When your boat is already full of water why would you want to put more in?
Archive for the ‘Economics’ Category
A Simple Depiction of the Stimulus Effect on the Deficit
Saturday, July 31st, 2010
Who Knew? – US World’s Largest Exporter
Saturday, July 24th, 2010Contrary to what you hear in the news, the United States of America is still the world’s largest exporter of Goods and Services. Now its true that China exports more goods, but the US has become such a service based economy that when they are included we exported about $200 Billion more in 2009 than China did.
Also as a side note, Germany is the second largest exporter. That’s pretty impressive given the difference in populations between the three countries.
Table taken from here. And the WTO report can be found here.
| Exports in 2009, billions of U.S. dollars | |||
|---|---|---|---|
| Merchandise | Commercial Services |
Total | |
| U.S. | 1,057 | 470 | 1,527 |
| Germany | 1,121 | 215 | 1,336 |
| China | 1,202 | 129 | 1,331 |
HT:Cafe Hayek
Economics at Work
Saturday, July 24th, 2010One of “laws” of economics that most politicians forget whenever they write a new piece of legislation is the Law of Unintended Consequences. Here is another example from the Obamacare Bill.
Some major health insurance companies will no longer issue certain types of policies for children, an unintended consequence of President Barack Obama’s health care overhaul law, state officials said Friday.
…Insurers are worried that parents will wait until kids get sick to sign them up, saddling the companies with unpredictable costs.
…”We believe that the majority of people who would buy this policy were going to use it immediately, probably for high cost claims,” said Kammer. “Guaranteed issue means you could technically buy it on the way to the hospital.”
You can read the whole article here. This is already a common problem in Massachusetts where insurance premiums are the highest in the country.
Why Minimum Wage is a Bad Idea
Sunday, June 20th, 2010This should be really obvious to people but for some reason its not.
If my business brings in $100 an hour in revenue and I use all this money to pay my employees $5 an hour I can afford 20 employees. However if the government mandates a higher minimum wage (say $5.50 an hour), I can now only employee 18 people. Those 18 are definitely better off then they were before, however there are now 2 more people unemployed.
Here’s a video that also breaks this down.
A New Definition of Entrepreneur
Sunday, May 16th, 2010Webster’s defines an entrepreneur as “a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.”
Apparently Nancy Pelosi believes that people should be quitting their jobs that society believes are more productive (since they pay more when including benefits) for those which society deems less productive. That’s just what America needs as we try to turn our economy around.
I don’t have any issue with people who make a living doing music or photography, what I do have a problem with is subsidizing their lifestyle with other peoples money.
The Beauty of Capitalism
Thursday, May 6th, 2010One of the great things about Capitalism is that change is driven by the consumer, not some government panel of experts. Case is point is an American classic – the Minivan.
And just as the minivan has changed, so has its advertising. Here is a commercial for the very first minivan offered by Chrysler in 1984 and below it is one for Toyota today.
Ok this one is a bit longer but pretty dang funny…HT to my wonderful wife for sending this to me.
This also highlights a huge shift in marketing from being almost exclusively on TV (the first clip is only 30 seconds) to making commercials exclusively available on the internet.
Dave’s Cartoon of the Day
Friday, April 30th, 2010
Dave’s Cartoon of the Day
Friday, April 16th, 2010
Responsibility to the Poor
Monday, April 12th, 2010What is the Government’s responsibility to the Poor? In my (Dave’s) opinion, probably nil.
However we as individuals do have a responsibility to take care of those in need. This is why myself (and many others) give away large percentages of our income (often above 10%) to help take care of those in need. By contrast many proponents of large government, like our own Vice President, give away very little (in his case less than one half of one percent).
HT: Carpe Diem
Can we afford it? – Part 1
Saturday, March 27th, 2010Have you ever made a purchase, brought it home (or moved into it if it was a home), and then had that brief feeling of wondering “Can I really afford this?” Of course at the store, dealer, realtor’s office, you told yourself if I just cut back here and there, bring my lunch to work once a week, not get that extra Starbucks, I can totally afford this.
We’ve probably all had that feeling at one time or another and hopefully it was on something small (like the PS3 I bought myself for Christmas). However now that the dust is settling on the health care legislation I’ve been wondering…Can America afford this?
Aside from your ideological views on whether health care is a human right, all of us must decide if we are willing to pay for this new initiative, because it is We the People who will be paying for it.
In that spirit my next couple of posts will give some thought to this question.
Issue # 1 – The Federal Government is really bad at projecting costs – via American.com
Take Medicare, for instance. In 1967, long-run forecasts estimated that Medicare would cost about $12 billion by 1990. In reality, it cost $110 billion that year. Today, it costs $500 billion.
Moreover, based on Congressional Budget Office data, this chart below illustrates how long-term projections of Medicare spending have steadily increased, even in recent years and over short periods of time. In 2005 for example, CBO projected that Medicare would cost $1.5 trillion in 2050. Two years later, in 2007, the same CBO projected that this cost would reach $2.8 trillion. And in 2009, it projected that the cost would be $3 trillion instead. In other words, this projected cost doubled in four years.
In other words this new entitlement program will cost billions, and maybe even trillions more than is being advertised. So do you think we can afford it?
