Roanoke College Economics: Kassens' paper makes Top Ten list on SSRN

Roanoke College Economics: Kassens' paper makes Top Ten list on SSRN: The Social Science Research Network describes itself as " .. . devoted to the rapid worldwide dissemination of social science research and...

Miss Millie has another question for ECON 122 students!

For an extra credit point be sure the send your answer to Dr. Kassens via email.

Question: The Employment Situation Report came out on Friday.  What was the reported labor force participation rate?

Roanoke College Economics: ECON 122 Student Blog

Roanoke College Economics: ECON 122 Student Blog: Students in Kassens' ECON 122 (Principles of Macroeconomics) class are finished with their blog assignment. Clearly these are some bright s...

Critique-America's Jobless

I really enjoyed reading this
blog post because I think that it does a great job of explaining how bad the
job market is right now. The mining example does a great job of demonstrating
how desperate some people are for work in the United States. It also
demonstrates how even if somebody was willing to do such dangerous work, it is
very hard to get that job because of the employers uncertainty about the
current economy. Unemployment is so high in the United States because the
economy is very unstable right now and hiring new employees is very risky
during these times. It is crazy how people who are very qualified for jobs are
having a hard time finding them right now. It is crazy that veterans are having
a tough time finding jobs in the country that they risked their lives to fight
for. The only part about this blog post I would have possibly done a little
different is that I would use a different example that had to do with employers
in the United States. The example used is very interesting because it
demonstrates that it is really hard for an employer in another country to hire
workers from the U.S. because then they would be responsible for transporting
the workers to the country and also they would be responsible for setting them
up in the country. By the time the employees were finally ready to work, the
employer would have spent a lot of extra money that they would not have had to
spend if they hired workers from their own country. The example showed that it is really difficult
for Americans to get jobs in other labor markets in other countries but it did
not show the other sides of unemployment in our country. The post needed an
example that used employers from the United States so we could see why it is so
hard to find a job in our own country. The reason someone would leave to work
in another country is because of the problems here and I don’t think that point
was made. I enjoyed this blog post and I agree with every point that was made in
it about unemployment. However, using an example that shows why it is so hard
to find a job in the United States right now would have made it easier for
somebody to understand what a big problem we really do have in this country in
regards to unemployment.

Tien Nguyen - Critique on "Korea" by Colin Picard

            This article mentioned the great success of Korea’s rise in its economy. One of the main points is how Korea is a huge net exporter company that contributes to their GDP. I do agree that being mainly a net exporter country will contribute to a higher GDP. As discussed, net export/imports directly ties in with the GDP equation, while the US is an importing country, the NX of the equation is negative, taking away from GDP. On the other hand while Korea is mainly an exporter, they are selling their goods overseas, giving them a positive number on the NX side, adding to their GDP.

            The writer did mention that South Korea’s labor force is also really strong, does this mean they are fully utilizing their available worker and is at their natural rate of unemployment? I personally do not agree with the statement that South Korea’s labor force is really strong. I feel like Korea probably knows how to utilize their workers and hire the best to avoid failed hiring and losing money which contributes to GDP. Though, in order for Korea to have a strong labor force, full employment should be met. The writer himself mentioned women, even though they have a great education, are not being used in the labor force. It does not mention if they are considered unemployed or not, but to be able to use all their resources to meet the PPF curve, people who are able to work should be in the labor force, women included.

            I do agree that government’s regulation has a huge impact on Korea’s hit or miss economy. Because most of the powerful corporations are own within the family, it is hard for outsider’s to come into higher rank of the business. If the government were able to put forth laws that prohibits one family from being the major contributor, shareholder, higher rank in the business; rather than the company falling to pieces if the family were in financial turmoil, they can then use the assets from other people to prevent the business itself from being in the same condition. Also, if this were to happen, as the writer has stated, GDP would not be as good and could also lead Korea in a terrible recession.

            Overall, I agree with how the writer analyzed the article on Korea’s current condition and how they’re utilizing their labor force.

Anouk van Gaalen

Critique on the blog “Unemployed Veterans”

As the author of the blog mentions the economy has been suffering lately and the job market has been very tight. Even though the economy has shown a slight growth lately, there are still a lot of people without a job. Especially for veterans it can be very hard finding a new job, since they have a different education than is needed for most jobs and especially for the job vacancies. This is called structural unemployment: there is a mismatch in skills between the veterans and employers, but also cyclical unemployment, since the veterans have an extra hard time finding a job because companies are uncertain about the suffering economy and they are not hiring. That is why the government decided to interfere in the economy with expansionary fiscal policy: a bill that is supposed to provide more jobs for veterans. They are lowering the taxes for companies if they hire veterans and the government will retrain veterans to make them hirable for different kinds of jobs. As the author of the original post states, this reduction in taxes for companies is supposed to reduce the unemployment rate, this will increase the national income and therefore it will be a boost for the economy, so will the new education for the veterans give them more chances to be hired and thereby reduce the unemployment rate, increase the income, and the Gross Domestic Product therefore as well.

As the author of the blog says the lowering of the taxes will encourage businesses to hire veterans, because this means that their total amount of cost will lower and the company will be more profitable. The companies can either spend the extra money, which means that the GDP will grow (Investments) or they can reduce the prices of their products or services so that the demand for their product will rice and the GDP will rise through the consumers.  This shows that the lowering of taxes is increasing the GDP and therefore expansionary fiscal policy.

This bill is however only a small part of the Job Package Obama promised. The veterans are only a small part of all the unemployed people. There will have to be a lot more policy to reduce the total unemployment rate. Obama promised to create one million new jobs to reduce the high unemployment rate and so far he has not been successful doing that. Even this bill for the veterans is not signed by Obama yet, but the White House has said that it supports the bill, so it is likely that this bill will go through. This means a step in reducing the unemployment rate in the United States.

Stephanie Parenteau - Critique of "Unemployed Veterans"

Approximately two weeks ago, the House passed a bill with the motive to help unemployed Veterans find work, and also to redefine the qualifications for who is eligible for federal help under new health care reforms. Essentially, the bill was passed to stimulate the business cycle and reduce the economy. Tien thoroughly explains the potentials of the bill, and why she agrees with the House that the bill will do more good than harm and will in fact stimulate our deteriorating economy. However, I disagree with a lot of what this bill has to offer.

  In my opinion, the economy’s two main detriments are its unemployment rate, and the amount of government debt. This bill provides jobs for unemployed veterans by providing employers with tax credits. When an employer receives a tax credit, it reduces the amount of taxes being paid to the government, causing a chain effect that eventually results in government debt increasing. While providing tax credit for employers, the bill also states that it will provide education for veterans in order for them to become more qualified for various positions. Who is ultimately going to pay for this education? The government will be spending more money providing education and job retraining programs, and again will increase government debt.

Currently, there is a very large amount of frustration throughout the United States regarding unemployed students whom have received college degrees and even secondary college degrees. These unemployed students are obviously already well-trained and qualify for many positions in our business cycle that are just not available right now. Not only will this bill proposition result in more government spending, but it will reach an even more unemployment rate for students. I respect veterans tremendously, and do agree that something needs to be done to help for a lesser unemployment rate, but this isn’t a good way to do this. I’m not exactly sure how the government could provide jobs for these vets without increasing their amount of debt, but they need to primarily worry about government spending over anything else.

As for the other half of the bill, which explains that the government will redefine eligibility for federal help under health care reforms, I do agree with Tien that this will help decrease the federal debt deficit, and will make a lot of tax payers happy. Health care is one of the many assets that cause for so much government debt, due to the amount of money the government supplies for these reforms. I think that this part of the Bill will inevitably help the economy and reduce the government debt, while reducing the amount of angry tax payers that have to pay taxes for all of this health care. When reducing eligibility, the government is able to use this money for something else that could quite possibly be more detrimental right now than people with health care.

I do strongly wish for the government to somehow reduce the number of unemployed vets, and provide health care for people who are not financially stable. However, I only agree with the second half of this bill. The United States has the largest amount of debt in the world, and anything that we do to worsen this debt is not going to help the economy. More government spending and less tax collecting might help the veterans and the economy temporarily. But in the long run, it’ll cause the same problems (maybe not as crucial) as when the government was providing financial support for banks when the housing market crashed in 2008. The economy and the government will benefit, however, from the regulation of eligibility for financial support from health care reforms.

http://money.cnn.com/2011/11/16/news/economy/unemployed_veterans/index.htm?iid=SF_E_Lead

Critigue - America's Jobless

Colin Picard

In the article "America's Jobless," large amounts of people looked to find a way to apply for the job of miner in Australia. Such a job is incredibly difficult, and challenged my view that many Americans forced to work manual jobs, because they saw them as menial. I believed this from firsthand experience from my brother, who has gone through long stretches of unemployment through the reasoning that since he has worked for so long as a waiter, server, cook, busboy, and barman, it is time he can find a position like manager. I did not doubt that marines and miners could handle the job, but investment bankers and people with art degrees seriously considering it surprised me.

The main thing to consider is obviously the pay; give enough money, and people will do near anything. This apparently includes living underground for weeks at a time mining. The article argues that taking up the mining profession in Australia, while high-paying, is unnecessary, as those same would-be miners could find the same job in Canada or the Dakotas. I agree with the statement that many jobs go unfilled because people are simply not aware of them. People have always been willing to travel great distances for employment; my grandfather is a three-generation New Yorker who went from putting down land lines on Long Island, to serving in the Army during the Korea War, to retiring in Pittsburgh after twenty years with Bell Telephone/AT&T. The article seemed to argue that people often will not move for a job unless given extreme amounts of money, but I disagree with that. While $200,000 a year would convince ME to travel to work in Australia, $50,000 a year would get me to across the entire country.

It is unarguable that employers are willing release skilled, experienced workers in exchange for unprepared ones; which is a major reason young people out of college struggle to find jobs. The article's point that that particular miner was so highly paid was because of his experience is correct though. Mr. Salisbury, no matter how good a cook he is, cannot arrive with the same skills and abilities of the $200,000 miner.

"Original - Herman Cain" Critique by Wyatt Reeder

Greg Long explains Herman Cain's "9-9-9" tax plan. Mr. Cain's proposed tax plan is aimed at "leveling out" the sales tax, income tax and personal tax on businesses. Some see this idea leading to the revival of the US economy. However, it does not quite make sense to me. While it is said in an animated film, used to generate support for his campaign, that "$2 trillion would be added to the GDP and 6 million jobs would be created", it fails to highlight that the tax on some households making below $20,000 would indeed increase "nearly 950 percent". While this would not seem like much of a burden to a millionaire or billionaire, someone trying to scrape by on welfare and provide for their family would be in even more trouble. This does not seem "fair" by any means to me.

While corporations do play an important part for our GDP, if we are going to be fair about things, why should they receive breaks just because they provide jobs? Companies such as BP Oil, which in 2006 spilled 4.9 million barrels of crude oil into the Gulf of Mexico, not only dodged much of the promised restitution and damages, but also under Herman Cain's running platform, would receive tax cuts and rake in more money. It is instances such as these that make Americans distrustful of big business. The fact that individuals want to not only forgive corporations and allow them essentially free-reign, but prostrate their control over our economy is appalling.

I have to disagree with Greg when he says that the simple answer to our national crisis is taxes. Although there has been an increased amount of spending on the part of the government, I would say that it needs to stay the same. This does not mean that change in ways it is spent can occur. There have been unwise decisions, but that can be expected. The people of the United States are not ready for a change as drastic as the "9-9-9" plan that could possibly destroy families that are already suffering, simply because they might have had bad luck. It is not right to say that while someone "rich", whether they make their money through hard work, playing a game or entertaining millions should not have to pay their dues. That is what America is, is it not? "The Land of Opportunity", where one can make their dreams come true? But who is to say that there are not those who are as talented, or those who do possess the same work ethic and determination and are simply less fortunate? Make a reasonable tax plan, if any, and make smarter decisions when spending.

Tamika Rickman – Critique on “A New Method to Save Our Economy”

William Reitan explains how the economic times are different and more promising today than the economy in 2008. During the recession in 2008 the government bailed out banks by giving banks large sums of money to compensate for the loss of money giving out to homeowners. Today the banks are lending money more carefully and analyzing their balance sheets and working with their reserves and available capital more closely. I would agree that the government bailing out the banks was a good idea because it helped banks to recover from a great loss due to the price of homes falling and homeowners were not able to pay off their loans. Also the government also helped to increase the money supply in the economy; therefore preventing inflations or deflations and a further decline in the economy. The government also prevented millions of people from losing their homes and becoming homeless and jobless. However, this action severely hurt the government by further increasing their debt and then having to increase taxes for taxpayers to bail out the government. The government’s actions went against the belief of capitalism, whereas, the markets control supply and demand, not the government. This may allow the government to gain too much control, increasing their power over capitalism. Businesses and banks have to work together to stimulate the economy and not depend on the government to help bail them out in order to reach some type of financial stability, otherwise the government will further sink into a large debt and will depend on the citizens to pay their way out which will just prolong the recession. I must admit that some government assistance is needed to help solve the economy but some structure is needed to help stabilize the cause, such as, the money is given to the banks as a bail out but a repayment must be paid within a certain length of time to avoid raising taxes and prolonging the government’s debt. Handing out large sums of money in a crisis without some type of structure and having tax payers pay the price is not the answer because it is truly hurting the economy. I also disagree with the idea of helping of other countries to pay off their debts, especially when other countries have no interest in helping us. Our interest in other countries is one reason why we have such a large debt of our own. We spend so much time being involved in other countries issues that we neglect our own. So many companies move overseas which hurts our economy because we are losing businesses and jobs bank in the states. The government needs to focus on encouraging companies to remain in the states and increase the exports of materials and decreasing the amount of imports. Other countries have to find solutions on their own to extinguish their debts while we focus on becoming the super power once again.

"Should the Fed buy bonds?" Critique by Colin Illar

In response to the blog post "Should the Fed buy bonds?", there are many things to look at. For one, the post was very well written. The author adequately organized the post to include background information of the article as well as plenty of analysis regarding economic concepts included in the article. My only critique as to the way the article was written would be a little more expansive of a summary of the initial article. The blog post had a much bigger focus directed to analyzing the economic concepts involved in the article such as quantitative easing and Federal Reserve policies. If a broader summary of the article was given in the post, it would be easier to compare and contrast the various policy options for the Federal Reserve.

As for the analysis of the article, I find myself agreeing with the poster on a few concepts and disagreeing on others. I do agree with the analysis that more quantitative easing may not be a good policy measure by the Federal Reserve. As the article and Cole's blog post point out, quantitative easing has been tried twice before with minimal to no effect on the economy. It has kept interest rates low, which was a success, but this has not led to the desired effect. I also agree with the poster's argument that the Federal Reserve cannot fix this problem on their own. Other factors have been strongly affecting consumers willingness to spend in the economy and on bonds that are available at such a cheap rate due to the low interest rates. The easiest explanation to this could be a severe lack of consumer confidence in the market. The confidence could be affected by many factors, including the gridlock regarding new legislation to create jobs, continuing stagnation in employment numbers and increasing bad news regarding the economy, such as news that American Airlines, one of the largest airline companies declaring bankruptcy following one of the biggest travel weekends of the year. All these factors can drown out news of low interest rates and expansionary policy measures by the Federal Reserve, so until consumer confidence is stabilized, the Fed's current options will continue to under perform.

Regardless of all the analysis I agree with, I still find fault with the last statement made by the poster, that time will fix the low consumer confidence. I think that rather than time leading to more consumer confidence, I believe that more time with this little improvement will create more of a downward spiral regarding confidence. As younger generations graduate college and look for jobs in an uncertain market, it is likely to me that the low confidence will spread to the new additions to the labor force. The fed and the government need to try everything they can regarding the economy to create a higher confidence in younger people who are more likely to spend with less things to pay for.

Charla Henley-Critique Blog Entry #2

In response to Madison Phillips--"Higher Education and the Economy: The next bubble to burst?"

In response to Madison’s “Higher Education and the Economy: The next bubble to burst?” I would like to first say that it is an extremely well written and well thought out piece. However, although it is strong and I truly enjoyed reading it, I think there’s some room for more economic connection. Many significant numbers are presented in her post in regards to debt. Here, Madison provides that “Grubb continues in saying that the 2008 reported average debt of graduating seniors was $23,200.” Economically speaking, if we have graduates fresh out of college in double-digit debt as presented here, that is going to decrease confidence in spending and probably increase uncertainty. In my opinion, graduates are going to be less likely to make long-term investments—such as buying a house or car or even putting significant amounts of money into savings or the stock market—because they are worried about their debts and unwilling to risk falling further into debt. Recent graduates may also hesitate to make purchases to furnish their houses or apartments, and may shop for cheaper groceries and other necessities for the same reason. Ultimately, I see graduate debt as a decrease to the product demand curve and I wonder if that will also raise prices and have a negative influence on product supplied.

Earlier in her post, Madison wrote that, “The New York Federal Reserve Bank places the total amount of debt due to higher education costs at $550 billion, and even suggests that this number could be underestimated. It has been said that the total amount of outstanding debt from higher education could surpass $1 trillion in the near future.” The values presented here frighten me because we are talking about billions of dollars in debt. However, it is important to remember that this number is a compilation of everyone’s debt due to higher education. After a quick search on Wikipedia, I was able to find that the United States had than 18,248,128 students seeking higher education in 2008, according to the US Department of education. If we divide the estimated $550 billion total for graduate debt by the estimated number of students seeking higher education in 2008, the number is $30,140, which is only slightly more than what Gibbs presented in the first point I mentioned. Moreover, Madison pointed out that, “’The 2008 census reported average earnings of those with advanced degrees, (a master’s professional or doctoral degree), totaled $83,144.’ Those with bachelor’s degrees made $58,613, while people with high school diplomas had average earnings at $31,283. These numbers show that education really does, or can, pay off in the long run.” Madison is right to say that in the long run, the pursuit of a higher degree does indeed pay off. Clearly people pursuing these professional degrees are, on average, better off than those who choose otherwise. The students who seek a professional degree, who may average about $25,000 in debt, are making the money to pay it off. Therefore the argument that says that the amount of debt is too high for the degree earned to matter is false.

When the New York Federal Reserve Bank or any department releases numbers like the one presented above (“$550 billion”), as a total, it makes matters seem so much worse than they are. As Madison also pointed out in her post, the media makes reference to many schools with higher tuitions when they report average debt. The reality of the matter is that many graduates have less debt then they report but their reports make the readers or viewers feel like education, and the pursuit of it, is not all it used to be. Economically speaking, it is not ideal that these reports are coming out and making education look too expensive because education is very important in ensuring economic growth and advances in technology. If the media keep making education look like it isn’t worth the investment, people are going to stop seeking higher degrees. While higher education is not the only way to ensure technological advancement, it would not be beneficial to our nation to have people pass up higher education just because it is an investment.

In response to Madison’s title “Higher Education and the Economy: The next bubble to burst?” I’d like to call attention to her statement that a bubble is something that is overpriced but has great support. I’m not so sure that education is really a bubble because I think it is priced where it needs to be to allow demand not to overhaul supply. If we made education cheap and everyone pursued a higher degree, there would be no distinction between the “higher” piece of higher education; because everyone would receive the “higher” education degree. The price of the schooling is supposed to help balance out the supply and demand of a higher education. That is why the prices keep rising. Not everyone can pursue the degree or they’ll be nothing “higher” about it.

Ultimately, I think the only concerns I have in regards to higher education and the economy are that graduates have low confidence and high uncertainty of where, how, and when to spend their money, so as not to plummet further into debt; and how the media portrays educational debts. I think higher education is priced where it needs to be to maintain its title of higher education, therefore I do not think it is a “bubble” waiting to burst. Finally, I think higher education is a necessity to promoting economic growth and technological advancement so I think it is important to keep up the number of students pursuing higher education. And great job Madison! I really enjoyed your original post!

http://en.wikipedia.org/wiki/Higher_education_in_the_United_States

Critique on Graduates Returning to the Nest- Kim Ceres

“As new graduates return to the nest, economy also feels the pain” is an article that explains the affects of graduates moving home on the economy. This article describes how recent graduates move back to the nest in order to save money. Which is beneficial for them but it has a dramatic affect on the economy. Recent graduates that do not move back home have the potential to have a large affect on the economy due to the fact there are a lot of goods that they would need. New graduates need items such as cars, refrigerators, silverware, etc. Before reading this article I never realized the effect that recent graduates have on the economy. In addition, I found it to be very interesting how much the current economy is affecting students. Especially to the extent in which, that students are opting to move home instead of paying for housing. I thought it was interesting how Anuk brought up the argument that companies do not want to hire students right out of college due to lack of experience. I disagree with the argument that companies are less likely to hire students right out of college because a lot of times companies would rather hire new workers. This is because they are cheaper and usually have stronger computer skills. Although, I feel that lack of experience could be an issue for some professions that require more experience in a particular field such as a head of a department or an upper level manager. I agree with the argument that since graduates are moving back home this has a strong affect on the economy. I agree with Anuk when she explained how the economy is “losing” out on the recent graduates’ consumption. Due to the fact, that since they are moving back home they will not be needing to purchase larger items such as refrigerators, microwaves, and other household appliances. This decreases the output in the economy since, graduates will be consuming much less than they would if they were not living at home. In addition, I agree with the argument that since aggregate demand is decreasing due to the lack of consumption, it results in a surplus in the economy. In turn, decreasing the level of production and increasing unemployment. If recent graduates had more faith in the economy it would help to increase consumption dramatically and raise GDP and hopefully help to decrease the unemployment rates.

Roanoke College Economics: Dr. Kassens on News 7

Roanoke College Economics: Dr. Kassens on News 7: Dr. Alice Louise Kassens was interviewed by News 7 today in front of West Hall to comment on consumer sentiment in VA and Black Friday sales...

Cole Brundage, Critique of "The Indebted Ones"

This very informative article discusses one of America’s largest financial issues, the extreme increase in student debt. Referring to a chart in the article, in 2001, there was a total of around 50 billion dollars in student loans. Now, only 10 years later, student loans are getting closer to 110 billion dollars. This is a significant problem that will require some type of reform to get past. Stephanie did a quality evaluation of the original article. In the first paragraph, she mentions that the unemployment of college graduates is 11.5% and the unemployment of non-college graduates is 4.4%. Looking to the original article, I think she got this backwards. However, I very much agree with her statement about how the more education you have, the more likely you are to be able to find a job. I also agree with her statement about how this desire for additional education naturally causes an increase in student debt. Overall, the job market has become intensely more competitive than it once was. More and more people are attending college now compared to in the past, this levels the job applicant field to some extent, making it more and more difficult to set yourself apart and above the crowd of other potential applicants.

Stephanie also mentions that there has been an increase in delinquency of student loans. This is very unfortunate but is a sign of the times. People used to be able to almost instantly get a job as a result of an education. This job would allow them to easily repay their student loans. With the difficulty of job acquisition almost constantly increasing, even highly educated persons are having more difficulty finding a job, and thus more loans are becoming delinquent.

I agree with Stephanie’s statements about the extended contraction phase of the US economy. Her explanation of fiscal and monetary policy is correct. Her statements about the government changing bankruptcy laws to allow people to discharge student debts under bankruptcy are plausible, but I personally feel as though this would be a bad course of action. I think that bankruptcy is an unreasonable provision to begin with, and lawmakers should not let people get away with paying back fewer debts. I think it could be reasonable to allow people to bankrupt away their student loans only if lawmakers forced people to not be able to bankrupt away some other debt. Student loans are an expression of people trying to make themselves better, and if it doesn’t work out perhaps they should be able to bankrupt them away, but they should then be forced to pay something else back. It is not fair or reasonable for people to be able to bankrupt away all of their debts. I very much agree with her statements about how taxpayers would be hurt if student debts become bankruptcy eligible.

President Obama’s proposal to forgive outstanding debt after 20 years is, in my opinion, completely ridiculous. If you borrow money, you should have to pay it back. However, if it came to a compromise, this would be better than allowing people to bankrupt out their student loans.

In Conclusion, the original article, as well as Stephanie’s evaluation were very interesting to read. It is amazing that student debt has become as large as it is. It would be unfortunate for taxpayers to be required to pay for more things that are, as I might put it, “not their problem,” but the country seems to be moving more and more in that direction with bailouts of banks and automakers.

blog post I critiqued: http://kassensecon122.blogspot.com/2011/11/indebted-ones.html

Greg Long - Critique

Greg Long – Critique on “A New Method to Save Our Economy”
Will Reitan does a good job of explaining how the economic times of today are different and more capable of turning the corner than the in the bank catastrophe in 2008. Instead of banks haphazardly loaning money out as they did during the economic boom, they are carefully analyzing their balance sheets and working with their reserves and available capital. I would not agree that bailing out the banks was a good idea but it did save people their entire fortunes. I would argue that bailing out corporations goes against everything that capitalism is. Capitalism states that the markets control supply and demand and if your business makes it then you get rich, if it does not make it then better luck next time. George Washington and Thomas Jefferson would be rolling in their graves if they knew how big our government has gotten. The entire foundation of the United States is on the individual and small government, only to help us in times of war and safety. Tax payers such as you and I should no way be paying for other people’s mistakes, which is literally what we have been doing since the Bush bailouts and now into the Obama madness. Government needs to take a huge step back and only act in times of war or great suffering. The markets need to work by themselves in order for this system to truly work. Government intervening is simply just playing sides, pitting one group against another. For this entire situation to be solved our government needs to stop spending and balance its books, keep the taxes low, cut everything except for national defense and let business thrive and our country grow until every single person here has a job, has food on their tables, and a roof over their heads. It in simply inexcusable for the strongest nation in the entire world to have thousands of people live without homes and children without food. Manufacturing needs desperately to return here, just ask the people of Martinsville and Danville. The only way that can happen is to have a business friendly atmosphere, free of taxes, regulations, and government intervention. Policy makers need to realize they are the problem and need to get up out of the way and let us be like what we were pre World War I at the least. I think the age of common sense has left us long ago.

Roanoke College Economics: Consumer Sentiment in Virginia-A joint venture

Roanoke College Economics: Consumer Sentiment in Virginia-A joint venture: Over the summer, Dr. Wilson, a Professor in the Public Affairs Department and Director of the Institute for Policy and Opinion Research, app...

America's Jobless

            After reading about a miner working in Australia making $200,000 a year, an unemployed chef from Virginia inquires about how to apply for such a job. Though he isn’t the only one, hundreds of others are also inquiring about the job. Most are mainly from the US, men and women, with and without kids. The question is, why exactly does this job seem so appealing even though it is a very tough job? As we have discussed in class, unemployment is a huge issues in the US. The majority of the people mentioned in this article are structurally unemployed. Mr. Salisbury, a chef unable to find a decent job, veterans just coming out of war not being able to find jobs in their own country, and a woman with a master’s degree in Arts stated “I have a master's degree in art but with this economy, that's like nothing." Even though people may have the talent and are qualified, in the current state of the economy that the US is in, finding a job is extremely hard, especially if that specific skill is not needed.

            Later in the article it states that even though so many people are interested in the job, the labor market in mining in Australia is still pretty low.  The employer needs to think about the cost of hiring new people and to transport them to Australia. Many people stated in the survey that they were willing to travel in order to provide funds to their family. What they failed to realize is that travel expenses includes a great deal of money that needs to be spent, not to mention the Visas that needed to be made for the travel. Even if they do get hired, it is not guaranteed that they will be making $200,000 a year. The person who makes $200,000 a year has been working there for over seven years and has seen many major accidents happened, and also has the experience to do the job without minding the hardship that comes along. Such a worker is hard to find and the employer does not want to spend a large amount of money on uncertainty. As we have learned, uncertainty plays a major role in Economics. Whether the economy is doing better or worse, the employer is afraid to lay off and have to risk the chance of needing to hire new people if the economy does change for the better. And the other extreme may also happen. The employer is uncertain that the economy will stay better and is then afraid to hire new employers just to risk having to fire them due to the economy going bad.

http://online.wsj.com/article/SB10001424052970204517204577046222233016362.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Tien Nguyen 

Unemployed Veterans

On Wednesday November 12, 2011, the House passed a bill to help unemployed veterans seeking jobs as well as federal contractors facing a new tax burden in 2013. Veterans feel more financial hardships than most U.S citizens because they find it difficult to find jobs after returning home from active duty. This is because most jobs are already occupied and the economy is suffering. Veterans risk their lives to fight for their country, but their own country does not help provide jobs in return. However, the new bill will do just that. The bill is fully paid for and would even reduce federal insufficiencies by $2 billion over the next decade, stimulating the suffering economy. The bill gives employers tax credits of up to $5,600 for hiring veterans who have been unemployed longer than six months and a tax credit of up to $9,600 for hiring long-unemployed disabled veterans. The October unemployment rate for veterans who left the military after 2001 was 12.1%, leaving about 240,000 veterans out of work. The bill will help reduce the unemployment rate and help create a positive reflection on the state of the business cycle. As for the tax credits for businesses, will cause business to invest more and help boost the economy. The tax credit may also cause the prices for goods to decrease because businesses will have more disposable money.

The bill will also provide education and jobs retraining program for unemployed veterans and it will create a project to help veterans to use their training to get licenses in different fields in the civilian work force. Improving education will provide businesses with more productive workers, in this case veterans. Businesses are more likely to hire well trained veterans to help use capital more effectively. By providing the veterans with a better education will most likely keep them in the United States to improve the economy instead of foreign countries.

The government will also redefine who is eligible for federal help under new health care reforms, making it more difficult for some to qualify for Medicaid or subsidized health care coverage. This will cause a higher demand for health insurance, helping insurance companies, causing people to spend more of their own money in the economy while providing the government with more money to help in other critical areas and programs to help boost the economy. The bill raises the threshold level to qualify for government help by including nontaxable Social Security benefits, as well as the taxable portion, as income. This will help increase the money supply in the economy. The White House has said it supports the bill because it would "reduce unemployment and ensure that our veterans leave the military with the tools they need to succeed in the civilian workforce."

http://money.cnn.com/2011/11/16/news/economy/unemployed_veterans/index.htm?iid=SF_E_Lead

Anouk van Gaalen

As new Graduates Return to Nest, Economy also Feels the Pain

(November 16, 2011, New York Times)

Currently there is a lot of uncertainty in the economy. Businesses are uncertain, consumers are uncertain and everyone is trying to get through this time the best as they possibly can economically. This usually means that people will hold back: consumers will not spend as much as they normally would, businesses will not hire new people very quickly and they will not make new big investments.     

A lot of students would normally start to find their own living area once they graduate: rent an apartment or buy a house and buy furniture, insurance, food, and a lot of other things you need to live by yourself. They create new households and therefore new expenditures for the market. But due to the crisis and the uncertainty the last couple of years the graduates are deciding more and more to move back home. The employment rate is really high again lately, which gives no perspective for the graduates. Companies are not very likely to hire them because they are dealing with the uncertainty as well and since the graduates barely have any experience they are not the first people in line to be hired. This means no income for the graduates and therefore hard to live by yourself. Moving back home seems the best decision.

But by moving back home instead of buying their own homes and furniture the economy “loses” a big part of the output of the economy. This means that the aggregate demand will decrease and the GDP will decrease, holding all else constant, since the expenditures of the graduates represent part of the Consumption in the definition of GDP (GDP = C+I+G+X).

The fact that the aggregate demand of the economy decreases results into a surplus in the economy, which will cause the aggregate supply to decrease as well. This means that the companies will produce less, which again means that they will need fewer employees to work for them. So by moving back home and not participating as expected in the economy the graduates are creating a vicious circle. They are moving back home, because they do not have the certainty of finding a job, but by moving back home the chances for them to get a job are even smaller.

If the economy does keep growing and new jobs are created even though the graduates decide to move back home and decrease part of the consumption it is likely that they will buy a home in the coming future, because most graduates do not want to live with their parents any longer than necessary.  

http://www.nytimes.com/2011/11/17/business/economy/as-graduates-move-back-home-economy-feels-the-pain.html?ref=business