The Free Enterprise System and Entitlement Programs

This week in Econ we learned about the American Free Enterprise System. We learned about the role the government plays in the economy, what makes a public good, taxes, and government spending.  We learned about the different types of government spending. There is mandatory spending which is required by law and discretionary spending which has to be approved each year. Mandatory spending makes up more than 50% of the government's spending.  Some things that fall under mandatory spending are entitlement programs. Entitlement programs are programs that are funded by our tax dollars to people who meet a certain requirement to receive them. Some examples of entitlement programs are medicare, medicaid, and social security. These are a big cost in the budget each year because there is a set amount that the government has to pay on them. I personally believe that the requirements to receive these entitlement programs and others like them should be revised and made more strict. These programs are putting to much strain on the budget. We have had a huge deficit with our budget for years. This is still relevant today because many people advocate that we get rid of social security, medicaid, and medicare all together. They do not realize how lengthy a process it would be to get rid off these programs or what damage it may cause. However, I do agree that these programs need some re-advisement.

Will Walmart Come to Town?

    This week in our econ class, we have been trying to decide whether or not Walmart will be able to open up in Weserville. Part of this decision included voting on what businesses would come to Weserville, writing a petition to Walmart, and holding a Town Hall meeting to discuss the decision about Walmart. We also watched a video about Walmart and how it affects small towns like Weserville. I think Walmart is beneficial in most towns. Ashland was the small town featured in the video. A lot of people in the town did not want the Walmart. They felt it would destroy the small businesses within their town much like the people of Weserville believe. However, I believe that Walmart is beneficial to the town in the long run. It would create more business and it helps employs many people. Even though the jobs do not have the best wages or conditions it offers jobs to people who would not be able to get a job elsewhere because they lack certain skills. Walmart is still a big issue for many people today. Many people are trying to bring back small town businesses in opposition to Walmart. Many people are trying to bring attention to the shortcomings of Walmart that need to be fixed. I think more action does need to be taken against Walmart in order for the business to improve. Walmart still is the largest employer and right now there is a rising unemployment rate. I think that Walmart would benefit any economy right now. The pros of Walmart outweighs the cons.

Obamacare

I read an article called Obamacare Sign-ups Jump to 3.3 Million by Tami Luhby on CNN Money from February 12, 2014. In the article she talks about how originally the estimated number of people to sign up in 2014 was 7 million but that it is only projected for 6 million now because the slew of difficulties with the website. She also gives an in-depth look at who it is that has signed up for Obamacare. About a quarter of the 3.3 million is people age 18-34 which is significantly lower than the 40% which was projected by the White House. It is important that younger people sign up because they tend to be healthier and would balance out the older and sicker people who enrolled. Obama’s administration has  increased its campaigning for enrollees and has geared their campaigns towards younger adults and minorities. I believe that Obamacare is a good idea because it tries to offer healthcare to those  who would not be able to get elsewhere. However, I believe that it goes against our free market economy and our democratic government. Obamacare is healthcare that  is run by the state. Before Obamacare, all healthcare was privatized.  In a free market economy businesses should be owned privately not by the government. Obamacare is healthcare owned by the government like it would be in a socialist or command economy.  The article addresses how 20% of the people signed up for the healthcare have not paid their premiums. The article also says how the majority of the people only bought the second tier insurance plan. This shows how most of the population cannot afford good healthcare. This raises questions about poverty in America. Many people are still without jobs and even those with jobs do not necessarily have healthcare. Obamacare seeks to provide everyone with a means to healthcare. 

Link to Article:

http://money.cnn.com/2014/02/12/news/economy/obamacare-exchanges/index.html?iid=SF_E_LN

Capitalism vs. Communism

This week in our personal finance and economics class, we learned about Karl Marx and Adam Smith. We learned about their viewpoints on how economies should be run. Karl Marx believed that social classes separated the poor from the rich and that the gap between the rich and poor would keep growing.  Marx believed that this would cause resentment in the lower class and cause the lower class to revolt. The social class system would be overthrown and everything would belong to the people. This means that the government would own everything and regulate everything. This would make everyone equal in the economy. Adam Smith believed in a free market economy. He believed that companies and businesses should control everything in the economy. He believed in laissez faire, which is that the government should have a very minimal role in the economy. He believed that the economy would regulate itself and be guided by "an invisible hand". He believed that a free market economy would create competition between producers and that this would force producers to make better goods and have better prices. Consumers would have the choice in what they want to buy, whom they want to buy from, and how much they are willing to spend. Individuals would always act in their own self interest. The economy would be balanced this way. I personally believe that Adam Smith's viewpoints are more correct. Overall throughout history, market economies work better than command economies. Countries with market economies tend to thrive better than countries with command economies. America for instance has a thriving economy with individually owned business that produce different goods. America has a market economy which creates more products and business than countries like North Korea that has a command economies. In recent years,  many countries have been switching from command economies to market economies. However, these countries still face many issues because of their past command economies. Russia is a prime example. The Sochi 2014 Winter Olympics begin February 6, 2014, but the Olympic City is not close to being ready or finish. Many of the hotels and buildings are not finished being built. You cannot drink the water from the city and the roads are not finished. This is due to the lack of funds that Russia has. They do not have the money or the manpower to finish the project and this is because their economy is still in transition.
Below is a link to an article about the problems in Sochi:  http://www.syracuse.com/news/index.ssf/2014/02/2014_winter_olympics_sochi_problems.html

Hey

Ani said "How was I supposed to know?".