of the pressure of each individual. Another area where we could tax more is the "sin tax" like tobacco, alcohol, and even tanning. People will pay a lot for the things they like or even develop a need for, so posing a higher sin tax on those types of things could be very beneficial. If the government made the corporations pay less, pose a higher sin tax, and lowered taxes on individuals, I believe it would create higher economic growth. 

3. Do you support or criticize government spending? I believe that government should be spending less on the Department of Defense, because it allows our country to fund wars and spend money on new military technology. It also gives our money to foreign governments to help them with their wars.  Instead, I think the government should focus on putting more money to "close to home" issues like our education system, and health and medicare.  Our schools would greatly benefit from extra money that we could be putting towards hiring new teachers, funding different educational programs and creating an easier learning environment for the next generation.  I don't believe that the government should be focusing and spending as much towards Social Security because I think it is the individuals responsibility to be saving for their own retirement.

4. National Debt in the future? I chose to cut a lot of defense spending and social security. I finished the activity with a $3.7 Trillion Deficit. I also Raised tax reform by $1300 Billion. This will allow the government to pay out less money over a longer period of time to those involved in the program.  Each year this will save the government billions of dollars.  I decided to cut War Spending by $852 billion. I dont believe in spending billions of dollars on wars that I dont agree with, so it was an easy choice for me to cut defense spending. These days, it seems that the government decides to spend money on things that are not always necessary, or that can be dealt with in other ways. I think if we cut defense and social security, that our national debt will decrease at a sufficient rate. 

5. Water slide. I chose a water slide as my image of the future of our national debt because if we cut defense and social security, place a higher sin tax and lower individual taxes by taxing large corporations more; then there will be a gentle "slide" down the national debt. Evening out spending, and government sources of money it will be a fun decent to the lowering of our 16 trillion dollar debt. 

 Flat Tax

PROs:  This tax is good because it takes everyone at the same rate, "middle-class and upper-class incomes would both be taxed at 17%".  Only an individual's wage income will end up being taxed.  All investment income would be completely tax free. The flat tax will create straightforward payments for taxpayers.  It will eliminate double taxation; you are taxed only once, which makes people happy.  The flat tax eliminates global taxation and allows the United States to compete more equally throughout global markets.  The flat tax system does not discriminate based on income level; everyone pays the same percent of income.

CON:  The Flat Tax System tachnically penalizes individuals of "lower income".  This is because a person who is making $6,000 will be taxed the same amount as a person who is making $6,000.  Unfortunately, IRS employees would most likely lose their jobs under a flat tax system because this tax would dismantle the IRS.  A uniform flat tax without deductions for home mortgage interest would raise average taxes on the middle and lower class individuals.  The Flat tax can also be a bad tax for higher income individuals.  "No exemptions would be granted except for the lowest incomes".  


I support a Flat Tax because it would create a stress free tax life. where everyone is taxed the same and you can keep your investments tax free.




Progressive Tax
PROs:  The Progressive Tax will give the government more revenue while also giving middle/lower class individuals more opportunity.  These taxes are income based taxes.  A poor person who is making much less than other will pay much less in taxes than a person who is making a ton of money. " This tax creates a proper distribution of wealth".  Not everybody is paying the same amount in taxes.  Progressive Taxes also help out during recession time.  If a person's income drastically drops, then there taxes will drastically drop.

CON:  The progressive Tax will burden high income earners becasue they are taxed based on there income.  If you make a lot, you are taxed a lot.  If you make a little, you are taxed a little.  "We're running out of rich people to tax", states Alan Reynolds.  Since the amount of rich people is drcreasing, they need to tax the few that are left very highly.  This type of tax is unconstitutional because it doesn't treat everybody fairly.  Everybody is taxed a different amount.

I oppose the Progressive Tax because wealthy individuals will be giving a very large portion of their hard earned money away to the government.




Value-Added Tax
PROs:  With this tax, the Federal Gov. could benefit from consumer spending.  The Value Added Tax would eliminate the income tax system that we currently use.  This is because the VAT in much more efficient and would bring in more revenue.  This tax would tax all purchases including online sales, so this would solve the "lost online sales tax purchase" problem. "VAT must be paid by every company that handles a product during its transformation from raw materials to finished goods".  Every aspect of production is being taxed.  This tax would ultimately provide additional income to reduce America's giant deficit and fund important programs like health care.

CONs:  The Value Added Tax is very hard on the poor.  VAT Tax will pretty much be just another tax Americans will have to pay since it will be nearly impossible to eliminate the IRS and the income tax system in the United States.  "VAT would be more complicated to implement than other tax-reform options, such as national sales tax.  VAT would be very difficult and costly to businesses because they will have to calculate this tax at every step of the production process.  These costs would then be passed on to the consumer and as well as the new VAT Tax.


I oppose a Value Added Tax because it is hard on the poor and is very expensive for businesses to charge.





National Sales Tax:


PROs:  A sales tax is beneficial because the public school system is very dependent on sales tax revenue for their survival.  The schools put this towards vital things like paying new teachers, textbooks, and building new schools for students.  Public safety officers are paid through government funding generated from a sales tax.  The money from a sales tax also goes towards parks.  This money is spent on maintaining the grass and building play structures.  A sales tax will help the US with our deficit and help to improve our hurting economy. The article says, "Many economists believe a consumption based tax would be best from the perspective of promoting economic growth".

CONs:  A National Sales Tax will hurt middle and lower class families.  This is because this would create a regressive tax system where these individuals would have to pay a much higher percentage of their earnings than the wealthy.  "Nearly 80% of Americans in the middle/lower class income levels would pay as much as 51% more in sales tax than they currently pay under the income tax system" says the article.  These people would be paying much more in taxes than they ever paid with an income tax. 

I oppose a National Sales Tax because it hurts lower and middle taxes because it would create a regressive tax system and would have to give up a higher percentage of their earnings. 

Change in the Demand Environment

Complements: This shows that if the price of peanut butter goes up and people keep buying it, the price of bread will also go up. This is because peanut butter and bread are complements of each other. One is bought because of the other. If you have peanut butter, you usually eat it on bread so if you buy peanut butter then you must also buy bread. Because of this, if the price and demand of one goes up, then the price and demand of the other will also go up.

Substitute: This shows the decrease in the brand name cereal. You can substitute the brand name cereal for the store brand cereal. You get the same thing for lesser price therefor making the demand of the brand name product go down. Because you a substituting one product for another, you are taking away demand from the original product giving its demand graph a decreasing look.

The Big Picture

     I think that we need to just take away the sales taxes and put a higher income tax for people who make more money than anyone else. Like, athletes and movie stars and others who make lots of money. The problem with that however, is that the business people who worked really hard to get to the top and so to take that money from them is hard. There are lots of ways to fix the debt but another way that would be good is to increase sin taxes on like tanning, tobacco, alcohol...etc. And also we could take away money from the defense system and the money used to give CEO's and government officials "comfort" on trips. Taking a little bit of money from about every section of spending will slowly reduce the debt.

Total Revenue Test

Demand Headlines:


1.  Starbucks's Verissimo goes on sale and they increase production, and is showing strong indication that there will great profit for the company.

2.  Increase in supply of bowling balls and price of lanes cannot bring in customers, so "lanes and pins" will have to shut down.



Rest on paper....

Sequester

  Paragraph 1:   The Sequester as the Washington Post puts it is a group of cuts to federal spending set to take place March 1, barring further congressional action. Because our national debt is so large and the federal spending is so out of control, they passed a bill to take place March 1. The bill was first passed, originally as part of the Budget Control Act of 2011, the Washington Post Says. At first, the sequester was supposed to start January 1, along with Bush tax cuts and other tax reforms. It was called the "fiscal cliff". A deal was reached and the sequester was changed to start on the first of March.

Paragraph 2:   ABC news says that the cuts were originally going to be 109 billion this year, but after we postponed the sequester it will now be about 85 billion over the next ten months. The source also says that if carried out over the next ten years, 1.2 billion will be taken off of the about 16 trillion.

Paragraph 3: CNN says that the start of the idea about the sequester started in 2011 when Republicans in Congress demanded spending cuts in exchange for giving the Obama administration the needed legal headroom to pay the federal government's obligations to its bondholders. CNN says that a lot of the cuts are going towards the Federal defense system.

Sarahs Manefesto Beta Version

Foreign Aid:
     Foreign Aid. I think that the government should help more with foreign aid, because it is the right thing to do. However, i do not think that we should help, if our own country isn't doing better.

Spring Research Project 2013!!!

https://docs.google.com/presentation/d/17hA1J-hbOqKzZigxdidmYuP6WFaeeKxRB6uhxkByyJU/edit#slide=id.gafcd737e_017

Supply wrap-up

inelastic supply: salt




 elastic supply: coke brand soda

Annotated Bibliography

Sarah Trumbo

Central Question- What was the cost of the Marshall Plan?

SOURCE #1-

 Ritschl, Albrecht. "The Marshall Plan, 1948-1951".EH.Net Encyclopedia, edited by Robert Whaples. February 10, 2008.

 URL http://eh.net/encyclopedia/article/Ritschl.Marshall.Plan

    This article explains the idea around the Marshall plan and how it was supposed to help the countries in Europe.  The writing is very structural and easy to understand. As you read through the article the dates make sense and the story is told in a very articulate manner. Even though you cannot call this article short and to the point, it clearly informs its reader of the necessary facts about the Marshall plan.

     This article helps answer my central question by giving me dates, costs, and energy given to complete the Marshall plan. It also gave statistics about the amount of money the U.S gave compared to how much it would actually help in the act to “rebuild” Europe. The statistics they gave were relevant and not used to take up space. It gives background info that I can use to make the case for my central question stronger, as well as answering it in detail. 

SOURCE #2-

Adelmann, Bob. "The Marshall Plan: the post-WWII Marshall Plan, long touted as the aid plan that reinvigorated Europe, didn't have as its first priority actually helping the citizens of Europe." The New American 23 July 2012: 34+. General OneFile. Web. 13 Mar. 2013.

Document URL

http://go.galegroup.com/ps/i.do?id=GALE%7CA299062550&v=2.1&u=ttsd&it=r&p=GPS&sw=w

    

     This online document gives a summary of why the Marshall Plan was needed. It goes through the expenses of what European countries needed to fix. Many cities and economy’s needed help. It gave more background information on why the Marshall plan was needed than how much it cost. The document was very well stated and the author obviously knew their facts about World War 2. It was organized by date not by country and theme. It was a good timeline document.

     This document assisted in the answering of my central question by basically giving me a timeline of World War two and the effect of the war on the land and economy’s in Europe. It gave me a lot of background info on why the U.S. felt obligated to help, and how much they were willing to contribute. Based on the story and facts the document gave me, it was easy for me to piece together why the U.S. gave what they did.

 SOURCE #3-

Peter J. Duignan and Lewis H. Gann 2010.

http://www.hoover.org/publications/hoover-digest/article/7689

      This article provides textual and image evidence on what the Marshall plan was. It gave number figures and stats to how the Marshall plan helped the European countries that the money went to and how it affected the U.S. It is somewhat biased saying that the Marshall plan was a great idea; however it was a good source because it gave hard facts. The article makes available the names of the people behind the plan. It articulated the evidence about the Marshall plan in a very organized and neat way, making it easy to find the information I needed.

     “The Marshall Plan” by Peter J. Dunignan, helped me answer my central question by organizing the price and stats in a neat and simple fashion, so that I could understand them. They gave why the planners of the Marshall plan wanted to give over 13 billion and not more or less. The article showed its reader (me) that what the actual cost would have been today, not back in the 50’s.  It addresses the actions of the European countries that benefited by showing how they were going to essentially repay the U.S. in the future.  

Demand Reflection

http://vocaroo.com/i/s1LKzBjh7MXM


                                                      HERE YA GO!!! its kinda short..but a good example, yo

Demand Wrap Up

DEMAND WRAP UP

PART 1

Utility- the amount of satisfaction a good provides. An example of a utility is Dutch Bros. because it provides energy and satisfy's ones sweet tooth.

Complementary Demand-  a good or service that is paired with another with the same demand. An example of a complementary demand is yoga pants and a yoga mat. They are complementary because you wear yoga pants and use a yoga mat in order to do yoga.

                                           

Substitute Demand- A good or service that satisfy's the same need that another good or service does. An example of Substitute Demand is Nordstrom and Macy's. Nordstrom is more expensive than Macy's but they sell very similar things. 

                                      

Elastic Demand- When the price changes of a good so does the demand. For example, name brand cereal is an elastic demand because when the price rises people stop buying and going for store name.

                                                                    

Inelastic Demand- Even when the prices change the demand remains the same because of its utility. An example of Inelastic Demand is greek yogurt, even if the price rose I would still buy greek yogurt.

                                                           

PART 2

Elastic and inelastic

Demand Headlines

1. Complementary- "Since the weather has stayed cold, coffee and creamer demand steams ahead."

2. Substitute- "Starbucks go out of business and the line for Dutch Bros. goes all the way to Seattle."

3. E L A S T I C- "LIFE cereal's prices have skyrocketed and the demand has died."

4. Inelastic- " Price of milk goes up, consumers buy, but moo all the way home."

 As much as people say you can substitute milk with soy, or almond milk; the milk from cows is completely irreplaceable. Milk is a utility and serves many different purposes. people use it to wash down cookies, a pb+j, to cover their cereal, to drink! Milk will always be inelastic, even if the price goes up to the double digits.

Demand and Utility

Three goods/services, that I will be purchacing this week are:
                           
                                            1. Dutch Bros. (iced kicker)
                                            2. Piano Music
                                            3. Panera Bagel (cinamon crunch)

The reason I will buy 1. Dutch Bros. is for taste purposes. I buy Dutch everyday becuase it tastes really good and gives me energy

The reason I will buy 2. Piano Music, is because we need more music for worship on sunday morning at my church. I am the worship leader at my church so i am in charge of playing the piano and choosing the music.

The reason I will buy 3. Panera Bagel, is for lunch. It is to satify my hunger needs in the middle of the day.

Markets

     The strengths and weaknessess of the American market economy are the consumers. We are both the strengths and the weaknesses. When we see a "in-style" item, we will stop buying and consuming one item and go to the next. Since a consumer is not perfect, then that means the system cannot be perfect. For example, this year combat boots came into style and other shoes like Uggs and other boots lost some of their  "status". Other things in the economy that make it strong is the unlimited quote "needs" of everyone. In America we buy buy buy. In the American economy, some things do well, and others do not.

Opportunity Cost

     A recent time for me, when I had to choose between two things was when I was deciding which release to take. I wanted to take a release but i could only have one. I was deciding between a first and a fourth. There was oppurtinity costs with both options. If I took a fourth release then I could hang out with my friends, go to work early or work out. However, if I took a first  release, I would be able to sleep in and spend more time eating breakfast and getting ready. Both were very tempting, but in the end I chose a fourh release.

Scarcity

I chose this image because time is scarce for me, I have a job, school, church, and sports, and it all takes up my time. So I hardly ever have time to just relax. So time is scarce.