It does not happen often but every once in a while we come across an instance of a government entity actually reducing its costs and inefficiency when it comes to spending taxpayer money. A short article by Ryan Tracy in the August 23, 2010 issue of Newsweek magazine reported on how the state of Wisconsin was able to make a significant cut in its Medicaid budget but still maintain quality and also keep the voters happy. Medicaid provides medical coverage and insurance for low income families and people across the country with both the Federal government and each state funding the program.
Last year, Mr. Ryan’s article stated that Wisconsin Governor Jim Doyle needed to slash the state’s Medicaid budget by 0 million. However, the Governor took a different approach than most politicians in defining what budget cuts to make. Past efforts to cut entitlement programs have usually been ineffective since it involved sitting politicians attempting to make the cuts without endangering their political futures and careers, or in Mr. Ryan’s words, “programs like Medicaid cannot be cut without political bloodshed.” Usually what happens when politicians have to make difficult decisions is they make suboptimal decisions since their actions are guided by their political careers and fortunes, not what is best for the citizens they represent.
Governor Doyle took a different approach in this case. Rather than rely on politicians to make the decisions on cutbacks, people that are mostly ignorant of how operations like Medicaid work and thus, are least likely to identify root causes of problems, the Governor turned to the people that that ran Wisconsin’s Medicaid program and asked them to come up with the 0 million in savings. The result: Wisconsin Medicaid officials found the necessary changes with the following positive effects:
- The 0 million target was met with a mix of new contracts and new procedures that steer customers to lower cost but just as effective treatments.
- Lobbyists lost influence since elected politicians were taken out of the loop and thus, lobbyists lost all of their leverage.
- Politicians were happy since they did not have to take any courageous but unpopular positions relative to budget cuts, preserving their political careers.
- Knock down, drag out political battles were avoided and changes were identified quickly rather than compromised, ineffective answers that took forever to agree on.
- Best of all, according to the article, voters are also happy.
Wow, a government entity that reduced itself in an effective and efficient manner, saving taxpayer money. How did it happen? It allowed the experts in the field, not politicians in the legislature, to identify the root causes and then solved the problem by attacking the right causes. Compare this behavior of the Federal political class that passed health care reform and financial regulatory reform where in each case, the politicians did not understand the root causes of the problems, resulting in idiotic legislation that will never solve the problems: the politicians never understood the root causes.
Since the Federal government usually pays at least fifty percent of the states’ Medicaid budget, you could assume that if the Wisconsin changes saved the state 0 million, it probably saved the Federal government about the same amount, resulting in the nation saving 0 million. Since Wisconsin’s population is about 1.9% of the country’s total population, a rough, rough estimate of national savings if the Wisconsin savings were rolled out coast to coast would be over billion a year. Taking it another step, what if those same types of changes were instituted in the bigger medical entitlement program, Medicare, on a national basis? Conservatively, at least another – billion could be saved just between Medicaid and Medicare.
This step is consistent with several steps outlined in the book, “Love My Country, Loathe My Government.” Step 1 would reduce Federal spending by 10% a year for five years in order to downsize the government out of inefficient and ineffective programs and departments. A major process for attaining these downsizing targets is to do exactly what the Wisconsin politicians did: allow the experts, i.e. the government employees who know the ins and outs of the government operations they are involved in, to identify and propose the necessary changes. The twist that “Love My Country, Loathe My Government” proposes is the implementation of a lottery system that would randomly pass on a monetary reward to employees that come up with true costs savings. Imagine what savings we could incur if similar savings were identified in all government departments.
Steps 26 to 29 would attack major issues such as reducing medical costs, instituting a national energy program, fixing public education, and implementing a comprehensive immigration reform in the same manner. It would institute panels of experts, sans lobbyists and politicians, that would identify true root causes of each issue, just like they did in the Wisconsin Medicaid area, and develop cost effective solutions quickly, without the political infighting that is never good news for the American public.
Congratulations to the Wisconsin leaders, whose foresight and courage allowed their own expert state employees to solve their budget problem. We can only hope that the rest of the political class shows the same initiative. and show it quickly. Waiting for our Federal politicians to do the same has resulted in a national debt of over TRILLION.
Conservative columnist Jedediah Bila on what spending cuts Republicans need to take on. Video Rating: 5 / 5
Question by CuriousG: How will increasing government spending for goods and services when unemployment is 10% have a different effec?
How will increasing government spending for goods and services when unemployment is 10% have a different effect from a similar increase when unemployment is 2%?
A. Government spending is more likely to increase prices than real output when unemployment
is 10%.
B. Government spending is more likely to increase real output than prices when unemployment
is 2%.
C. It is more likely that government spending would require a sacrifice of private goods when
unemployment is 10%.
D. It is more likely that government spending would require a sacrifice of private goods when
unemployment is 2%
Best answer:
Answer by Ivan Its not A or B for sure.
It is likely C or D.
I say there is a 90% chance that it is D because it is the only logical one. If govt spends money when unemployment is 2% it will be competing with the private industry, therefore taking away its resources and private goods. If unemployment is 10% private industry is hurting and govt spending will not affect the private sector that much.
Last year the world economy grew by 5% [1], the fastest in recent years, led by extraordinary growth in China and a very high growth in countries in the world, most of the other third. United States and Japan also have very strong growth, despite the West’s most pathetic performance. Can the good times last? Or global economic crisis?
Global economic boom has been rejected by two factors. This has been driven by the progressive liberalization of world trade and liberalization of the world’s major economies such as China and India third. Level of average rates in countries such as China have been reduced from 41% in 1992 to 6% in 2004. greater liberalization of world trade has increased the volume of international division of labor and help increase growth in the world to remain whole and especially in third world countries. Especially if trade is not over, this factor will continue to help the world economy to grow. Another reason for the increase in economic growth that appears is the free market reforms, carried out by countries like China will be one of the most damaging communist system in human history (which is said to be many) into a virtual paradise of capitalism “to seem not exhausted resources work cheap, but competent and well being of no country and no union, and many other developing countries that free market reforms of the various stages of radicalism. But there are also dark side of the current boom. This is driven by cheap money policy the Federal Reserve. And not just the U.S. economy depends on this foundation is not stable. Most of the rest of the world also rely on cheap money policy of the Federal Reserve. This is in part because of the world has become increasingly dependent on the growth of trade surplus with the United States created by excess demand in the U.S. is produced by Bold and the policies of that is because the U.S. dollar bearish pressure for lower interest rates to mimic other central banks cheap money policy Fed to prevent their currencies rising too quickly against the U.S. dollar value. In addition, global economic growth is also preferred structural problems in Europe and Japan. To better understand the global economic outlook, we must analyze in detail the strengths and weaknesses of the four major strength of the global economy: the U.S., the European Union, Japan and China. As the prime mover of the global movement of global economy, make sense to focus on them. There are some big developing countries like India, Brazil and Russia could also be discussed.
We start with the U.S. economy. with strong U.S. economy is that it is still one of the more market-oriented economy in the world, with the level perpajakan and regulations were much lower than in European nations and Japan. The company is also developing financial markets and institutions of higher education. This is what has contributed to America is the richest country in the world (apart from small Luxembourg) and the results are better than most rich countries to another. Although some U.S. politicians to destroy the benefits will still be a positive factor in coming years. Achilles heel of the U.S. economy relying heavily on cheap loans. Five years ago, the U.S. experienced the largest price bubble of the 1920s with valuasi technology shares, the ridiculously quality. bubble was driven by rapid expansion of money and was accompanied by a sharp increase in private sector debt and deficit balance running transactions, which they reached a new record.
Level of private sector financial savings, which usually fluctuates counter-cyclical, which fluctuated between a surplus of around 5% of GDP in the recession and around zero for a booming, has terlempar into negative territory at -6% of GDP.
When the bubble burst in the spring of 2000, the U.S. economy emerged as the background, set to a severe recession. But the recession in 2001 following the stock price bubble Meledaknya very light. Avoid a severe recession all by mixing a combination of tax cuts and increased production, and wound more quickly and higher interest rate in U.S. history, the real interest rate declined to negative territory for the first time since 1970. But this success to avoid a deep recession that occurred at the cost of maintenance and actually worsen the imbalance that created a recession in 2001. The end of the stock market bubble followed by the creation of another bubble, this time at home. Usually for a recession, and private sector debt declining household and business balance sheets of the net savings quality. But while the balance was restored after a sharp decline in business investment and profits of a family record in spending spree has never happened before, owed more households than ever before, and save up to approximately 5 As a result, budget deficit and domestic production of oats, this time against current musical trends of the recession, the deficit rose to the level of transactions running high, the private sector debt continued to rise while the number of private sector financial savings in fixed unprecedented weakness in the recession of that was even in booming. And when the economy recovered from recession, debt accumulation, of course, have increased levels. So, besides the fact that too high voting shares less than five years and now a strong company balance sheet, basic ketimpangan in the U.S. economy is actually greater now than then. This makes the U.S. economy vulnerable to crisis. And this imbalance even larger and more meaningful for the politicians and the central bank to reduce the crisis will be more limited because interest rates are far lower and the financial deficit, not surplus. So, when they come from the crisis? The exact date of introduction is not possible, of course. This will be the base when the current rise, super low interest rate that is, delete, and / or imbalances become so great that fall under its own weight. You can also say that it is not possible in the future. Although there are some signs that the housing boom started late, this will be offset by the expected further increase in business investment. With the level of company profits at near record levels remain well below the historical average and business investment remain below the historical average, it means that the company not only CASH will be required to finance the large investments without much external capital, but more important than the profit on the investment level is very high, so there is a strong incentive to increase investment.
The decrease is likely to contribute to a stable increase in the deficit and debt transactions run the private sector. So in conclusion, if we can be quite optimistic about the U.S. economy in the short term because of the explosion and likely long-term business investment because the economic structure is relatively fixed market-oriented, making the imbalance created by the Fed’s cheap money policy of a potential severe recession and a half-term prospects . But can, if strong possibility of recession will cause a reaction in the form of highly damaging protectionist, higher tax and production, or high inflation may cause long-term outlook is more pessimistic.
Europe for a long time left behind the United States and other countries in growth. Or, at least. European Union as a whole course, there are large differences between European countries. This is especially the countries three major euro zone, Germany, France and Italy, which had grown bleak. British and Spanish had a stronger growth, while Ireland and Luxembourg have been growing really unique. But like Germany, France and Italy account for more than two-thirds of the economy in the euro area, while Ireland and Luxembourg are the two smallest countries in the euro zone, their economy is more or less identical with the development across Europe.
It’s clear that the vast myth causes economic problems in Europe are too tight monetary policy of the ECB. This claim repeatedly made by politicians in various countries and the European press of business establishments. And Larry Kudlow even accused the ECB to carry out the land “fire deflationary” monetary policy. But this reputation as a kind of fortress ECB money (unfortunately) completely wrong. Has exceeded the ECB’s own target for monetary growth and inflation. During his 6 years, M3 has grown average of 6.7% compared with the speed of growth of 4.5% and consumer price inflation has average charge of 2.2% v target of below 2%. At the end of 2004, negative interest rates in the short term, consumer price inflation was 2.4%, M3 growth of 6.4% and growth in private sector debt 6.9%. The reason behind the ECB’s false reputation as a stronghold of money that appears to be a false syllogism “weak growth is a result of tight monetary policy. Europe has weak growth. That is why Europe must have a tight monetary policy.” But as the first policy is false, so is the conclusion of the syllogism.
However, the cause of weak growth in Europe was two, the highest percentage on the roots. One, government spending and the high administrative burden is much more expensive than in the United States and China. Second, the quickly aging population in Europe as a whole and especially in Germany and Italy. In countries such as Germany, France and Italy, the retirement age of 55 music and 60 years. With the average age in Germany and Italy are expected to almost 55 in 2050, this would mean that there will be much older than the older pensioners in the population of working age. In combination with the large number of working age living on welfare, it means the collapse of fiscal and large decline in the supply of labor and capital. This process took the victims, especially in Italy and Germany. Of course, the aging population need not be a problem for the economy, with the conditions that increase retirement age average in relation to the Middle Ages. But retirement has proved very difficult. When the French government to raise the age for workers pensiun 55-57,5 publicity in the summer of 2003, causing major protests and strikes, and all the politicians trying to increase the retirement age will have the same large protest and strike, and probably will opt out of the office by National welfare addicts. But unless the European politicians to take drastic action to stop the demographic explosion, increasing employment opportunities and increase the retirement age, this problem will get worse with time.
Germany recently to take some temporary measures to reduce the administrative burden is high and unemployment benefits, but these measures may not be enough to revive the German economy. European economic outlook is pessimistic. Unless European politicians dramatically change their welfare policies can be static outside of Europe to continue to decline relative to both the short and long term. And all the economic decline in Asia and the United States and further decline in the dollar could damage European export market, industry, and thus eliminate the only source of Europe has until now. Europe is a bright point for the incorporation of East European economies are relatively free market, where tax rates are very low not only compared to Western Europe, but also compared with the United States. Not surprisingly, this resulted in the rapid economic growth. And the countries of Eastern Europe has become part of the European Union will support overall growth. In addition, the increased tax competition from Eastern Europe is beginning to get some Western European countries to lower taxes, particularly taxes on companies will increase their competitiveness. If for example in Eastern Europe to encourage countries in Western Europe to lower taxes and slash social production, so the prospect can be more clear. But unfortunately, there seems very likely.
Japan has long been a star rose in the world economy, it’s more than Europe and America. But after a big share in Japan Bubble hotel in the late 1980s upset the Japanese economy has experienced a stagnation in the growth rate is lower than in Europe. This is mainly because the banking system has been hampered by the large mass jammed credit. Japanese authorities have been willing to consider short-term pain associated with the liquidation of credit to be stuck and prolonged stagnation. Japan also share a lot of problems in Europe.
While Japan has a much lighter tax burden than Europe, the burden of administration, if the worse. And flexible economic structures created by the administrative burden redistribusi quality has become a source of inefficient companies is made more difficult by the inflationary boom of the United States. For this reason, the administrative burden of creating more problems for Japan now than before 1990.
Japan also faces demographic problems even worse in Europe. Japan has more people aged 65 or more people under 20 years, only Italy as well. And what is worse. Because there is less than 24 ½ million Japanese people aged under 20, while some 35 million, half of the 45-64 year age group, it means that Japan’s working age will be reduced by more than 11 million or 14% over the next 20 years, whereas population is expected to fall only a few million. As in Europe, this will make a huge tax burden and reduce the supply of labor and capital, unless the retirement age. Which in turn guarantees a rate of growth rather sad. One bright point in the Japanese economy grew in China. China’s geographical proximity means that the Japanese media to take advantage of the increasing Western economic division of labor in this country. China has followed the United States as the largest trading partner. But Japan’s recent export growth to China saw a sharp decrease as a result of successful efforts by the Chinese government restrict credit. But in the long run, Japan should be preserved to benefit more from China to the United States and Europe. Another thing positive is that Japan will also benefit from the private sector has a lot to reduce the burden of debt, debt in the lowest level in more than 30 years. This means that Japanese companies do not risk another economic bust as a result of tight credit conditions. Its medium term, however, is overshadowed by the crisis in the U.S. and its impact on China and the world. And fall of demographic and labor resources and capital reduction, which means increased load on the economy.
Since Deng Xiaoping, China began economic liberalization and as a result has developed highly unusual. Having been damaged for centuries by the English and Japanese imperialists, the destruction of civil war, and the 30 year mark of communism Mao Zedong, China has started to regain former status as an economic power. According to official statistics on GDP by kurs dikonversi this time, the Chinese economy is still smaller than the British. But this figure is actually from China Camping measure, because no matter that the price was much lower in China than in the United. In all indirect indicators of economic size, China’s economy is far greater than English. China, for example. Batubara largest customer, fertilizer and other commodities and second-largest oil customer (the U.S.) It is also the third largest trading partner in the world after the United States and Germany. China is clearly far more important for the global economy and that United will become more important in the future.
There are many reasons to believe that China will continue the extraordinary growth of the speed of at least the next decade. Not well, no unions and a large labor supply and savings, “communist” China is a paradise for capitalists. And as shown in the success of ethnic Chinese business in Hong Kong, Taiwan, Singapore and throughout Southeast Asia, China has a strong entrepreneurial spirit. And communism is no longer producing this enormous growth potential.
Although the estimated number of farmers in China vary widely depending on who you ask, even the lowest estimate calculates that at least half of the 1.3 billion Chinese people are farmers. If the relative size of the agricultural sector up to Western standards, this means that more than 600 million people will go to work in industry and services. And 600 million people is twice the total population of the United States.
Combining with the fact that China may be the highest level of savings in the world and thus can make the necessary investment for continued high growth rates. As the Economist pointed rejection, a high level of savings is largely due to the lack of well-being of a country that compels people to save if you have enough money, for example, pay medical bills. Of course there is the potential danger for China, which can at least temporarily derail the strong growth. The rapid transition in the state could cause social unrest. China’s banking system looks very fragile because the very terbebani the jammed credit. In addition, China is too dependent on exports to the United States. Chinese exports to the U.S. last year was 12% of GDP and bilateral trade surplus was 10% of GDP.
This makes China vulnerable to U.S. economic recession. First, the negative direct effect on exports, and second, because the Chinese might be blamed for the crisis, which may create a serious blow proteksionis would damage the Chinese economy. A yuan revaluation would be a good way for China to reduce reliance on exports to the United States. Though it created a series of short-term negative effects in terms of reduced exports and reduce the value of American assets will also reduce the cost of imports. And most importantly, China proteksionis well as reduce the risk of action alleged “rigging” the eyes money (as if there is any currency that is not manipulated at this time) will be lost, and reduce the damage caused by actions such as proteksionis higher dollar value of China’s economy made by the revaluation will reduce the relative importance of exports to the United States. On the other hand, China faces potential conflict with the United States in the rebel separatist group “” Taiwan region. Prospects for China is very good, as long as they can avoid some hazards mentioned above. This means that even short-term prospects for China’s economy is strong, carry serious dangers of every crisis the U.S. economy, which in turn raises the risk of social instability and a fragile banking system. If China achieved through this crisis without breakage of the civil war, a reversal of market reforms, or a dramatic increase protectionist west or the problem of war in Taiwan, but you should be able to continue the impressive growth. History of several large developing countries such as Brazil, India and Russia, have many similarities with China, and also began to liberalize their economies, which have helped to increase their growth rates. Its potential can not be as great as that done by the Chinese because their culture is less inclined to save and entrepreneurial culture as China and Brazil and Russia are far smaller population and a contraction in the case of Russia. India is also affected by the unofficial caste system that makes it more difficult to communicate the success of the Chinese population. Russian economy, and Brazil is a highly dangerous dependence on oil and agriculture, respectively. However, many other developing countries tend to grow in importance.
For the world economy as a whole, we should in the short term they hope to extend the current boom, but at the expense of worsened global economic imbalances. American debt burden will continue to increase, while the whole world will grow increasingly dependent on exports to the United States. In the medium term, a sharp increase in real interest rates and / or reduce confidence in the U.S. will cause a recession, which spread throughout the world in terms of decline in the value of exports to the United States, both for the direct reduction of the demand created by the economic downturn and the effect of indirect from the dollar to fall and may direct the steps proteksionis. This will contribute much worse than the internal problems of the world.
For the longer term we may see major changes in the global economy with other developed countries and the increasing importance of China, while Europe and Japan will gradually decline in importance. Due to economic difficulties in Europe, it seems unlikely the euro will replace the dollar as world reserve currency. But can the long-term perspective (ie a few decades from now) the Chinese yuan yuan assume that role when the full conversion and when China becomes the largest economy in the world.
BUSINESS — US ECONOMY: Barack Obama hits campaign trail.
The United States African Chamber of Commerce (USACC) commends the immigrant community in the U.S., recognizing their contributions to the economy, intellectual capital, and social fabric of the nation. Immigrant groups across the nation contribute to the economy by filling jobs, providing services, purchasing goods and services, and revitalizing neighborhoods and communities that are in decline. Immigrant entrepreneurs take advantage of the ethnic market and ethnic clientele filling gaps left by mainstream American entrepreneurs. Thus, immigrant entrepreneurs do not displace native-born entrepreneurs but rather expand into areas not otherwise exploited, contributing to the growth of the American economy. In 2002, Hispanic-owned businesses had sales in excess of $ 226.4 billion, and the 1.2 million black-owned firms in the U.S. generated revenues of $ 88.8 billion.
Immigrant entrepreneurs contribute not only to the economy, but to the American culture as well. As one study of Little Village in Chicago indicates, formal storefronts and street vendors “complement the unique social fabric of business life in the community.” Immigrants provide new ideas and perspectives, make vital contributions in the fields of science, technology, and others, and they share their cultural traditions, art, and cuisine that enrich our quality of life.
Efforts aimed at investing resources and promoting education and culture in immigrant communities is a significant, cost-effective solution to reduce poverty, promote economic growth, create jobs, and even reduce intergroup conflict in the U.S.
The USACC is the leading advocacy organization for U.S. African relations and emerging African markets. The USACC is the umbrella organization for African chambers of commerce and professional trade and business associations throughout the United States and abroad.
Contact
U.S. African Chamber of Commerce
Martin Mohammed, President
202-465-0778
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Question by sivaket2001: US Economy?
When the US Economy come to end ? Already it is beeing started to come down.
Best answer:
Answer by shilo9i The rest of the world has too much invested in the US economy to let it fail.
Auto Currency Trading in short is an automated trading platform, which performs all the operations of the currency trade in an automated environment. If you want to earn huge profits in the field of currency trading then opt for an automated platform.
Forex trading or Currency trading is a very popular trade nowadays. According to the statistics, Forex is the largest market on the planet, accounting trade transactions worth trillions of dollars in a day. Forex stands for trading currencies that is buying a currency and selling it to make profit. The currencies are always sold or bought in pairs for example USD/EUR or Australian dollar/ USD.
The Forex is active for 24 hours of the day for 5 days of the week. Important trade transactions take place in the wee hours so the traders need to be active for 24 hour. Even the experienced players, who have earned millions of dollars worth profits, are reluctant to let loose in the night time. They are aware of the fact that Forex is a very sensitive market and they might have to bear loosing huge amount of money, if they are not taking a call at the right time when it is required. But it is humanly not possible for an individual to handle 24 hour transaction. This is why, the concept of day trading exists in the Currency Market.
Forex Day Traders
A Forex day trader is one who opens and closes all the transactions in his account throughout the course of a single day. None of the positions are held for overnight transactions. After the day trader closes his currency account, he pursues other functions of his daily chores except for Forex. This kind of day trading practice might be beneficial to enjoy a decent night’s sleep but on the other hand there is no guarantee to ensure what would happen to traders’ investments overnight. The trader might fail to react on some hefty currency swing happening overnight, if he promotes day trading practice. Due to this reason, the day traders often miss out on the long term price fluctuations. This is why Auto Currency Trading or an automated currency trading platform is preferred by the day traders.
Benefits of Auto Currency Trading for the day traders
An automated Forex currency trading isan essential toolfor those who like to trade via the internet. It is the most convenient method of trading for those who are familiar with the basic trading terms like pip, profit, and stop loss order.
The trader can save money spent to pay the broker’s fee, as in an automated platform transactions are automatically done by the system.
It performs operations in the traders account non-stop for 24 hours.
It can handle complex trading strategies of multiple transactions.
The traders’ efforts are simplified as he doesn’t need to bother about chasing information regarding the market fluctuation.
The automated Forex platforms collect the sell and buy signals of the expert players and closely monitor the fluctuations of the market.
John Browne, senior market strategist at Euro Pacific Capital, on why China is likely to revalue its currency and the US faces ‘stagflation.’
Panama and its foreign relations concern itself with two major issues for Panama’s development-the Panama Canal and international trade and shipping. Since Panama is located at the isthmus of Central America, it has good reason to be involved in most foreign counterparts. The number one foreign concern of Panama is focused on the Panama Canal. The history of the Canal, which the United States had influence over, and its current function has great impact on Panama’s economic and political policy. The major concern of Panama is to take over its sovereignty of the Canal which has various historical treaties. As Panama wants to gain sovereignty over the Canal, which is the major source of its trade and economy, it sought support from other nations to renegotiate treaties. At the same time it understands its limit against the United States who has influence over the building of the canal.
Secondary to the concern with the Canal, Panama focused on foreign policy with regards to international trade, banking, and shipping. Because most international ships passing through Central America cross over the Panama Canal, Panama gains economic advantages over this activity. Banking and commerce are also one of the major economic activities of Panama and its foreign relations. Because of the influence of foreign relations to its economic activities, Panama’s policy has concerns on these economic influences.
Aside from the concerns on the Panama Canal and the international economic influence, Panama and its foreign relations is so much involved in foreign memberships by its participation in foreign organizations that greatly contribute its economic development and sustainability. Since January 1, 2007, Panama served in the UN Security Council of the UN General Assembly as one who has been elected on the seat. It is also an active member of the international financial institution such as Inter- America Development Bank, World Bank and International Monetary Bank. Moreover, it is also a member of the Inter-American Tropical Tuna Commission. Aside from the tuna industry, Panama and its foreign relations has something to do with organizations for exporting. Panama is also involved in the Union of Banana Exporting Countries in which it is one of the founding members.
Panama and its foreign relations have contributed to its development not only in the development of certain industries but also in general development of the country as part of America. It is a member of the Central American Parliament or popularly known as PARLACEN, and the Central America Integrations System or SICA. To further promote economic development of the country, Panama and its foreign relations in America established the Alliance for Sustainable Development together with other six of its neighbors in Central America. The objective of Panama and its foreign relations and this alliance known as Conjunta Centroamerica-USA (CONCAUSA) is for purposes of providing domestic and foreign policies that support promotion on sustainable development for economy of the participating countries. Finally, Panama and its foreign relations are also involved in the International Criminal Court in which Panama is a member as well. The said foreign organization is a Bilateral Immunity Agreement of its members for the protection of the US military.
Question by Summer: Why is it important for the US to have good foreign relations?
Why is it a good thing for the US to have good relations with foreign countries? PLEASE HELP!!! EASY 10 POINTS
Best answer:
Answer by ILLEGAL TO BE ME So that we are not Isolated from the rest of the world but we need to stop being the worlds ATM machine and if they do not like us so be it we can survive.~
1) The Federal Reserve System (a.k.a. The Fed) was created in 1913 when President Woodrow Wilson signed the Federal Reserve Act into law. The past several government attempts at creating a centralized bank had failed- the Federal Reserve was a new bank that served as a compromise between privatization and populism.
2) Monetary policy is how the Federal Reserve controls the amount of money and credit in the economy. Monetary policy also affects interest rates and the entire performance of the economy. The Fed’s goals for monetary policy are full employment and stable prices, which in turn promote sustainable economic growth.
3) The Fed uses open market operations, the discount rate and reserve requirements to affect monetary policy. Open market operations refer to the buying and selling of government securities. The discount rate is the interest rate that the Federal Reserve Banks charge other banks. Reserve requirements refer to the portions of deposits that banks must maintain either in their vaults or on deposit at a Federal Reserve Bank.
4) The Federal Open Market Committee (FOMC) consists of twelve members. The FOMC creates monetary policy. The committee meets eight times a year in D.C. During meetings members discuss the economy and policy options.
5) The Fed is in charge of making sure that money and credit both grow at a pace that can allow economic growth but that also keeps the inflation rate in check.
6) A depository institution is any financial institution that mainly gets its funds through public deposits. Depository institutions consist of commercial banks, savings and loans, savings banks and credit unions. A nonmember bank is any depository institution that is not a member of the Federal Reserve System, or, a state-chartered commercial bank that has not joined.
7) Reserve requirements are requirements that are set by the Federal Reserve Board of Governors that set the amount financial institutions must reserve aside. These requirements act as controls. So, lowering reserve requirements promotes bank lending and money growth, while increasing requirements restricts lending and money growth.
Ben Shalom Bernanke is the current Chairman of the Board of Governors. He was appointed by President George W. Bush in 2005 as he succeeded Alan Greenspan.
9) Greenspan had been acting chairman since 1987 when he was appointed by President Ronald Reagan. Chairmen serve four year terms and Greenspan was re-appointed to a historic record tenure before he retired. He is remembered for his handling of the Black Monday stock market crash in 1987.
10) There are also 12 regional Federal Reserve Banks. Each bank has its own board of directors to serve to serve its region by providing economic information and advice on monetary policy decisions. Federal Reserve Banks are in the following cities: Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco.
For more information on the Federal Reserve and its components visit the government’s website: FederalReserve.gov.
Fed Sets Up Program for Minority-Owned Banks
Philadelphia Fed logo
Washington, DC (Vocus) June 18, 2008
The Federal Reserve System today announced the nationwide launch of Partnership for Progress, an innovative outreach and technical assistance program for minority-owned and de novo institutions. The program seeks to help these institutions confront their unique challenges, cultivate safe and sound practices, and compete more effectively in today’s marketplace through a combination of one-on-one guidance, workshops, and an extensive interactive web-based resource and information center (http://www.fedpartnership.gov).
“The program’s overarching mission is to preserve and promote minority-owned institutions and to enhance their vital role in providing access to credit and financial services in communities that have been historically underserved,” said Federal Reserve Board Chairman Ben S. Bernanke. “The Federal Reserve is committed to helping minority-owned and de novo banks achieve long-term success.”
Partnership for Progress provides insight on key issues in three distinct stages of a bank’s life cycle: “Start a Bank,” “Manage Transition,” and “Grow Shareholder Value.” Topics covered include credit and interest-rate risk, capital and liquidity, and banking regulations. To ensure broad access to the program, all aspects of the training will be available through workshops, online courses, and the program’s interactive website.
“This cutting-edge program, which draws on insights from economics, accounting, finance, and regulatory compliance, will become a valuable resource for institutions at different stages of their development,” said Federal Reserve Board Governor Randall S. Kroszner.
In developing the program, Federal Reserve officials met with minority-owned and de novo banks across the country as well as trade groups, bank consultants, and state and federal banking agencies to better understand the challenges these institutions face in raising capital, growing their institutions, and attracting talent. This process provided valuable insight and contributed significantly to the design of the program, which was spearheaded by the Federal Reserve Bank of Philadelphia. Key concepts from the program will be incorporated into the Federal Reserve System’s examiner training to provide a deeper understanding of the issues unique to minority-owned institutions.
The nationwide launch of Partnership for Progress follows a successful pilot for the program that began last fall. Questions and comments regarding the program should be directed to Marilyn Wimp at the Federal Reserve Bank of Philadelphia, 215-574-4197.
Question by Joe G: Federal Reserve?
Should Ben Bernacke, the new chairman of the federal reserve, use the Taylor Rule to determine expansion and contraction of money? and why?
Best answer:
Answer by battle-ax No he can’t handle money any better than you or I.
Thousands of protesters marched on the U.S. Capitol. People are sick and tired of all the Government spending and health care plan. Their calling it the “March on Washington”. There’s a growing resentment over the economic stimulus packages and bank bailouts also. They say that spending on things like a government run health insurance option could increase inflation and lead to more economic ruin.
I agree with the protesters. And it makes me mad as hell that the government can continue to spend money that we don’t have. With out any more gold to back our money, which is nothing but currency now, our dollar will soon be worth nothing but a penny.
Even though I agree with everyone protesting, I have a business to run. Sure I listen to the news and I stay informed, but I don’t let it run my life. My business helps me stay out of the government clutches. I don’t have to depend on them in any way, not for bail out, and not for health insurance. I just want them to stop making my money worth less than it already is.
I have a very prosperous business that I can help my family in this time of recession, and help others also. Not everyone in this world is in the recession mess that we are in. Right now the rest of the world is what keeps my business successful.
I believe there will be a day again when the Government gets America out of this huge debt we’re in and everyone will become successful again.
Fmr. Gov. George Pataki, (R-NY), on why the federal government can learn from how states operate their budgets.
Warren Buffett has been quoted as saying, “The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil…”. No economic issue today is more pressing than the U.S. Trade Deficit. This predicament should be America’s top priority. It is also a key reason why we have high unemployment. Yet most people in America do not understand this Silent Killer or what they can do about it. Even most economists are very defensive of our free trade policy, yet none of them can defend free trade’s 1000 pound Gorilla in the room” the U.S. yearly trade deficit. This article will outline the frightening facts and provide the reader with a number ways to make their voice heard to congress in an effort to create change on this U.S. economic crisis in favor of Fair and Equal Trade.
Here are important key facts on why the Trade Deficit now threatens our future:
1) First and foremost, there is absolutely no history that shows that any country including the U.S. can long sustain large yearly trade deficits without putting its future at risk. However, there are instances where empires have fallen due to trade deficit failures including the 17th Century Spanish Economy and a trade deficit was partially responsible for the fall of the Great Roman Empire .
2) In the last 10 years the trade deficit has averaged .55 trillion. The U.S. Trade Deficit since 1971 is over .5 trillion and .5 trillion in just the last 20 years. By comparison, the national debt is now about trillion.
3) This year the current trade deficit through May is .170 trillion on track for about .4 trillion. It’s only lower than average due to the lingering modern recession. The NAFTA (from 1993 through 2003) free trade agreement displaced a reported 879,280 jobs. Since the entrance of China, the U.S. has lost another 2.4 million jobs. The two combine for about 3.5 million total jobs lost due to the free trade policy allowing for these large deficits. This number is growing as more and more outsourcing is occurring. Last year 60% of the U.S. trade deficit was with China.
4) The free trade deficit profits have allowed foreigners to buy up America. According to the Grant Thornton report, “total assets at foreign-owned companies increased 15% to .2 trillion in 2005 from .0 trillion a year earlier and was more than three times the 1996 total of trillion. Foreign-owned assets totaled just billion in 1971″.
5) Foreign-owned companies in the United States have a work force of about 5.3 million, or some 3.5% of all workers. According to the last note (2005), they owned 15% of all U.S. businesses but only employ 3.5% of the workforce. Extrapolating this to 100% ownership (that we are on a crash course for) this would only equate to 25% employment in the U.S. This is our future.
6) Most of the U.S. trade deficit is with China and their ownership is the largest share of U.S. businesses and debt. Thus the U.S. is slowly being sold mostly to China from trade deficit profits dollars obtained from U.S. consumers.
7) The U.S. has a national debt crisis of about Trillion. However with the massive trade deficit job losses, this author estimates lost tax revenues of about trillion dollars. Thus the trade deficit contributes significantly to our national debt. Free trade is really not free!
We have a viscous cycle, we outsource jobs, increase unemployment, this creates tax losses, the U.S. goes further into debt from these lost tax revenues, the U.S. must then sell more treasury bonds to China and foreigners, consumers are forced to purchase more and more foreign imports with few U.S. made alternative products, this enables foreign to make huge trade deficit profits, which allows them to purchase more U.S. businesses and debt, foreign owned business pay far less taxes then U.S. equivalent businesses and hire fewer American employers, this creates higher unemployment and more tax losses, and the cycle continues.
9) Economic global greed is excessive; the U.S. free trade policy encourages foreigners to cheat as every country wants a piece of America. Well known is unethical trade deficit problems related to: Currency manipulation by U.S. trading partners, 2) Excessive Job outsourcing by U.S. businesses, 3) Product subsidies by foreign governments, 4) Unfair non tariff trade barriers by our trading partners, 5) Lack of intellectual property rights protection, and 6) Product counterfeiting.
10) Because of these massive trade deficit tax losses, this is like a reverse tariff that U.S. citizens must pay on trade deficit goods. These lost revenues cause increase tax programs. Every citizen must pay more taxes which means in part we are actually supporting all the unethical foreign greed issues cited above.
Finally the U.S. trade deficit is not just unethical, it is unconstitutional. The subtle reason why it violates U.S. constitutional law is fully explained at the website, CitizensForEqual Trade dot org.What the reader can do. There are a number of organizations that are trying to force congress to act on the trade deficit. Here are some websites:
1) www.citizensforequaltrade.org here you can sign a petition to support Equal Trade. This is the only website that is currently trying to force legislation for Equal Trade by acting on a Constitutional violation. This site believes the only way to get congress to act is by bringing this matter through the Supreme Court. Other sites below are working for fair trade. However, because of economic greed, forced Equal Trade is most likely necessary.
2) www.prosperousamerica.org/ This is the Coalition for a Prosperous America. They currently have two petitions one currently working on the issue of currency reform and the other to fix America’s economy. These petitions are worth signing as well.
2008 may well be remembered as the year when Treasury Secretary Henry M. Paulson Jr. stole the show from the Fed’s Ben Bernanke. The year when investing in US Treasuries seemed to be the only safe place to run. “IS YOUR MONEY SAFE?” was the media sound bite and the only thing safe enough was the “full faith and credit of the US Government.” The possibility of even the mighty FDIC going kaput gave nightmares of bank runs and CD defaults. So how safe exactly is investing in treasuries? That answer depends on your definition of safe and which type of treasury you buy. As this article will show, there have been times when certain treasury investments have produced significant negative returns.
The United States Department of the Treasury issues four types of marketable securities and several non-marketable securities. This article will only be concentrating on the T-Bill, T-Note and the T-Bond. All 3 are free of market risk only if you are willing to hold them to maturity. If you purchase an individual treasury and sell it before it matures, you run the risk of selling if for less than you paid for it, i.e. Market Risk. One contributor to the market risk is simply the transaction cost of buying and selling. Avoiding market risk and transaction costs are two primary reasons why you may wish to hold treasury investments until maturity instead of jumping in and out.
T-Bill: Almost Risk Free
The safest of the safe is the T-Bill which is issued with a maturity of less than 1 year, commonly 3 or 6 months. As of Dec 19th 2008, the 3mo T-Bill was yielding 0.0% interest. This is far below the long-term average of 3.5%. This clearly illustrates that investors are more worried about loss of capital than rate of return. Of course, the worst one year return for T-Bills in history is 1% which is great news when return of principal is the only concern. But T-Bills are not completely risk free when we consider inflation. This explains why the worst 1-year, real return is -8.8% occurring in 1941. Figure 1 illustrates the US inflation rate from 1914 through 1998 and is included here to provide a sense of how much inflation can change in a very short period of time. It is important to recognize that 1941 was not the year with the highest inflation rate on record, but a year following a period when no one cared about inflation. So again, T-Bills can be considered relatively risk-free for your capital, but that doesn’t mean that they should be considered risk-free to you.
Figure 1: Data from the Bureau of Labor Statistics
T-Note & T-Bond: A Risky Asset Class
The most commonly quoted treasuries are the T-Note and T-Bond and this is where the concept of risk-free really breaks down. T-Notes are issued with maturities from 2 to 10 years and T-Bonds can be issued with a maturity up to 30 years. As with the T-Bill, both the T-Note and the T-Bond bear no market risk if you hold them to maturity. But with the 10 yr T-Note yielding 2.08% and the 30 yr T-Bond yielding 2.56%, I wonder how many investors are truly planning and capable of holding them until maturity. I would wager that most individual investors do not hold today any securities that they purchased 10 years ago. Most get bored or lose faith and change their investments every couple of years which introduces market risk, the risk of selling the investment at a loss. Also, as time passes, the T-Note and T-Bond will be subject to pricing pressure. For example, the worst 1yr return for the T-Bond in history is a -9% which occurred in 1999. When you include inflation, the worst T-Bond real return was -15.46% occurring in 1946. These numbers hardly support the claim that the T-Note or T-Bond is risk-free. Both are yielding close to their all time lows. For example, Figure 2 illustrates this point for the 10 yr T-Note going back to 1964 and clearly shows that today’s yield is very close to the all time low of 3.09% in 2003 and significantly lower than the high of 15.84% set in 1981. Additionally, the 10 yr T-Note today is yielding 1.0% less than the year-over-year core inflation for Sept 2008 which was 4.94%. This means investing in the 10yr T-Note is a guaranteed loss if the annual rate of annual inflation continues. By way of comparison, investors were demanding a 5% yield over annual CPI in 1995. So both the T-Note and T-Bond would appear to have significant downside risk from inflation moving forward.
Figure 2:
How bad can it really get in treasuries?
What would cause the supply of treasuries to increase more than demand? After all, price and yield is simply based on supply and demand. Currently the supply of treasuries is increasing but not as fast as demand, so yields have fallen and prices have risen. What happens if demand contracts? Well perhaps it is important to recognize that in 2007 57% of all US treasuries were owned by foreigners compared to only 12% in 1978 and 35% in 2000. In 2007, China owned 22% and Japan owned 29% of all US treasuries. What would cause foreign governments to sell or reduce their appetite for US treasuries? Foreign governments typically hold US treasuries to help control their currency or more accurately, to “defend” against currency devaluations. In times of crisis, they can sell their US dollar treasuries to try and defend their currency from extreme devaluations against the dollar. This occurred in 1997 as Brazil, Russia and the Asia Tigers defended their currency from the devastating currency devaluations at that time. In Nov 2005, the Federal Reserve Board of San Francisco released a study containing this line: “If the sale of dollar-denominated reserves took the form of a sale of US treasury securities, then the price of these securities would decrease”. So prices can decline if foreigners sell the Treasuries or just simply buy fewer. Remember, treasury bond supplies are going up so demand must increase at the same rate or faster or else prices will fall.
Besides foreign demand wavering, another scenario which may cause treasury prices to fall is simply inflation increasing to 7% or even 10%. This may seem far fetched but no more far fetched than predicting that AIG, Freddie Mac, Fannie Mae, Lehman, WAMU and Wachovia all would be gone. It might not be very probable that CPI will rise to 7% over the next year, but it is absolutely possible. Will it? I don’t know. But I do know that at today’s treasury yields, prices have more downside than upside. Even if the Fed Target Rate drops from 0.5% to 0.0%, how much farther down can treasury yields go? Will investors accept negative nominal rates in addition to negative real rates? If that is the world you really expect to unfold, you might wish to forget buying treasury for safety and go directly to guns and gold.
Inflation, The Silent Killer
You no doubt are tired of me mentioning inflation. Perhaps many of you are asking why you should care about inflation when world stock markets have crumbled over 30%, corporate bonds have lost over 20% and even municipal bonds have lost around 10%. The last thing you and most other people care about right now is inflation. And that is the point; it is the risk you care least about that leads you to accept the lowest premium for accepting it. Today, people are asking no return for accepting the risk of inflation. It is the punch that you don’t see coming that lays you flat. Whether we are immediately facing inflation, deflation, hyper-inflation, or average inflation is anyone’s guess. But in the next 2, 5, 10 or 30 years, I have to believe it will be closer to the long-term average of 3%. One further item I would like to include about inflation is that the Social Security COLA adjustment for 2009 is 5.8%. This is the largest adjustment since 1982 and compares to the 2007 adjustment of 2.3% which was the lowest since 2003. This further should show just how real inflation is and how quickly it can dramatically change.
Look before you Leap
Today, treasury yields are at all time lows which means treasury prices are also at all time record highs. So moving to T-Notes and T-Bonds may be moving from the frying pan into the fire. T-Bills could be the deep end of the pool where investors drown under inflation. Of course, I was recently reminded that in times of panic, people only care about the return of their capital, not the return on their capital. But please remember that stock market peaks occur when everything is “priced to perfection”, so the slightest disappointment can lead to a dramatic fall. The opposite, mirror reflection is also true for treasuries which today might be “priced for depression”. The pendulum has swung to the far side of negativity so the slightest bit of good news could lead to the treasuries fall from glory.
In conclusion, treasury securities never were, never are and never will be completely risk free. They maybe close, but close only counts with horse shoes and hand grenades.
A First – Geithner Speaks on G-20, Automaker Woes, Government Intervention, and Financial Crisis (Bloomberg News) Video Rating: 5 / 5
Question by Mr J: US Treasury??????????????????????????????
What is the most common use of money made by the US treasury?????????????????????????????????
Best answer:
Answer by Ryan It is typically used to finance government spending.
However the treasury does not make money. The federal reserve (central bank) does.
However since the central bank is obligated to purchase treasury bonds, the treasury simply sells the bonds to the central bank (which the central bank has to make money to buy). This produces money extra money and extra money for the treasury.
Give your answer to this question below! US Treasury Plans 2 Big Sales Of AIG Stock In 2011 -Reuters
US Treasury Plans 2 Big Sales Of AIG Stock In 2011 -Reuters Read more on FOX Business
Ben Shalom Bernanke is the current Chairman of the Board of Governors. He was appointed by President George W. Bush in 2005 as he succeeded Alan Greenspan. 
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