Economic Issues Now!

Contents National Economics  Bank Deregulation It should be stopped

By Angela Myers

 Blowing the Bubble How the Housing Market Burst

By Nathan Stilwell

 Charter Schools Left to Fund for Themselves Public Alternative Education Faces Alternative and Inappropriate Methods of Government Financial Service

By Hank Stowers

 Corporations Effect on Local Economies How the Rising Power of America’s Corporations is Affecting Local Economies throughout the Country

By Lily Oswald

 Corruption Takes Shape A Look at Corruption in the United States

By Bryan Bauer

 Debt and Deficit In Fault and Default in America

By Sara Martin

 Hitting Home Unemployment hits Locals Hard and Drives up Rate of Poverty

By Carly Pierson

 How Much is Too Much?

The Debt May not be Owed to Who you Think

By Chad Brickey

 How Romney’s Tax Plan will Reduce the Debt If you Employ the 12% of Unemployed Americans you add more Taxpayers the will Contribute to Paying off the Debt

By Levi Anderson

 Income Inequality in the United States Why the American Dream is Harder Than Ever to Achieve

By Kyla Husted

 Letting Banks Off the Leash Why we Stopped Keeping Banks Accountable

By Caleb Darland

 Lobbyists Influence in the US Are Laws Written in the Interest of Society?

By Isabelle Tonso

 Maybe We Should All Go Live in the Woods Can We Actually Maintain a Stable Economy?

By Clara Gray-Stallings

 Take a Second Look Know the Facts about our Future in Tax Cuts

By Cayton Ferguson

 The Economy, America’s Weakness?

Is there a Solution to the US Debt Crisis?

By Johnathan Cannon

 The Greatest Meltdown Ever Sold How a Rumor Destroyed the Economy

By Seth Hoogeboom

 The Six-Pillar Plan Bring America Back to Life

By Elliot Saslow

 Too Many Homeless Houses Why did the US Housing Bubble Pop and what Might the Future hold for this Forlorn Market?

By Duke Millett

 United States Down Under Are we in the Direction for Surplus?

By Boone Grigsby

 Where the Recession Began What Do the Banks Do With Your Money?

By Addie Darling

 Without a Market Economy The Importance of the Market Economy

By Ryan Maloney

Global Economics  Greece in Free Fall What Caused, Was Effected, and Resulted from the Greek Economic Meltdown

By Jack Hewitt

 Outsourced and Out of Funds How Globalization is Killing Us

By Ginny Taylor

Contents  Outsourcing America’s Work Helping or Hurting the American Economy?

By Emma Donharl

 The Republican Ignorance Why the US Won’t Ratify the Kyoto Protocol

By Zachary Dowd

 Worldwide Economy Is Globalization Bad?

By Brock Ontiveros

 You Are Now Connected Economic Globalization

By Austin Rogers

substantially positive way and the country was on its way to recovery.

In January of 1981, President Ronald Reagan was elected into office. The Garn-St. Germain Depository Institutions Act was passed under President Reagan. This act eased bank regulations, which allowed loan to value rations for savings and loan banks.

Banks invested in many risky real estate ventures and deregulation, once again, became an issue for our economy. In 2008, the stock markets crashed and the economy was in trouble once again.

Bank Deregulation It should be stopped!

By: Angela M. Myers Deregulation is a major problem concerning our modern economy. Basically, deregulation is when banks do not have restrictions on what they spend, lend, or invest in stocks. When banks are not restricted to what they spend money on, it causes issues with the economy and the investors. This has caused a lot of problems throughout history and measures have been taken to fix the problem and measures have been taken away, for example, the Glass- Steagall Act of 1933 and the Garn-St. Germain Depository Institutions Act of 1981.

In the early 1900’s, there was no such thing as deregulation, simply because there was no regulation to begin with. The Great Depression was caused by a number of things, but the bad banking structure was a primary cause. The stock markets crashed and nearly 5,000 banks failed. The economy was in shambles.

President Theodore Roosevelt was then elected into office in 1933 and shortly after his election; the GlassSteagall Act was passed through congress. The act was designed to recover the economy. The Glass-Steagall Act prohibited the commercial banks from engaging in the investment business. This affected the economy in a

Bank Deregulation obviously has a negative impact on our economy and should be stopped. We must learn from the past history and enforce the Glass-Steagall Act once again. If it took us out of the economy rut during the Great Depression, then we should at least consider it.

Bank deregulation was a key factor in the crashing of the stock markets and we haven’t fully recovered since.

If there was regulation on bank spending, the country would be in a much better place than it is today.

Blowing the Bubble How the Housing Market Burst By: Nathan J. Stilwell In early 2006 the United States housing market reached an all-time high in terms of real-estate sales and homeownership rates. The real-estate market had been steadily increasing for the past decade due to a rapid growth in housing loans. A combination of risky practices in government policies and bank lending lead to a housing market bubble that eventually burst in 2006. If the government had not allowed these practices to occur, the housing market bubble would not have burst.

One of the largest contributors to the inflation were the poor lending practices of the banks. The government eliminated regulations on banks allowing them to

streamline the loan process offering very attractive mortgages. They offered Adjustable-rate Mortgages with initial, low interest rates that increased over time.

The combination of the low initial payments and accepting loan process made loans very attractive to most Americans. Everyone wanted to own a home, and now the banks were allowing everyone to own a home.

Home ownership rates skyrocketed from 64 percent in 1994 to 69.2 percent in 2004. Homeownership was suddenly an option for people that formally could not pay rent. During the first few years of the increase in homeownership the market was steadily increasing and interest rates were low. People were able to maintain their homes until the interest rates started rising and payments started to go up. This caused a record high amount of foreclosures and mortgage delinquencies.

As put by Robert Weissman, “Lenders duped borrowers into conditions they could not possibly satisfy…

Effective regulation of lending practices could have prevented the abusive loans, but none was to be found.” (2008) The lenders knew that there was little chance that most of the people they were lending to could repay their loans. The process was lucrative in attracting massive amounts of borrowers, but proved to be fatal when they could not repay their debts.

The government encouraged all American citizens to purchase property even though some could not afford the payments.

The government campaigned the benefits of homeownership to the citizens and encouraged everyone to buy. They overlooked the fact that most of these people could not maintain their assets, and allowed massive amounts of toxic assets to build up. According to Anna Swartz, a Research Associate at the National Bureau of Economic Research, “the government played a role in stimulating demand for houses by proselytizing the benefits of home ownership for the well-being of individuals and families.” (2009) Borrowers were allowed low rate mortgages and low initial down payments. They could put as little as 10 percent down on a house. This was a very achievable amount of money for most people to produce, but that did not mean that they could pay the rest of the mortgage with interest. Fannie May and Freddie Mac, government-sponsored enterprises, were pushed, “to increase their purchases of mortgages going to low- and moderate-income borrowers.”

(Swartz, 2009) In 1996, HUD, the department of Housing and Urban Development gave Fannie and Freddie clear directions to target borrowers below a certain income level. They knew that there were a vast amount of people in this income bracket that previously could not afford houses. The lenders assumed that many people would buy houses if given the opportunity. The government knew that high rates of lending could be very lucrative. Many political officials, investors, and bankers made a lot of money working the market in this way.

This crisis could have been avoided if the government had not allowed and encouraged these practices. There were reasons that the government regulated banks, and that was to keep them from partaking in risky monetary practices. There was relevance in an extensive, selective mortgage loan process. It kept people from

taking out loans that were impossible for them to pay back. The banks overlooked the fact that some of these people could not pay their loans, and they loaned money to them anyway. If greed had not taken over the housing market we would not be in this deep financial slum.

U.S. Charter Schools Left to Fund for Themselves Public alternative education faces alternative and inappropriate methods of government financial service, yet potential solution in sight

By Hank Stowers Charter schooling in the United States is a progressive and innovative new educational system that holds bright prospects for alternative learners. They provide engaging approaches to traditional curriculum, closer yet less divided peer groups, and more direct interaction between students and staff. However, many of these schools are facing a financial crisis that poses a threat to both their continuity and the opportunity they provide. There are a host of reasons for charter schools to be receiving strong funding, yet many are struggling to hold their doors open. This knowledge poses the question, “why are charter schools not receiving the funding they deserve, and how can this be changed?”

If one were to trace back the path in which charter schools are funded far enough, they would eventually come to a point of disconnect; a blank space in which the government tax money skips directly over charter schools and falls into the hands of larger, traditional public schools. In fact, charter schools receive an average of 22% less money per student than that of a public school.

A 2008 study even suggested that for every dollar of funding spent on a conventional public school student, only

62 cents are spent on a charter school student. This information is particularly startling, considering charters are funded on a “per Pupil” bases, and most charter school have less than half of the quantity of students than a traditional public school.

Despite this lack of financial comfortability, the general consensus across the political board is that Charters are an innovative and positive movement in U.S. Education.

Both Democrats and Republicans vocally support charter school funding. Yet the steady republican platform since 2004 has suggested tax cuts towards charter schools, and increased funding towards traditional education. The Democratic platform isn’t much better, showing no significant increase in tax flow towards charter schools since 2008. With neither major party increasing funding towards charter schools, it’s up to the alternative source of budget income: Donations and contributions through grants and private parties. In 2011, More than 10,000 of Animas High School’s budget surplus was received via a one night fundraiser hosted by the school. Isolated incidents like this are the main reason for continuation of many charter schools, and some, like Animas High School, have actually managed to maintain a budget surplus through these contributions. But when a school’s main source of income is the parents and other private benefactors in a local setting, a school’s budget can plummet in a matter of years.

With such a progressive manner of learning at such a high risk for complete collapse, we must ask ourselves,

“How can we stabilize this resource for education?”

The answer lies within a mandate of equalized funding for all public school students, no matter where they are educated, or how many students attend their school.

This is a simple system to initiate; by evaluating the amount of government money paid to public traditional schools (on a per student basis), we can adjust the funding of charter schools so that it meets that of conventional public schools. And where does this money come from? Amendment 64, and the taxed legalization of marijuana, which the state legislation has mandated would be used primarily to supply underfunded schools in our state.

Corporations’ Effect on Local Economies How the Rising Power of America’s Corporations Is Effecting Local Economies Throughout the Country By: Lily M. Oswald “In a small economy, even the smallest of big corporations can have serious effects on local markets.

As Durango grows as a community, it’s more important now than ever to realize that our decisions as consumers can decide the fate of our beloved “mom and pop shops.”

Expansion is a natural part of a growing economy; however, in a town that is so dependent on its local stores and retails, large corporations and chains are not necessarily the answer to a sound and sustainable local economy.

It’s important to continue supporting Durango’s local stores, feeding our economy. If we

don’t feed into this local economy, large corporations will seize the opportunity to create a sort of monopoly effect on our fragile economic system, putting local franchises out of business. Not only do large corporations alter the patterns of local economic systems, but they also tend to have negative effects on “mom and pop” stores.

Large corporations such as Wal-Mart or department stores, employ between 150-500 people, producing revenue that can be spent within the local or corporate economy depending on peoples’ personal choices of where they shop. According to Trent Hamm of Christian Science Monitor, on some of the factors leading to where people decide to shop, “It’s simply a matter of knowing and using a small handful of local stores, being patient, and hitting the good sales there hard.”

These choices are typically swayed by the prices that stores offer on their products along with accessibility to these products.

All too often these decisions consumers make on where to buy their products do not incorporate where the products were produced or who produced them.

Sustainable local economies are somewhat of an art form to maintain. Initially from the start-up of few local stores that satisfy the majority of the population of that town, much like Durango, these markets can blossom.

Some of the things that local economies strive to protect and nourish are the residents’ quality of life, as well as strengthening the quality of the environment.

These concepts are just some of the benefits a sound, local economy can be to a city.

When large corporations such as WalMart or Starbucks make their presence in a thriving town, the impacts can be irreversible.

The money that these corporate businesses make and

distribute to employees tend to stay within the circle of large corporations, creating a never ending cycle of a self-promoted system that doesn’t benefit the locally owned and run stores. “Corporate Power Facts and Stats” cites that, “of the 100 largest economies in the world, 51 are corporations; only 49 are countries.”

Whether or not people realize it, our local economy affects everyone. By changing a few frequent habits, people have the power to change the direction our current local economy is headed and strengthen Durango’s future economic system.

As a teenager, it’s pretty undeniable that coffee is becoming a bigger and bigger part of daily routine for many of us. From coffee brewed at home to specified, purchased coffee orders at coffee shops, the decision is ultimately up to us as the consumers. Durango Coffee Company and Durango Joe’s are two very successful, locally owned coffee shops. When Starbucks first came to Durango it was obvious competition for these shops.

If people continue to choose companies such as Starbucks for daily things as simple as overpriced coffee, they are not benefiting themselves in any way except maybe spending money on a complicated drink order that can be placed elsewhere. A more prominent example perhaps would be the effects of Wal-Mart on Durango and other small-town economies.

Wal-Mart is now the largest corporation in the world with over 10,000 operating locations, employing over 1.4 million associates in the U.S. alone. Currently in America, 96% of Americans live within a 20 mile distance from a Wal-Mart, further indicating why WalMart is such a popular corporation. As enticing as WalMart and its products can be, it is important to know why this “supercenter” can be so malicious to fragile economies. According to the article “The Economic Collapse,” “last year the U.S. trade deficit with China was the biggest trade deficit that one nation has had with another nation in the history of the world, and Wal-Mart played a huge role in that.” Local stores offer products that are similar or the same, yet slightly more expensive due to fair-trade policies that for the most part Wal-Mart does not partake in. In Salt Lake City, local shopping is becoming more and more marketable.

Nan Seymour, executive director of Local First Utah, states that, “overall, locally-owned, independent

businesses return 382 percent more dollars to Salt Lake City economy than chain retailers… Four times the amount of dollars stay in our community when you spend at a local business.” By supporting these local businesses, the payoff is evident with the money that cycles through our economy from costumer to provider and vise-versa.

Durango has historically been viewed as a town that benefits the people. From committed boards and commissions to its very active populace, Durango has the capabilities of keeping its beloved “mom and pop” shops alive and well for generations to come. From the shocking success of Mercury Payment Systems to Serious Texas BBQ, Durango is full of assorted businesses that offer almost all commodities that its citizens could want. Next time you crave a coffee or need to go grocery shopping, make the conscious decision to support a locally owned store versus the large corporations that are present in Durango. Not only will the money you spend directly support a balanced economic system in Durango, but also work towards establishing an environmentally-sound trading system, instead of going into the deep pockets of corporate CEO’s.

Corruption Takes Shape A Look at Corruption in the United States By: Bryan W. Bauer When you hear the word government what do you think of, democracy, equality, freedom? Yes I think of those also, but that’s not all I think of. I think of corruption and greed. Corruption in the United States is one of the most concerning issues in America today, and it has a huge impact on the American people. First of all, there are economic impacts that affect both the National Economy as well as an individual’s economic stability. The economy is not what it once was, with a large national deficit and a growing debt; this puts corruption at the forefront of today’s economic issues.

Two major components to corruption are greed and theft, and they are closely related. Greed is the most influential aspect of corruption in the US and is a major

driving factor of theft. Some American businessmen steal money from their own and others’ corporations.

This is mostly seen in fraudulent activity such as Ponzi schemes. Another huge aspect of corruption is erroneous government behavior. I will speak to all of these issues within this article.

To begin, the issue of greed is one of the most common in American society.

Unfortunately greed has flowed into government and business affairs. Greed is a large contributing factor to theft, money laundering and fraud. It has come to my attention that some, not all, wealthy businessmen in America, who are paid quite well, have a ridiculous sense of greed. I like to say the wealthy people aren’t “rich enough.” These greedy CEOs steal money from large corporations many times their own company. One famous case was committed by a Bernard “Bernie” Madoff, who participated in a Ponzi scheme. A Ponzi scheme is a type of fraudulent activity where the investment company pays the investor’s returns with their own money or with the money of other subsequent investors. Mr. Madoff had founded an investment firm on Wall Street that dealt in penny stocks since 1960. Authorities stated that the size of the fraud was approximately $65 billion. Now, one apple doesn’t always spoil the bunch, you can’t judge the entirety of American society by the actions of one greedy guy, but where there’s one there’s many.

These fraudulent activities have numerous economic effects including the loss of an individual’s investment money, which in turn de-stimulates the national economy, leaving long term fiscal effects. The US government cannot afford to have any number of businessmen stealing the American people’s hard earned money. Greed, theft and fraud are huge issues in the United States, have deep economic impacts, and need to be brought to the public’s attention.

Another form of corruption takes the shape in erroneous government behavior. This can include back door deals, bribery, partisan activities etc. One major

incident of this was in the passing of the PPACA (People’s Protection and Affordable Care Act), otherwise known as Obamacare. The passing of Obamacare is one of the worst instances of the corrupt practices by governmental figure the American people have ever seen. First of all, when Obama proposed the bill, there was absolutely no Republican support. All throughout the bill’s passage no Republican representative voted in acceptance of the bill. This is a complete disregard for the way the party system is designed to work. It would seem to me that you would need equal red and blue participation to pass such a bill.

This type of behavior is corrupt and unacceptable. The second reason the passage of Obamacare was corrupt, was that President Obama bribed it through. The bill was a few votes short of passing with all democratic votes in support. The President promised Senator Ben Nelson, of Nebraska, that he would cover Nebraska’s Medicaid cost if he would vote in favor of the bill. This bribe was enough to get the controversial bill passed through the senate. This is evidence that President Obama was only considering his own agenda and had no concern for the Republicans opinions, much less morality of passing a bill this way. There is still no republican support for the bill, most want to repeal Obamacare as quickly as possible.

The United States is one of the wealthiest countries in the world, but is also the most corrupt. It is important that we know what goes on in this country and the corrupt actions of the wealthy are no exception.

Corruption inevitably affects everyone as a whole.

Businessmen stealing from corporations have lasting effects on the economy and can crash corporations.

Governments pushing through legislation without bipartisan support or bribing it through, have drastic negative effects from the public eye and to the electorate. All of these things should be brought to the American public’s attention, as knowledge of the corrupt is the most effective way of snuffing it out. We

must, as humble Americans, put a stop to corruption immediately. Educate yourself so that you may be better informed and vote out corruption.

Hitting Home Unemployment hits locals hard and drives up rate of poverty

By Carly Pierson The recession that struck the United States at the end of 2007 affected everyone, especially those already struggling to keep their heads above water. Although we are all familiar with the struggle at different levels, many of us have seen and heard or even experienced what it’s like to struggle to find a job or to have to drastically cut down on household spending.

On December 27, 2009, The Durango Herald printed a piece on the recession: “It was worse in other places, but for many in the area, 2009 will be remembered as the year a recession was elevated to a higher degree. In La Plata County, foreclosure filings soared.

House prices fell.

Unemployment climbed. Student enrollment dropped as tuition increased. Local governments dealt with lopsided budgets, and the worst recession since the Great Depression undoubtedly affected the services they provide.” For those of you who are not familiar with the poverty brought on by the recession, welcome.

Let’s begin.

The recession officially began in 2007. People weren’t able to pay off their mortgages and had to face foreclosure. Banks suddenly restricted how much and

who they lent to because so many people were unable to pay back their loans. This made it more difficult for businesses to get loans, so to cut down on expenses, they began to cut jobs. Then, because of the lack of jobs, the people of the U.S. stopped spending as much, therefore driving businesses into a deeper hole and forcing them to cut back even more.

In my opinion, it all started with the deregulation process. The regulations put in place were to minimize bank failures because they were proposed to halt excessive risk-taking. When the Federal Reserve “reinterpreted” the Glass-Steagall Act of 1933 in 1986, they decided that banks were allowed to deal with more debt and equity securities and more investment banking operations. This also permitted the limit rule of total incomes in the investment banking business to go up from 5% to 25%. By this point, the Glass-Steagall Act was worth practically nothing because basically any institution would be able to stay within the 25% level. It was those unnecessary risks, in my opinion, that led us to the recession.

February 2009: 3.6 million jobs lost. July 2010: 7.9 million jobs lost. (money.cnn.com) The topmost unemployment rate stretched to 10.1%, or about 40 million people, in October 2009. (heritage.org) Recovery has been slow, and long-term unemployment is the highest since World War II. In fact, it has been described as the weakest recovery since the Great Depression.

With a decrease in jobs comes an increase of hunger and poverty. The Durango Food Bank gives out 8,00010,000 pounds of food a day, and there has been an 88% increase in families coming to the food bank and a

36% decrease in donations. Sarah Smith, director of the Durango Food Bank, said, “This is something that is a basic right to everyone. Everyone should be able to have food. We’re bare bones as it is, and this is definitely affecting us. With the huge increase in need and the significant drop in donations, we’re worried about how we will be able to sustain our financial obligations and keep the doors open.”

The most needed foods are always peanut butter, jelly, rice, and pasta. Since November of 2012, the Durango Food Bank has distributed 313,123 pounds of food, which adds up to 263,844 meals worth of food, 6,282 people, and 2,422 households. Volunteer Ruth West said, “It’s such a basic need and people are in trouble right now. It is growing every day. We are getting more and more families who’ve never come here.”

More than 6 million Americans have entered poverty because of the recession. Since 2007, the national poverty rate has gone up 1.9 percent, rising from 13.2 percent in 2008 to 14.3 percent in 2009. Latinos suffered the highest increase, from 23.3 percent to 25.3 percent. African-Americans saw a 1.1 percentage point increase in the poverty rates. Non-Hispanic whites experienced a smaller increase. As of 2009, there were 43.6 million people living in poverty. (citylimits.org) Sarah Hughes, quoted this year in The Durango Herald, noted that the 14% of Durango kids reported living below Federal Poverty Level – currently $22,350 for a family of four- is incorrect. “In reality,” said the article, “a family here needs nearly three times that figure – or about $60,000 – to cover basic needs such as housing, child care, health insurance, food and transportation.”

In The Kids Count study from the Annie E. Casey Foundation, it was revealed that the official child poverty rate increased by almost 20% from 2000 to 2009. In 2010, 11% of children lived with at least one unemployed parent. According to The Huffington Post, “The number of children under six living in poverty rose to 5.9 million in 2010 from 5.7 million in 2009, researchers from the Carsey Institute at the University of New Hampshire found. The ranks of American children in poverty have swelled by 2.6 million since the recession began.”

It has been found that 20% of all kids are living in poverty, and 25% of very young children are living in poverty. This is unhealthy for the children, because it has been found that kids who grow up in poverty have a greater likelihood of living in poverty when they are older, teen pregnancies, and becoming involved in criminal activities. They have a lesser chance to be employed and to reach their full potential. Care and Share Food Bank program director Jennifer Mariano said, “It [hunger] affects everything: Their cognitive abilities, developmental and psychological issues, the ability to concentrate, just to get up out of bed and move. No offense to the media, but hunger is a silent epidemic, and people find it hard to believe that it goes on in our own country and neighborhoods.”

Fortunately, things are looking up. As said on the federal web site Recovery.gov, “the American Recovery and Reinvestment Act of 2009 distributes funds in three ways. Since its enactment in February 2009, $776.4B has been paid out.” That’s $297.8 billion in tax benefits; $243.6 billion in contracts, grants, and loans; and $235 billion in entitlements throughout the nation. In Colorado, the total number of funds awarded reached $5,628,570,000 from February 2009 to June 2012.

The stimulus, which included government spending, state aide, social programs, and $288 billion in tax cuts, created or saved about 1 million jobs, 8,111 of them in Colorado. Closer to home in Southwest Colorado, there was a reported 82 jobs created through the federal stimulus bill of $63 million through mid-October, according to the Durango Herald. It seems that the goal creating or saving 3.5 million jobs by the end of next year is on its way to be a reality.

There are programs springing up all over the nation to help people get enough food. Farmers and growers who have a surplus of fresh vegetables are donating them to food banks, and kids are being sent home on Fridays with backpacks full of food to have enough to eat over the weekend. Here in Durango, Animas Valley is sending home 20 backpacks on Fridays, with Needham and Riverview Elementary schools preparing to start their own backpack programs soon. There is a program that partners with the Manna Soup Kitchen that gives

lunches to about 15 students at Big Picture for the weekend, too.

Our nation is coming together to help those who are hungry. Though we are healing slowly, we are seeing more and more jobs come about. There is still a ways to go, but by the looks of things, we are on our way.

How Much Is Too Much?

The debt may not be owed to who you think.

By: Chad Brickey

This nation’s debt is a growing problem, and will not get any better until we figure out a way to manage it. The debt is currently up over $16 trillion. The debt climbed by $4.899 trillion during the two terms of George W. Bush’s presidency, and has now gone up by $4.939 trillion since President Barack Obama took office.

Obama was quick to blame his predecessor for the soaring Debt, saying Bush paid for two wars and a Medicare prescription drug program with borrowed funds. With the debt being so high, it is equivalent to each American citizen owing about $50,000.

The reason our debt is so high is because the government is spending more money than they are bringing in. This results in borrowing money from other countries as well as our own. That’s right, two thirds of our national debt belongs to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. Just under $5

trillion of the national debt is owed to the Social Security Trust Fund and federal pension systems. It turns out that China, the country that holds more of our debt than any other country, only really holds less than eight percent of it. China actually decreased its holdings of the debt over the past year from $1.31 trillion to $1.16 trillion.

Many politicians have very different views on how to lower the debt and start building a surplus. Each wants to cut spending in different areas, some want to raise taxes, others think it’s possible to do so without raising taxes and maybe even cutting taxes. On the website, moneycrashers.com, there were a number of different replies as to how to fix the debt.

One answer was, “Yes, we need to raise taxes. No one wants to hear that but it must be done.

Yes, we need to cut services. No one knows which ones. Yes, we need to fix Social Security, Medicare, but how? It is time for our elected officials to sit down and do what is right for the country, not what is right for reelection. I'm tired of hearing about the next election. I voted a person in to do a job, not run for office once he is two years into the job. If you do the job right, you will be reelected.” Another answer was, “Spending cuts need to start at the TOP. The White House to the President and on down, they are making way too much money cut out all frivolous spending the citizens of the US probably have no idea what "OUR" tax dollars are being wasted on every single day.” So there is a number of different ways to help lower the debt, our government just has to dig deep and bite the bullet on things that we may not want to do.

Our nation needs to get out of this debt and back into a surplus, where we’re bringing in more money than we’re spending. By 2019 the debt is projected to reach over $25 trillion. Our debt is getting out of hand and hurting us, as well as all of our future generations to come.

How Romney’s Tax Plan will Reduce Debt If you employ 12% of unemployed Americans you add more taxpayers that will contribute to paying off debt.

By Levi Andersen Our national debt is exceeding 16 trillion dollars. At the current rate it comes out to about $4 billion per day, $170 million per hour, $2.8 million per minute and more than $47,000 per second. If we want to remain the strongest and most prosperous country in the world, we must get it under control. Think about how personal debt affects families. If they have this huge debt tying them down, they are not able to improve the quality of their living. The same goes for the national debt; we cannot grow with a 16 trillion dollar debt. Debt can either be a good thing or a bad thing. In the world of business, debt can be a valuable tool that is the key to success. If I were to start a business and didn’t have the money, I’d get into debt in an attempt to spark success. The United States did the same thing. During the recession in attempt to spark economic growth, we have looked to other countries for support. Unfortunately, the economy keeps sinking leaving us with an astonishing amount of debt we cannot pay back. Barack Obama was handed a tough situation, and many people voted for Obama because they thought he could bring hope and change to our country. But unfortunately, the light at the end of the tunnel is disappearing. America needs a stellar businessman that can get the job done.

The national deficit plays a huge roll in deciding whether or not we can take control of this national debt crisis. Mitt Romney plans on creating more jobs and adding more people into the work force that are paying

taxes. If you have 12 percent of the population unemployed, you have 12 percent of the population paying no taxes. How do you create more jobs? What our generation needs to focus on is championing small businesses. Businesses are who we can thank for even having a country. The last thing we should be doing is placing our national problems on the shoulders of the providers. As Romney said in a campaign rally, “Private Sector job creators are the people we can thank for jobs.

Not the Government.” The small businesses of our nation currently pay 35 percent in income tax (which is the same as individual income taxes). Romney has promised to lower that rate to 25 percent.

How do you do this without exploding the deficit? With the current policies in place, loopholes and deductions apply most to the wealthy and are untaxed. In order to do this, we must raise taxes on other people to make up for the amount of money the government puts out for free loopholes and deductions to the wealthy. If we eliminate untaxed income, we can lower taxes for everyone without hurting the rich and we can benefit the poor and middle class at the same time. Obama said that loopholes and deductions would not fully cover the amount of revenue lost from the tax cuts. This may be true, but you have to look at how it will improve the economy, which would give more revenue to the government. It also allows you to lower taxes on small businesses. My father is an owner of AJ Construction. If he could pay less in taxes he would have more money to employ more people and grow his business. Being said, Romney will not increase the tax rate on corporations that pay little to no income taxes because they employ the majority of our population. In life, I believe that you cannot get more than you give.

The reason we are in this much debt is because we are spending more than we are taking in. So the first thing

we need to do is stop raising the debt ceiling and spending. In a 2010 speech Obama said, “We will raise the debt ceiling, always have and always will.” We need to stop raising it and focus on working towards a balanced budget. Under Mitt Romney and Paul Ryan’s plan, they will eliminate all programs funded by the government that are only kept alive because we borrow money from China. Romney has not made clear which programs other than PBS. But this is reasonable because the programs we will cut have yet to be decided. WE must stop spending more than we take in.

One of my father’s good friends is a self-made millionaire by investing in stocks and startup companies. Without noble people like himself, we would have fewer companies employing men and women in the private sector. He went from living in a one-bedroom apartment with his wife using a cardboard box as a dining room table to living in multimillion dollar homes. He had a dream and struggled his way to the top. It’s a beautiful and inspiring story. In life, I strongly believe that you cannot get more than you give. Looking at all the ways he has contributed to our economy is remarkable. But unfortunately, under the current policies set in place by Obama and a hurt struggling economy, he has relocated his assets, focus and money to Canada because he can no longer obtain the same level of success in the United States of America for a number of reasons (with increasing taxes being one of them). President Obama makes his plan seem like he will only be taxing the ultra-wealthy, such as Bill Gates, Warren Buffett and Donald Trump. But this tax plan would hit around a million of the nation’s top businesses that employ a large percentage of our population. A recent report came out that the Koch industry and many of America’s top CEOs sent letters to all their employees saying that if Obama is re-elected then they will have to lay off many of their employees.

Obama simply does not understand the struggles that successful businessmen and women have gone through.

In a 2010 speech, Obama said “If you are successful, you did not get there on your own. Someone else did that for you.” Obama does know the first thing about creating a business. Try telling that statement to my dad and his successful friend that moved to Canada. Who do you think better understands jobs? Obama or the job creators?

Mitt Romney and Paul Ryan have promised to eliminate untaxed deductions and credits. Doing so will make the tax system more fair, because you are giving the rich less money in deductions and credits allows room to lower taxes across the board because the government will have more money. I look at America as one large business. Romney knows what it takes to have a successful business and has been doing it his whole life.

Obama has not. Creating a strong middle is the single most important thing. If you lower taxes on them they have more money to spend on improving the economy.

Under Romney’s plan, lowering the corporate tax rate will allow for them to hire more people that pay into the tax system to lower the deficit. In a struggling economy you must never increase taxes but spark economic growth that will get more people working that are increasing the government’s revenue. When deciding whom to support, you need to look at both candidate’s records and what they have done in their time in office. We had a debt of 10 trillion in 2008 and Obama promised to cut that number in half.

Unfortunately, it has increased by 6 trillion dollars. In a recent television ad President Obama stated that since he took office in 2008, 5.2 million jobs have been created. All the fact check websites said the number is actually only around 300,000. America needs a stellar business man who understands jobs and the economy to get this country on track.

Income Inequality in the United States Why the American Dream is harder than ever to achieve.

By Kyla Husted Since the turn of the twenty-first century income inequality in the United States has been rising.

According to the Economic Policy Institute between the years 2000 and 2007 all of the income growth in the United States went to the top 10 percent. The average income for the bottom 10 percent actually declined. In

2008 the average income of the top 10 percent of Americans was nearly 15 times higher than the bottom 10 percent. This is quite disheartening when looking back at the twentieth century, during which the bottom 90 percent claimed most of the income growth. Why has income inequality in the United States become such a big issue in the last few decades?

Recent studies by the National Bureau of Economic Research and the Organization for Economic Cooperation and Development have provided several explanations for the rising income inequality in the United States. According to the OECD technological improvements can shoulder some of the blame because they have lead to higher wage differentials, as advances in technology have largely benefitted high skill workers over low skill workers. The OECD also lists societal change as a cause for widening inequality in wages and income. More single parents and single person households account for the inequality in household earnings. The NBER study supplies more causes of income inequality, the causes listed are many and complex. For example changes in life expectancy, geographical location, tax cuts and an unequal rise in price deflators. The unequal rise in price deflators is perhaps the easiest explanation to understand and is both a cause and a result. It has lead to the decline of the middle class aided by big box stores like Wal-Mart and has added to the increasing income inequality.

As Americans improve their standard of living by acquiring more possessions, even when they cannot afford them, stores such as Wal-Mart arrive to supply low earning families with low cost goods. A 2003 study by Hausman and Leibtag showed that the appearance of a Wal-Mart in an area actually reduces the cost of food by 25%. Wal-Mart provides goods at very low prices, which forces local businesses to lower prices as well and often to go out of business. This harms middle class families as big corporations kill their businesses and in order to uphold their standards of living they are

forced to support the culprits and stoop to the lower level by shopping at low cost stores, only increasing the gap between them and the wealthy. On the other end, high earning families invest in much more expensive goods and services. The services required by high-end spenders tend to increase in price because of rising wages and constant productivity in areas such as spas, private schools, fancy restaurants, gardeners, etc. The changes in costs of goods greatly contribute to income disparity in the Unites States.

The Organization for Economic Cooperation and Development has listed the most equal countries in income distribution in the world as Denmark, Sweden and Norway. The OECD measures income inequality using the Gini coefficient. The Gini coefficient measures the degree of concentration in a county’s income distribution. A Gini of 0 represents a situation where everyone receives exactly the same income, while a Gini of 100 represents a situation where only one person receives all of the country’s income and everyone else gets nothing at all. There are several different Gini coefficients calculated for the US. The Census Bureau lists the official Gini coefficient for the US as 46.9 while according to the OECD it’s 37.0. Both numbers are dismal and place the US near the bottom of the 18 developed countries that have available data. Only Chile

has worse data than the Unites States.

The current Occupy Wall Street movement has been fighting against just this for the past year. The Occupy movement is said to be the 99% against the 1% protesting against all the injustices of our government and the lack of income equality in America. A message published by the Occupy movement in 2011 provides a list of demands, including: ending wealth inequality, joblessness, poverty, corporate censorship, and political corruption. Occupy Wall Street aims to bring attention to many of the issues facing our country today and demands that change be made by the government.

Income inequality is a very big issue; it is incredibly unjust that the top 10% holds the majority of the wealth of this country. The American dream that you can start with little and rise to the top is fading as more people become stuck in poverty while the wealthy control the country and all of its money.

Letting Banks off the Leash Why we stopped keeping banks accountable By: Caleb Darland On November 12, 1999 Bill Clinton signed into law the Gramm-Leach-Bliley Act, dissolving any remaining regulation from the GlassStegall Act passed in 1933. The regulations were put in place after the Great Depression struck America, in order to get banks back on the right track.

Those regulations kept banks honest and open with the public and got us through the remainder of the 20th century.

As time went on, banks grew tired of the strict parameters governing their every move because they saw a chance to increase their returns astronomically. Seeing the same opportunity, the government released the banks, putting in place soft

guidelines that gave the banks much more leeway.

Everything was smooth sailing until 2008 when the stock market dove dramatically. We had removed the safety net keeping America's economy stable, and couldn't put it back.

After Black Tuesday in October of 1929 America's stock market was in shambles, and the banks were next. As the price for stocks were falling, people went and pulled their money out while they could still get something for their investments. There were lines out of the banks full of customers wanting cash for their deposits. The problem was banks didn’t have cash in their safes to back up deposits; they had the money invested in the market that just collapsed. Unable to produce the money they should've had, over 8,000 banks closed their doors. In the wake of all this, a solution was created. There needed to be a one-time bailout to get everyone back on their feet, then banks needed to be federally accountable for the money in their accounts.

The Glass-Stegall Act was the solution, put in place to prevent this from ever happening again.

The act was the product of two senators who saw a need for regulation. It separated banks into two divisions: high risk loaning/investment banks, and depository banks. A depository bank would be a basic bank that people used to safely save up money through checking or savings accounts. High risk loaning and investment banks took chances with their customers money in an attempt to make a profit off of it. They wanted to differentiate between the two so people could have a greater sense of security in their bank.

Another safety measure put in place was the Federal Deposit Insurance Corporation (FDIC). As you can see from the title, this was a federal entity that insured deposits in banks.

These regulations and programs put in place helped gain the trust from the American people, and helped the United States recover from the depression. Our economy continued to grow

from the late 30's all the way to the early 80's, when we decided to begin dismantling the Glass-Stegall Act. Beginning in 1979, legislation began to flow through Washington that slowly removed regulation, piece by piece. By 1998 most of the original legislation put in place by the Glass-Stegall had been taken away, and only a few aspects from the original act still remained to be repealed when President Clinton signed the GrammLeach-Bliley Act in 1999. This act simply dissolved any remaining regulations from the Glass-Stegall Act. The divisions that once stood between investment and depository banks were completely gone, and banks could now invest up to 90% of their customers money.

They were only required to have 10% of their accounts in solid assets, an amount that could hardly keep what happened in '33 from happening again.

Surprisingly, America was in a very good place after the Gramm-Leach-Bliley Act was signed into law. The banks were getting large returns on their extremely large investments, in turn they could make more large -potentially high risk -loans, so people could buy a lot of things and dump money into the economy.

We were doing great, but all it took was a slip in the system for everything to come crashing down, and that occurred in 2008. It came when a rumor was created about one of the investment giants in the stock market, and everyone pulled out their money. The company was involved with an astronomical amount of high risk loans that were tied to multiple companies. So, when that one company failed, all the other companies it was tied to took a major hit, and the domino effect had begun.

Deregulating banks looked like a good idea, and was very profitable for a few years, but it created a very delicate economic base. That base ended up breaking

because of one false step. We can’t go back and undo all the deregulation; we're stuck with our current situation. Now we have to take action, like the government did after the Great Depression and get America back on the path to success. Regulations like those administered by the Glas-Stegall Act would be a good place to start, but need to be tailored to fit the 21st century. Because we have deregulated already, going all the way back to the old regulations would result in companies having to break up or completely dissolve certain branches. The process of re-regulating banks would be difficult for the large banks that sprang up during the period of deregulation, but if these companies want to get America back on the right track they need to give a little.

Lobbyists Influence in the U.S. Are laws written in the interest of society?

By Isabelle Tonso Imagine you just got your license and you want a car.

You go to your parents and you begin to tell them why you should have a car, how responsible you are, how you plan to pay for gas, why it would make it easier for everyone if you had your own car, the driving record you have, and how you will use the car to help out your parents.

What you are doing is called lobbying. You are persuading your parents to do something in your favor and you are telling them what you will do for them if they make this purchase. In Washington, a lobbyist may approach a lawmaker and take them to dinner or pay them and try to persuade them to pass a law in the favor of the business or individual they are lobbying for.

So what is the problem with lobbying? According to an interview with Tom Hartman, entitled What is the Problem with Political lobbying?, lobbying represents an ancient form of European government called Feudalism.

Essentially, corporate lobbyists are writing a majority of the legislation in the United States. It may not seem like a big deal, but consider the fact that lobbyists are able to influence decisions in favor of big corporate companies, instead of for the people, even though the government is supposed to be in place for the people.

Political and corporate lobbying does not directly benefit the people. It does not benefit the people to have corporate lobbyists influencing and writing the legislation in the corporations’ favor.

According to the Center for Responsive Politics, in 2011 there were 12, 714 lobbyists in the U.S. and the total amount of money that was spent on lobbying was 3.33 million dollars. In 2011, the top lobbyists in Maryland earned $1,232,000. The problem with this system is that they earn millions of dollars to make laws that, for the most part, do no benefit the people at all. Going back to the idea of feudalism, lobbyists get paid millions of dollars to essentially write laws in legislation that do not benefit the majority of people in the United States.

Not every type of lobbying should be considered bad; some lobbyists actually have the intention of helping to better informing lawmakers about current situations.

Agricultural lobbyists understand agriculture and can speak to lawmakers about a specific law as it pertains to their industry. After September 11, 2001, the NRA (National Rifle Association) supported proposals to arm every airline pilot with a gun. Between 2001 and 2010, the NRA spent 1.5 to 2.7 million dollars lobbying in order to create “safer air traveling.” Let’s talk about a lobbyist that is closer to home, our Head of School, Michael Ackerman. Our Head of School lobbies with companies in Durango and Washington D.C. to get them to support charter schools. The particular intention with this lobbying is to get these businesses to support Animas High School.

Let’s talk possible solutions to our current lobbying situation. Political lobbying should be against the law, to ensure that the people’s needs are being met.

Politicians found to be involved with lobbying should be

taken out of office, and lobbyists found to be involved with politicians should be forced to pay a fine and possibly face jail time. All lobbying is legal, but it’s some lobbyists’ methods that should illegal. What is at the heart of this issue is the lobbyists’ intention. The difference between legal and illegal lobbying should be measured by the lobbyists’ intentions. If a lobbyist’s intention is to benefit the greater good of the people it should be legal as opposed to big businesses and corporations with the intention of making a profit. It’s time to get the government back to standing for the people. It’s time for the people in legislation to start doing their jobs and writing laws. Now is when we should stop the trend of the poor getting poorer and the rich getting richer.

Maybe We Should All Go Live in the Woods Can we actually maintain a stable economy?

By Clara Gray-Stallings Everyone in the United States has complaints about the economy. Americans are always expressing their views and critiques on poverty rate, debt, and the lack of jobs, and politicians are constantly trying to appeal to this issue by proposing new solutions which end up failing for one reason or another. Even when the economy is in good condition (like during the Clinton Administration, when the budget of the US economy was $290 billion, according to procon.org), it doesn’t seem to be maintained for long. With all of the politics and conflict surrounding our economy, is it really worth the fight?

The common question is “What can we do to fix the economy?” But maybe we should be asking “What can we do instead of an economy?” and “Are we capable of permanently succeeding in capitalism?”

Like the current recession, there have been scattered instances throughout history when the market crashes and the economy must be completely rebuilt. The Great Depression is a valid example of an instance where the economy slid down the drain. And today, we face the same sort of issue again. We all agree that our economy

is a mess and corrupt politicians from both sides are doing everything they can to convince the nation that they can fix the economy. But are politicians really necessary?

What if, under some circumstance, we didn’t need those politicians OR the economy?

Human beings have not always revolved around money. Long before we had a capitalist economy, there were many small communities based around trade without currency. And before that, we were hunters and gatherers. Although hunters and gatherers had a more primitive way of life, there was NO economy to worry about. Money wasn’t an issue. There are still a few communities left who practice that lifestyle, particularly in remote areas of Africa and South America. If we want to eliminate economic issues entirely, we must move backwards in the development of society.

Of course, the idea of eliminating the economy is very abstract to most Americans today, and it may be challenging to grasp. And because there are so many people who live in conditions where they cannot sustain themselves without trade and/or some sort of currency, abruptly ending every economy would be a difficult and unrealistic step to take. But if we were to rid the world of capitalism and form very small regional economies based primarily on trade within the region, it could be one temporary solution as well as a stepping stone to eliminating the idea of a formal economy completely.

Society today is so focused on advancing in every possible way, but have we proven thus far that we can keep up with ourselves? Our past failed attempts at capitalism have indicated otherwise.

Because all we know is a country with an economy, this idea could be controversial. But the reason I propose such a solution is that the economy is always “The Problem.” We, as modern day American citizens, cling to this idea of a capitalist economy. We believe that it is the only way to live now, despite the corruption of the system. To bring about change, we must detach ourselves from the old truth. “If you cling to something as absolute truth and are caught in it, when truth comes in person and knocks on your door, you will refuse to let it in.” (-Buddha) Opening yourself to a “new truth” goes hand in hand with ending the expectation of a stable economy.

Once the expectation no longer exists, we can move forward to change and forward to the past.

Take a Second Look Know the facts about the future of tax cuts By: Cayton Ferguson We all know the economy is going downhill fast, and both President Obama and his electoral opponent Governor Romney have a plan for how they want to go about decreasing the deficit. One way they want to help is by creating jobs, and dealing with the tax payments for the rich. Governor Romney wants to give the rich a tax break so they can start creating jobs and hiring the lower and middle class. President Obama wants to raise taxes on the upper class to help the lower and middle class. Both sound like good ideas, but whose idea is better for the economy?

Governor Romney wants to cut taxes for the rich (people who own and operate very successful businesses like Apple and Dell), hopefully allowing the rich to create jobs and hire people from the lower and middle class. We as a society need jobs so isn’t this the way to go? With

more jobs, the economy will grow and less people will be unemployed. Well that's good right? It will decrease the deficit and get Americans working again! Wrong.

What’s stopping the rich business owners from shipping jobs overseas like they are now? Nothing really.

Romney’s plan cannot limit where they ship and hire, so why would they pass up the opportunity for cheap labor? Would business owners pass up making more money to help the middle and lower class?

decrease taxes on those that need their money the most. Romney’s plan is good, but Obama’s plan makes more sense.

“During Wednesday’s presidential debate, Mitt Romney repeatedly promised to ‘lower taxes on middle-income families’ without reducing ‘the share paid by high-income individuals.’ But this combination will prove difficult, if not impossible, for the Republican candidate to deliver given the other elements of his tax reform plan — especially his illogical definition of ‘middle-income families.’”

Obama seems to think otherwise. Obama wants to tax the upper class a bit more and make sure a case like John D. Rockefeller. He was accused of finding ways to wiggle his way out of taxes so his abundance of wealth could continue to grow unhindered. He once said, “I have ways of making money that you know nothing of,” which could be taken as him admitting that he cut taxes. But Obama wants to ensure that the upper class isn’t going to evade paying in ways, such as, using tax deductions and donations to lower how much they pay.

“President Obama cut taxes for every working American, and is fighting to keep taxes for middleclass families low. Now, he’s working to simplify the tax code while asking millionaires and billionaires to pay their fair share.”

Makes sense right? Foolproof plan? Wrong. How do we know when the upper class starts and middle class ends? Is is a dollar amount? How do we keep tabs on people paying what they need are required to pay?

There are so many variables involved with the policy, it makes my head hurt.

Personally, I had a hard time figuring out which policy made more sense to me. In the end, what wins me over is the plans for taxes. I mean, everyone wants less taxes, but it’s not feasible with the amount of national debt we have and how much it takes to just run the government. Obama’s financial plan will be more effective because it is realistic, efficient, and sound. The plan will decrease the amount of jobs shipped overseas, increase the revenue brought into the government, and

Is the Economy America’s Weakness?

Is There a Solution to the U.S Debt Cr isis?

By Johnathan Cannon The United States of America is currently facing the biggest debt crisis not only in the world, but of all time.

We are currently over 16 trillion dollars in debt, and that number is only getting bigger. To give you an idea of exactly how big that number is if we were to divide the deficit between every U.S. citizen to pay off, we would each owe roughly $51,000.

What happens if we don’t pay off this debt? Well, there are two options. The first option is to keep borrowing money until no one will loan us money, at which point we just don’t spend money we don’t have. The other is to default on our debt; this is where we basically tell everyone “Sorry, we can’t pay for debts” and reset to zero. The downside to defaulting on our debt is that other countries are a lot less willing to lend to us, and if they do, interest rates are much higher. Countries usually do this when their debt to gross domestic production or GDP ratio hits over 90%. The United

States current debt to GDP ratio is 104.93%, meaning our debt is greater than the amount of revenue that we are generating per year.

Why do we get to have this huge debt without any noticeable consequences that would be apparent if other countries had our debt? First, our credit rating was downgraded a few years ago from an AAA rating to AA+, meaning that we are not as trustworthy as we could be about paying our debts back. The lower the score, the higher the risk that the nation who lent you money won’t get it back. Thus, a country will be less willing to lend to you. This should have made the interest on our loans more expensive, but here’s the thing: it’s gotten cheaper. While we have a huge deficit, our debt still seems safer than a lot of countries’ debt.

So if you’re a foreign county, you want to lend money to which ever country is most likely to pay you back.

Countries aren’t going to raise interest rates on us or we would not take a loan from them; not to mention our debt, while not that secure, is a lot more secure than most counties. It’s also important to countries like China, who exports many goods, that the counties that buy their goods stay somewhat economically stable so they will to continue to buy their products. This is probably why over 50% of our foreign debt is held by China.

How do we decrease the deficit? There are a few suggestions offered, the first favored by Democrats is to raise taxes on the upper class and to do some cuts across the board in spending.

Republicans want to reduce taxes with the idea that more people will spend more, causing the economy to generate more. They also want to drastically cut certain programs. Both plans have their merits but the problem is actually getting Congress to pass and implement a plan.

So is America too big to succeed? No, we have feasible solutions to our debt crisis and not all hope is lost.

However, we must act quickly in order to get our debt

under control and headed back in the right direction or it will get harder and harder to pay off our debt.

The Greatest Meltdown Ever Sold How A Rumor Destroyed The Economy

By Seth Hoogeboom When the Financial Meltdown of 2008 was over, many people spent many long hours trying to figure out what happened. Everyone was in a daze. How could this happen? How could the world's biggest economy come to a screeching halt practically overnight? Believe it or not, the worst financial crisis of our lifetime started with a single rumor that revealed that our economy was running on borrowed time, and it all started with CNBC. If you've ever experienced the trading floor of the New York Stock Exchange, you know right away that it's one of the most uninviting rooms you'll ever set foot in.

Hundreds of people all staring at screens, either reading the news or watching the latest business reports on one of the many televisions spread across the room.

The television network of choice to watch while on the trading floor is CNBC. People will make their decisions based on what shows up on the news ticker scrolling across the bottom of the screen. People were already on edge because the housing market had burst a few months ago. One day, a headline popped up on this ticker questioning Bear Stearns financial situation. The rumor was unfounded. Bear Stearns had more than enough money, $18 billion in cash reserves. But Bear Stearns had another problem. They had invested their money in sub-prime mortgages; they were giving loans

to people who could not pay them back. Those toxic assets sent their stock plummeting. The company started losing their savings quickly. The top executives in Bear Stearns met with top officials in the government to try and figure out what to do about the failing company. Several options were considered, from merging Bear Stearns with another company, Bankruptcy protection, or nationalization. After much deliberation Bear Stearns finally came to an agreement with J.P. Morgan Chase to acquire the failing company for a measly $2 a share. Far below what the stock was worth. Bear Stearns was gone.

The next banks to start having trouble were Freddie Mac and Fannie Mae, two of the largest loan modification companies in the United States. Like Bear Stearns, both Freddie and Fannie had had given out sub-prime mortgages, which are mortgages given to people that cannot pay them back. But they also insured Bear Stearns, promising to pay if if Bear were to ever go out of business with the idea that they would never go out of business. Then Bear Stearns went out of business and everything falls apart. Both companies started looking for options, including a buyout like what happened to Bear Stearns. Then the federal government suggested something they knew would be unpopular with the public, but would help save the collapsing economy: nationalization. The government would take over control of Fannie Mae and Freddie Mac. And that’s exactly what they did. The government would also take control of AIG when their financial situation became troublesome, too. Lehman Brothers would be the final bank to fail before the credit markets completely froze and the economy would literally grind to a halt.

So what caused all this? Most people blame deregulation of the financial sector, among other reasons, as the main cause. 30+ years ago if you tried to get a loan from a bank, your entire credit history would get searched fairly thoroughly before the bank would actually give you a loan or a mortgage to make sure you could actually pay for the loan or mortgage you are asking for. By 2005, banks were giving them away in cereal boxes and Happy Meals. There are so many different theories about why these banks failed that no

one can really decide, although deregulation is the one most pundits on the political left will jump too.

The Six-Pillar Plan Bring America Back to Life By: Elliott Saslow I was recently listening to a Planet Money podcast (Episode #387) on my iPod and found it extremely interesting. It described an economic plan that was created by democratic and republican economists. It was a six pillar plan that, although it would initially seem that it wouldn’t work or be a useful platform, I did more research to find out if the claims they made were legitimate. I believe that with this plan, America would jumpstart to a huge economy.

Pillar 1: Remove Mortgage Interest Deduction The Mortgage Interest Deduction is a deduction from one’s taxable income based on their current mortgage.

Other developed countries like France and Canada do not have a similar Mortgage deduction and in 2007, France decided that the mortgage interest deduction could create a tax advantage that surpassed the goal of making more people homeowners. In the case of the United States, we created a system that encourages buying more expensive homes to allow for a larger tax break. Mitt Romney proposed removing this tax break before the first debate.

Pillar 2: More Restrictive Medical Care One of the many reasons that healthcare is unaffordable is that some Americans have an excess of health care. Unnecessary procedures are provided to patients and it is raising the prices on healthcare across the board. This quote is from Americans Get Too Much Healthcare, Their Docs Say; “That could mean ordering more tests, prescribing more drugs or diagnosing people with diseases, although they would never have experienced any symptoms.” By making health care more restrictive, less money will be wasted and some of the savings will be passed onto the others in need.

Pillars 3 and 4: Eliminate the Corporate Tax and Income Tax Taxes can incentivize Americans to participate in different parts of the economy (e.g. tax breaks for college), but in this case should we be bogging down corporations with extensive taxes? We want the corporations to invest their money back into the business and by removing the corporate tax we make America more appealing to conduct business. For the income and payroll tax, the goal is to create jobs and income, so why would we tax benefactors of the economy? Instead, we should be encouraging people to make money as well as jobs. By eliminating these taxes, America is appealing more to corporations and the people keep all their money.

Pillar 5: Consumption Tax This tax would raise some of the money that has been cut out by the income and payroll tax. In this case, it would be using taxes to stop people from buying excessive amounts of certain products. For example, taxable items would include: gas, pollution, smoking, etc. Due to the taxes on these products, Americans would buy (or use) fewer amounts of them while also making America cleaner.

Pillar 6: Legalize Marijuana America spends excessive amounts of money controlling schedule one drugs, such as marijuana, despite the fact that it is less harmful than many other legal products. When a criminal is caught they are sent to jail, which is paid for by taxpayers. So instead, legalize it, tax it, save money with a new side of income.

According to Why Marijuana Should Be Legalized: 'Regulate Marijuana Like Alcohol,’ “Marijuana legalization would produce hundreds of new jobs, raise millions for the construction of Colorado public schools and raise around $60 million annually in combined savings and revenue for Colorado's budget, the report

says.” This shows how legalization would be beneficial to states such as Colorado.

These are the 6 pillars, and as you can see it would be extremely difficult for any politician to propose them.

Even so, they all make sense and could be implemented. Many of these have been proposed before, but with the upcoming election and the economy needing a jumpstart, I think these could become reality. This 6-Pillar plan could bounce back our economy to levels that have never been seen before.

Too Many Homeless Houses Why did the US housing bubble burst and what might the future hold for this forlorn market?

By Duke Millett Today, the housing market is in shambles. In the first half of this year alone a total of 1,045,801 residences had foreclosure notices on file. Over the same period 0.79% of all households, 1 in 126, had at least one new foreclosure filing, according to a report from RealityTrac. Housing prices have reached new lows and are still declining. Financial institutions have begun to ramp up foreclosures after they slowed the process in 2011. The time that it takes a financial institution to foreclose a property has increased nationwide to 378 days by the end of the second quarter of 2012. This is likely due to the large number of properties that are being foreclosed. The process required to get a loan has

become very difficult and the credit market is just beginning to unfreeze. So how did the nation, and the world, end up in this jam and what does the future hold for the housing market?

house for a little while and then put it back up on the market. But, this rapid rise was artificial and unsustainable. Beginning in 2005 the entire system would begin to unravel.

In the years leading up to the popping of the proverbial “bubble,” the housing market was one of the fastest growing industries in America.

The price of real estate had been increasing consistently faster since the 60s. It looked like the price of real estate would swell forever. The average sale price of a new home in America was around $200,000 in 1999. By 2005 that number had increased to nearly $300,000. Because of the rapidly increasing cost of housing Wall Street discovered that they could make a fortune by buying and selling mortgages. They would take out large lines of credit in order to buy homeowner’s mortgages from lending institutions. They would then turn and sell them to investors for a profit.

These investors would get a nice return on investment because they got to collect all of the interest paid on the mortgage, which was usually around 4%. This market grew rapidly because the investors wanted to move vast sums of money out of government bonds which, due to recent regulation changes, were only returning around 1%. This encouraged banks to push lenders to give out more and more mortgage to less qualified individuals. This in turn drove housing prices up because more people were able to get money, which in turn pushed up the demand for housing. But, many of these mortgages were held by people that had no realistic way of paying for them with their current incomes. This wasn’t a problem for banks or investors at the time. If the mortgage was defaulted on, whatever institution owned it got the house plus all of the money that had been paid down on it. Because of the constant increase in housing prices they could just hold on to the

The first sign of collapse occurred when the number of foreclosures began to skyrocket. This meant that investors and banks ended up owning a huge numbers of houses.

When they tried to put these houses back onto the market to recoup their losses they ended up flooding the market, which was already heavily saturated because companies had been building houses as fast as they possibly could in an attempt to get a piece of the lucrative market. This almost immediately drove down the price of housing. As more houses are foreclosed the ratio of supply and demand became massively uneven. Real estate values plummeted nationwide.

This sudden and substantial drop caused a devastating side effect. Many home owners determined that paying off a $300,000 loan was ridiculous when their property is now only worth $200,000. They abandoned their mortgage and gave their house to the bank. This left the banks with millions of worthless houses. By now the institutions that loaned them the money to buy mortgages want their money back, but the banks have no money to give. In many cases they had no choice but to go bankrupt or to sell off massive amounts of assets.

This, among other factors set off a massive economic slide around 2007. We are still living in this economic slump today.

Unfortunately, at least for the housing market, the road to recovery looks like it may be a long one. The market is still flooded with devalued homes and creditors are still very hesitant to lend money. It will be many years before credit markets begin to unfreeze and the unoccupied houses that fill the market are bought up.

Once some sort of demand returns to the market contractors might be able to get back to work and lenders might start lending at a moderate level once again. Until then one of the most important things that can be done is to ensure that there are no more foreclosures and that consumer confidence is improved by market stability.

United States Down Under Where did Australia go right with their money and where did we go wrong?

By Boone Grigsby Do you know where we are economically?

If you really look and delve into what is really going on in our current recession you can see that we aren’t at all where we want to be. Studies have shown that we are getting to where we want to be but are moving too slow. We are taking one step forward and four steps back. There are many countries in the same boat, but none as powerful as we are. There is one other developed nation, also hit by the recession that is not in the same situation as we are. On the contrary, Australia is no longer in debt, and has started with their surplus years. So where does that leave us? What are they doing that we aren’t?

Shall we find out over the years, Australia has tried to get out of debt and finally, they have! Many people wondered how they did it and want to know the secret to their success. There were two things that they did that brought them out of their recession. The first was that they had help from China.

The Prime Minister of Australia Julia Gillard Commented in the Telegraph that, “Australia is benefiting from

China’s boom in mining.” They started cut defense and cut 3,000 public jobs to get where they need to be including cutting help from other countries in foreign exchange prices to have this much power in this world again though is steep especially if you are just a regular person. In the article, “Australia to Become the First Major Economy Since Start of Financial Crisis to Record Surplus” they comment that, “To compensate for the likely increase in electricity and power price, the government has cut taxes and flagged handouts worth £400 a year each to 1.5 million families.” What this is saying is that you can get more jobs, but you are going to have to pay more for things like electricity for you and your families. Is this the real means to help us with our problems as well? This seems so easy, but why is it that it seems so difficult for us to get this? Now many people believe that it came over night when they have actually been doing this for years. In cutting some of their military funding they may have weakened themselves, but now being in a surplus state they can make better allies with other countries and able to actually do more with their money.In American we live vicariously in amazement. In American we are running a deficit, and we have been since the beginning of time, but just recently shot high in the sky after Bush took over the office. While Bush was in office, as quoted by Lewis Black in Black on Broadway, “Just a few years ago we had the highest surplus ever, 2 trillion dollars, and now just a few years later we have the largest deficit ever, 3 and a half trillion dollars, that means we went through 5and a half trillion dollars and nobody knows where it went.” All of the money went into military spending for the war and ever since then we haven’t seen a cent of that back. Instead we have gotten a new President that is slowing the hole we are making but still losing more and more money. We constantly look to other people like China to help us with items that we need. We also continue to deal with the border issues instead of everything else. I guess that

that is another thing that Australia did right though too they live on an island with no bordering countries around them trying to get through. But back to the main issue, we have been desperately trying to get out of it but it’s not working. What can we do? Let’s take Australia’s idea and improve upon it. We can take away jobs for more money to be given and taken in our cycle, cut funding for things that we have enough of and of course only trade with places we absolutely need. We need to look outside our boarders for solutions as well.

This won’t happen overnight. So take a chance and see what you can do to get us out of this problem.

Where the Recession Began What Do the Banks Do With Your Money?

By: Addie Darling Have you ever wondered what happens to your money in the bank while you’re not looking? The deregulation of banks is a problem that is causing the United States to lose huge amounts of money, because of risky investments into the stock market and mortgages. The deregulation of banks started to get very bad when the Great Depression was just coming to an end. President Roosevelt enacted the Glass Steagall of 1933 to stop the banks from investing in things other than local investments, holding and saving money, etc. In 1999 President Bill Clinton repealed the Glass-Steagall Act of 1933 and replaced it with the Financial Services Modernization Act of 1999 which allowed the banks to invest, essentially in whatever they want. Reading this article will inform you of what is happening to the money in the savings account and why houses have gotten so dang expensive! That means that the housing market is suffering and many people cannot pay for their house so

bankruptcy is their only option, which in turn make our economy worse. This article is information based and I will strive to be as truthful as possible. Banks have always been a very important part of our economy but recently banks have made our economy worse. Banks take the hard earned money that you put into your savings accounts and uses it to invest in the stock market. As you and I both know, the stock market is very unpredictable and whether a person makes or loses money is completely a matter of chance. When banks were regulated, the bank could not use your money in a “risky” way. The banks were only there for one purpose: to hold and save money, and to invest local loans. Let’s look back in history a bit and look at how the Great Depression started. The banks invested their costumer’s money in the stock market and the stock market dropped substantially, making the banks lose all of the money they had, that wasn’t their own. If this continues to happen, our future will be a repeat of the Great Depression of 1929. There was regulation of banks at one time and the thing that held it all together was the Glass-Steagall Act of 193. In the article “GlassSteagall Act & the Volcker Rule written by Stacy Mitchell it clearly states that regulation of banks was, indeed, a good thing: “The 50 years following the passage of the Glass-Steagall Act constituted by far the longest running period of financial industry stability in U. S. history. Only a tiny number of banks failed, while the economy as a whole underwent robust growth.”

Franklin D. Roosevelt created an act that regulated banks. This means that the banks could not loan out money, invest in business, or the stock market. Banks were there for the peoples’ use only.

Banks stored money and kept it. This sent the housing market into a great boom.

Everybody could afford houses because the houses were very inexpensive because of inflation. Even newlyweds and

teenagers had enough money to buy a brand new house. In 1999, President Bill Clinton and members of the Senate decided to repeal the Glass-Steagall Act of 1933, and put Financial Services Modernization Act of 1999 in its’ place, which gave the banks many more opportunities to invest in things they thought were necessary.

of trouble. Ponder on that while you put your money in the bank.

The housing market is now one of the most expensive aspects of living. It means that the housing market is suffering and many people cannot pay for their house so bankruptcy is their only option, which in turn makes our economy worse. The reason why houses are so expensive is because of the enactment of the Financial Services Modernization Act of 1999. When Clinton deregulated the banks he allowed the banks and insurance companies to invest in mortgage back securities. This in simpler terms means that mortgages are backed by securities that are bought and sold on the open market, Wall Street. This means that banks were gambling with the money in their customers’ accounts, just like in 1929 at the start of the Great Depression.

The regulation of banks happened for a good reason and since it was repealed, I truly believe history will repeat itself.

By Ryan Maloney

Resolving the issue is quite simple. The only thing that I believe needs to be done is reinstate bank regulation.

Many investors and stockholders need a slap on the wrist and a little bit of tough love so that they understand they cannot foolishly invest anymore. The reason why this problem needs to be resolved is because right now, as you are reading this, America is losing money. For us to enable an active economy, money needs to be printed and in doing so, more money needs to be spent. Our debt, right now, is overwhelming, and the deregulation of banks is not helping. Nigel Farage is a British politician and the leader of the Independence party and he said “The banking collapse was caused, more than anything, by bad government policy and the total failure of bad regulation, rather than by greed.” This sounds perfectly accurate, in my opinion. The deregulation of banks is foolish and if we don’t stop it, we will be in a world

Without a Market Economy The Importance of a Market Economy

Today’s market economy is an economic system of free trade where the value of goods and services are arranged by supply and demand, which is the amount of a product that a market has available. A product becomes demanded by what the people want and demand based on the availability of the supply. The market economy is designed to have decisions made into a plan of production and investment that is not controlled by a central authority. Without a market economy, there would not be a need for supply and demand and we would not be how far we are today.

Without having a market economy you would be relying on negotiation and trade. You wouldn’t be able to go buy anything that you needed. You would be selling/trading items that you own, or might grow. With this you would be developing more of a social community, because you would be working with the people in the community to get what you need. With this, it would result in having no chance of being able to save goods, money, etc. and would result in staying in

the same spot without having the ability to grow any wealthier.

The advantages of having a market economy are when a product is demanded, the corporation will start producing it. This results into a better and easier life for the people who are consuming the product. If a person develops a good idea that can help the life we live, then that product can be placed in the market being available for the ones who are for it. With the market economy being this way, it develops our lifestyles through raising our standards of living further in the way we live, from the new ideas rising from individuals.

There is no need to worry about having enough of something in order to get what you need from trade or negotiations.

A disadvantage of a market economy is the over amount of goods that come about due to overproduction. So many goods are put to waste, because the production number was increasingly higher than what was actually needed. When the demand for a product is demanded, the firm will produce it, but this could turn into having a negative affect further down the road. An example would be fast food, which is always in demand. Because of the amount of fast food demanded, it has resulted into making individuals obese and has adversely changed peoples eating habits.

Without having a market economy we would be living in a closer social community, but we would not be where we are today. We would all be the same with having no way for improvement and medical technology. We would be in the same place, unable to move ourselves forward. New ideas that come about wouldn’t matter, because there wouldn’t be a way to develop and produce to supply those ideas. Without a market economy, we would not have come where we are today and would not be moving any more forward.

Greece in Free Fall What caused, effected, and resulted from the Greek economic meltdown?

By Jack Hewitt In late 2009 the economic situation in Greece took a turn for the worst. The change in government revealed the true size of the country’s massive deficits and lead to one of the largest economic defaults in history. Prime Minister George A. Papandreou announced that he had, “discovered that its conservative predecessor had falsified budget figures.” I believe that this concealment of information was the result of the lack of systems that would regulate and over see what was happing in the government. This lack of regulation also resulted in Greece being able to borrow and accumulate debt.

“Greece relied on the strength of the euro and the rock bottom interest rates to drive up borrowing and built up $400 billion in debt most of it borrowed from countries like France and Germany.” Once the deficit was brought to the public eye Greece was frozen out of the bond markets and in May $152.6 billion in aid was given to Greece by its surrounding countries. Greece was forced to cut the pay of its public workers by %10 but continued to slide deeper into the recession. In October 2011 the Parliament passed austerity measures to insure that bailout money would continue to enter the country. Austerity measures, for example, raise the year you can retire. This allows the Greek government to pay less in social security and Greece needed to show that they could cut spending so they implemented austerity measures. This resulted in protests turning violent which would be a common pattern for the following two years and are still occurring to this day. Greece then began borrowing money from other countries they needed to show the other countries that they could succeed in meeting the requirements that other countries had for the Greek economy and cutting government spending was one tactic. This however outraged a large population of the public that comprised the public sector.

In May 2012 the government that was in power, who was blamed for the economic failures, was overturned by voters in a crushing defeat. Antonis Samaras was

sworn into office on June 17 and was immediately faced with issue of yet another bailout. Samaras, in September, made a deal for an €11.5 billion austerity package that included fresh cuts to pensions, salaries and other expenses.

The plan was needed to convince the troika to give nearly 32 billion euros however the troika rejected the plan fearing that Samaras, “would not be able to deliver results.” While Samaras was revising the plan tensions outside the government began to escalate. With unemployment at 21 percent, the minimum wage cut by 22 and 150,000 public workers laid off the public began to get restless and several protests turned violent. People are discontent with the new deductions to their income but their country has sunk to a point where they need to accept the fact that they might not be able to live the same life style they did before the collapse. People are hesitant to give up that standard of living and they are fighting for better austerity measures. In Athens 80,000 people marched in protest the day before Parliament approved the package on February 13th. These revisions to the plan were needed however they also negatively affect the economy. With a crumbling middle class less money was circulating back into the small business economy that is a dominating portion of public livelihood in Greece.

In late July Germany started publicly speaking out that Greece could leave the euro. Many people, around 80 percent, say that they would rather stay with the euro.

If Greece were to leave the euro the drachma would be devalued by an estimated 50 to 70 percent compared to the euro. With the devalued currency, inflation would rise rapidly, and Greek companies would struggle to pay the bills to the suppliers in euros. Trade with other countries would slow sharply, as suppliers halted

deliveries, further crippling Greek businesses that depend heavily on imports. Another possible solution would be to begin using what is called local money. The Greek government would use this local money to pay its civil workers and state pensioners in part with something that may be called a "temporary system of vouchers", and write on them whatever name they like, for instance "drachma" or "eurodrachma" (introduced with an exchange rate 1€Dr = 1€ with the euro).

However I don’t see this as a potential solution because the Greek government would still face the issues of inflation when they began to print off a new form of money. No matter what they call it the exchange rate will fall drastically from its one to one ratio and this would dig Greece father into a very deep hole.

Outsourced and Out of Funds How Globalization is Killing Us

By Ginny Taylor Globalization makes many peoples' lives easier, but it's also killing us. Think about the term “globalization” for a minute. It implies that the entire globe, the entire world, is involved together in one thing. Globalization unifies the world, specifically their economics and trade.

Jobs are traded all over the world, as are goods, which means that many jobs in wealthier countries are outsourced to places where labor is cheaper. The money, and therefore power, is shifted from those countries that outsourced jobs to those countries that work the outsourced jobs.

This process seems like it would be a good thing for countries like Mongolia, because some of the capital from wealthier countries would circulate into the country and stimulate the economy. This is true. Looking at Mongolia's GDP (Gross Domestic Product, the total market value of commerce in a country.) in 1992 ( -9% )

and comparing it to this year, ( 17% ) it is obvious that the economy has grown significantly in the right direction for Mongolia. Many people who were unable to find employment now have jobs from countries who outsourced them. The question to ask is where did those jobs come from? Who lost their jobs due to outsourcing?

Countries like the US and Ukraine outsource many jobs to countries with lower labor rates. That's where most of the extra commerce and jobs in countries like Mongolia come from. Now the question is, who were those jobs taken from? The middle class is the answer.

In the United States especially, the middle class is taking the toll for the outsourcing of jobs. In a capitalistic society like the US, this is a huge problem, because the health of the national economy depends on the health of the middle class. The same goes for the Ukraine. John van Reenan, professor of economics and director of the Center for Economic Performance at the London School of Economics and Political Science, was interviewed over the telephone about his views on globalization.

When prompted to speak about the negative effects of globalization on wealthier capitalistic countries, he

responded, "The worry isn't the quantity of jobs; it is the quality of jobs. Other jobs will appear, but they may not be very attractive jobs." He continued on to say, "It is a continuation of the hollowing out of the middle class, which we have seen. People will find it harder to support a middle-class family."

The people in countries like the US and Ukraine seem to be getting the shorter end of the stick in the game of globalized capitalism. However, there are negative effects on the countries like Mongolia as well. The changes to these countries happen more slowly. So slowly in fact, they're hardly noticeable until you really look at it. Mark Juergensmeyer, a journalist working for the Huffington Post, wrote an article about his experiences in Mongolia. The first time he visited the country, it was in 1992, right after they had liberalized themselves from Soviet rule. He left Mongolia and didn't return for 20 years, and the differences he saw were a shock to him. Juergensmeyer details those differences in the article Globalization Comes to Mongolia. The first time he stayed in Mongolia, a new hotel was being constructed a short distance from the hotel he was staying in. The hotel was to be named the Chinggis Khaan. During his second visit, he stayed in that very hotel, but the difference he saw in it was astounding. “The Chinggis Khaan Hotel is already looking a bit seedy, however. Though the staff has tried to maintain its grandeur, it already seems dated, the grand elegance fading. Even the statue of the great Khaan looks a bit worn,� he writes. He also compares the state of the hotel to the state of the rest of the city, in which much the same effects have taken place.

The culture and tradition of Mongolia has been worn down and replaced with the dull monotone of utilitarian buildings and overheating cars.

All considered, globalization outsourcing jobs and modernizing all the countries in the world - isn't the best solution. A better solution would be to help the local businesses of small countries prosper, so that they may function sustainably as individual, independent, and unique countries. This would both preserve the culture of smaller countries and keep the middle classes of countries such as the US and the Ukraine. Stop globalization. Uniting the globe under a single dull gray flag isn't going to help anyone; independence is key.

Outsourcing America’s Work Helping or Hurting the American Economy?

By Emma Baffin Donharl Outsourcing employment opportunities is an escalating trend that has been infuriating many American citizens since the stock market crash in 2008. Citizens of all political affiliation are asking big businesses, "Why are we sending jobs overseas when the unemployment rate is climbing on our own soil?" Many companies insist that this is a good economic tactic; that they are spending less money on labor and supposedly creating upper management jobs for the American people. As the clash between average civilians and corporate savants continues, we must ask ourselves, is this truly helping the American economy? Or is job outsourcing simply a tactic for companies to make more and spend less?

Outsourcing became a big issue for America in the late 1970’s, when a strong trade connection with Asian countries blossomed out of World War II. This eventually evolved into the installation of clothing manufacturers in Asia, replacing an enterprise that was previously active on American soil. As international trade grew, more and more European and American companies turned to the East for their factory needs. In the 90’s, a decrease in collegiate education also contributed to American companies pushing for outsourcing. Only 5% of American graduates held an Engineering degree, while 46% of Chinese graduates were schooled for engineering. With a stronger base for factories and production, American companies imported their production needs outside of our borders.

Many Americans have shown contempt for outsourcing, and rightly so. The unemployment rate has risen, and the idea of shipping precious jobs overseas seems painful. Corporate enterprise disagrees, stating that outsourcing is actually creating jobs for us by replacing

minimum wage work with higher paid uppermanagement jobs. Companies like Zenith Electronics Corporation are an example of how outsourcing has saved big businesses from going under. When the recession peaked in 2008, Zenith had the choice of shipping their work to Mexico for cheap labor, or laying off thousands of workers and discontinuing production.

Because they chose the former, they were able to save money and replace lost jobs later on. In addition to outsourcing, America is one of the highest recipients of employment by international companies. The company oDesk works out of many different countries, but America is their third highest recipient of employment opportunity.

In the countries that receive employment from foreign companies, the benefits and the costs are even. The countries are able to adapt to Western culture, and the citizens have a source to provide for their families. There are risks, however. Companies will often move out and leave the workers in debt with nowhere to go. In addition, the loose environmental laws in third world countries allow factories to poison their land and people without repercussions, for slightly increased efficiency. With the ability to find cheaper labor, companies quickly abandon their employees. and shove off to the newest opportune location, leaving places like India and the Philippines desolate. Yet in time, another company usually floats ashore, taking advantage of their cheap prices and flimsy environmental regulations.

Outsourcing has aided and abetted many different economies. It has saved many companies through tough economic times, but it can hurt other countries in the process, as well as domestic candidates for employment. Outsourcing is simply a band aid; it covers and protects enterprises from bankruptcy for a while, but it cannot stop the infection of unemployed civilians from growing. Companies claim that they are

outsourcing for only a little while, until the economy is back on its feet. But what if they continue to seek cheaper labor? Outsourcing could possibly work if the sites were semi-permanent and still provided employment for both of the middle and lower domestic classes. A solution to this problem is to attempt a globalized marketplace, with jobs being outsourced evenly across the world. However, even if this system were to be installed and regulated, the question persists: Could we handle this system without patriotism and nationalism bringing us right back to square one?

The Republican Ignorance Why the US Won’t Ratify the Kyoto Protocol!

By Zack Dowd KYOTO PROTOCOL!! Sounds dangerous? Well, it isn’t dangerous at all. You might hear that it’s going to ruin our economy by shutting down different plant, and the worst part is that because the Republicans started expressing negative feelings with this agreement, other parties followed. In reality, ratifying the protocol would benefit everybody in the long run, especially the United States. The damage our economy would face is nothing compared to what the outcome will be if enough CO2 pollutes our atmosphere.

The Kyoto Protocol was an agreement created by Japan and brought to the UN. The protocol would cut emissions by creating limitations on countries and starting an emissions trade system (trading emission credits which a country can redeem for emission units for energy). The depth of the Kyoto Protocol is immense, but the biggest problem that some countries had with it was that it was mandatory if you signed on and ratified. That is what made the US government skeptical which, at the time, was run by the Clinton Administration at the time (1999). Clinton only signed on to the agreement so that the other countries could partake in the protocol. Clinton was not overly fond of the agreement and he knew that the Senate would not ratify this agreement because it was a mandate, so the

U.S. did not incorporate the Kyoto Protocol and its regulations into the US economic system. Eleven years later and the Kyoto Protocol has yet to be used by the US. Why would the Senate not approve of this agreement?

At the time the Kyoto Protocol was created, the Clinton administration was in power, so the Protocol was looked at from a Republican perspective (small business, maintaining employment rates, etc.). The same Republican mindset was continued into the Bush administration. The reason that Republicans were very opposed to the idea of cutting emissions was the fact that there were many businesses involving fuel and producing emissions (such as coal processing plants, clothing plants, etc.) that would have to be shut down to account for losses.

Massachusetts governor Mitt Romney stated, “Unfortunately, some in the Republican Party are embracing the radical environmental ideas of the liberal left. As governor, I found that thoughtful environmentalism need not be anti-growth and antijobs. But Kyoto-style sweeping mandates, imposed unilaterally in the United States, would kill jobs, depress growth and shift manufacturing to the dirtiest developing nations. Republicans should never abandon pro-growth conservative principles in an effort to embrace the ideas of Al Gore. Instead of sweeping mandates, we must use America's power of innovation to develop alternative sources of energy and new technologies that use energy more efficiently.” This shows how the Republicans react to an agreement that would alter our job market. In reality, the protocol would cause the loss of jobs, but it would create more jobs as new sources of energy are found. The people that lose their jobs in power plants can get new jobs in, for example, solar energy or wind energy. People need to maintain those windmills and solar power plants, and the plant workers and engineers will already have experience and it will eventually lead to a safer, cleaner environment. Then again, we believed that the Democratic Party and President Obama might help clean up the environment. We didn’t know that the Obama Administration would feel the exact same.

The Obama administration has been in office for four years and what exactly have they done to save the environment or even make an effort? There have been many reactions to the lack of interest or opinion shown by the Obama administration when it came to the Kyoto Protocol. Strange part is that these reactions have come from the people that voted for him. The liberal public has expressed bitter reactions to Obama’s lack of action involving the Kyoto Protocol. An article in The Globe and Mail titled, Kyoto Withdrawal shames us all, states the public’s discontent, “It isn’t easy for a country to descend, in the space of a single decade, from crusader to pariah, as Canada has done on the environment. But our political leaders were up to the task.” As you can see, even the people who voted and sided with Obama are frustrated about the continuous delay of ratification as almost everybody in the US would like to see the Kyoto Protocol in action.

Even though I would love to see the Kyoto Protocol in action, people need to see the pros and cons.

There are always pros and cons to every decision and agreement, so the Kyoto Protocol is no different. One huge benefit to the Protocol is that if everybody would reduce their emissions output, we would have cleaner air and a cleaner environment all together. If we keep producing as much emissions as we are now, our atmosphere will eventually become the same atmosphere as Mars. Humans can’t survive on Mars.

One downside to the Protocol is the inevitable loss of jobs. An example for this specific downside is the effect that the Protocol will have on the coal industry. The coal processing industry is one of the biggest industries today, producing CO2 emissions. Coal burning plants will lose a substantial amount of money and millions of people will be out of a job. On top of all this, there would be massive stock drops with every coal industries’ stocks. This was the biggest problem to the

previous two Republican administrations. The protocol does provide a rebounding solution to that. As new energy sources are discovered, there will be a substantial amount of jobs created as I stated in the previous paragraph. New sources of energy such as wind energy, and solar power provide new jobs daily.

For example, solar power plants need engineers all of the time, so those workers that were fired from another plant can get jobs in solar power plants.

So, while providing more jobs, we’re saving the planet at the same time, so the Republican Party has a very vague and general idea of the total outcome of the Kyoto Protocol.

The huge reason that the US won’t ratify the agreement is because it is a mandate. Right now, if Japan wants to get the US on board, they’re going to have to make the demands a little more flexible to where specific countries will be able to lower emissions while at the same time, keeping the increase of global warming and greenhouse gases down. I believe that the US should just get past the fact that we will lose jobs as well as money, but the coast of the US will drown in ocean water if we don’t use the protocol, so if the US cares about its people’s lives, then they would help slow down global warming.

Worldwide Economy “Is Globalization Bad?” By: Brock Ontiveros 2,000 years ago began global trade, first between China and Europe started what we now know as globalization, the trade between countries on a global scale or the intermingling of two countries’ economies. This then led to the discovery of the Americas in 1492 which created an even larger net of trade.

The main problem with globalization is that it outsources jobs and for countries like the US this is doing nothing except taking jobs away from the American people and hurting the economy.

We need to insource and create jobs at home and then spread that into a global economy.

This way the individual countries would be building within themselves, creating stronger economies and markets through insourcing. Instead of creating transnational corporations (TNC’s) which are corporations that operate in more than one country at a single time. The problem with these corporations is that they outsource jobs to low income countries for cheaper labor, out of the world’s 100 largest economies 50 of them are TNC’s (According Newint.org). Though I believe some globalization would be necessary to sustain poorer countries and global trade can be used in very valuable ways, including only a certain amount of globalization but with the main focus being on the individual country. We need more local buyers and companies to build on the local economy giving us more strength to go global. Now that I have said these things there should be a balance between globalization and regulation because without regulation poorer countries become poorer and richer countries become richer so there is no balance between the two. This would lead to global disaster through dictators and stronger countries playing survival of the fittest. The problem is that we are so deep into using globalization it’s going to take years, if ever to get out of. For the moment we are not going anywhere. It seems as though countries economics are in a stale mate they have no way to grow. The big corporations are only outsourcing because of the cheap labor and using selfish motives to dig a hole we cannot get out of thousands of under paid and poorly treated workers in companies including Apple are being worked to death in places like China only because of their low income. 2/3 of international trade is accounted by just 500 individual corporations (According to newint.org).

Instead of keeping an American company in America we build the economy of a foreign country while crushing their people in poor working conditions and treatment just so the rich can get richer.

That is where we are the rich are getting richer and the poor are falling further into the dumps or staying in the same sink hole.

We need to look at our own people to create and build our personal economies before we spread and build at a global scale.

You are Now Connected Economic Globalization

BY AUSTIN ROGERS Pick any two individuals in the world. You will find that they are connected to each other by an average of 7 or fewer places (the people you know counts as one place, the people they know counts as two places and so on).

Our world today has the ability to share ideas and tell others about what is currently happening around the world. The speed of information travel between people is faster than ever before. However, sometimes the globalization of the economy has a downside.

Now with a connected world, if you sold a product you have the capability to sell that product to anyone, anywhere. This can be a great thing for under developed countries. When goods can be sold around the world countries can grow faster and avoid some of the mistakes made by countries that first developed like the US. For instance, people who work in India answering phones for large corporations didn’t have jobs and most lived in extreme poverty before globalization.

Globalization has resulted in wealth being distributed more fairly across the world. Not only are products being shipped worldwide but ideas are being shared at

a lightning fast speed. A revolution was planned over Facebook and Twitter in Egypt, business meetings are taking place in multiple countries at the same time all because of our inter connection to everyone.

Sometimes, however, a connected world doesn’t help everyone. Countries with lower standard of work conditions are stealing jobs from countries that need jobs for its people.

Manufacturing, for example, is one of America’s vertebrae. Joel Popkin said in a recent interview about the current economic state that: “Manufacturing’s innovation process is the key to past, present, and future prosperity and higher living standards. The intricate process starts with an idea for a new product or process, prompting investments in research and development. R&D successes lead to investments in capital equipment and workers, and to ‘spillovers’ that benefit manufacturing and other sectors. This process not only generates new products and processes, but also leads to well-paying jobs, increased productivity, and competitive pricing. Yet while this process produces wealth and higher living standards, most of it is hidden from view and poorly understood.”

However, manufacturing has been leaving the US, outsourced to countries like China and India where working conditions are lower. The lower the working conditions are the less it costs to make a product resulting in more profit for the producer. When a country’s population is out of work the entire countries economy dies. When one countries economy crashes it starts a chain reaction across the world. An example of this was the 2008-09 market crash of the US. Within a few weeks the Europe had an economy crash followed by most of the world powers. A world power crashing

spells disaster for poorer countries that are still in development.

If we want to change the current economic globalization we need to enforce regulation of trade between and in countries. If regulations were set in place then countries could more evenly distribute the work load so all nations have a working force. Having a stable economy that is worldwide would help everyone as long as all nations play by the same guidelines.