PEP ISSUE
DECEMBER 31 2020
M A G A Z I N E / H O L I D A Y
FOR YOUTH
003
E D I T I O N
POLITICS/ECONOMICS/ PHILOSOPHY
2020 Recap SIDDHARTH SATISH
Since PEP began in March of 2020, we have seen tremendous growth in the magazine. From a team of 5 people the magazine expanded to over 600. The majority of whom come from Zimbabwe's Maanica Youth Assembly, and are led by Jussa Kudherezera. In terms of magazine reads we have seen close to 100,000 reads of the magazine. We are thankful to the following schools for distributing our content to 45,000 readers: Plano West Senior High School, WW-P High School North, Kirrawee High School, Piedmont Hills, Lambert High School, Lycée Paul Valéry, New Trier High School, Billerica Memorial High School, Shepton High School South, Brooklyn Technical High School, LA High School, Community Middle School, Ohio Virtual Academy, and Grover Middle School To our readers who find us on issu.com, we are so grateful for all of you as well. We have reached 102 countries through our magazine and by presenting at the UN GA75 World Humanitarian Forum, PEP has achieved new heights. We want to thank all of our readers for a successful year, and hope that we continue this prosperous journey into 2021!
our directors
Trisha Murali Director of Editing
Divyanjali Raskonda Director of Sponsors
Veronica Hester Director of Philosophy
Anikait Chakroborty Director of Editing
Tammy Chao Director of Internal Affairs
Hiba Laziri Elliot Liu Director of Economics Director of Economics
Ashrit Yarava Director of Website
Fenil Gala Director of Finance
Nathan Kim Director of Philosophy
Mayank Chauhan Jussa Kudherezera Director of Outreach Director of Recruitment
message from ZIMBABWE
Manica Youth Assembly (MAYA), one of our key partners for African region development, has witnessed a lot over the past few months as a result of the torrential rains in Zimbabwe. Here is a message from their leader Jussa Kudherezera: It's disturbing to learn that residents in Dream House Mutare Zimbabwe and surrounding areas suffered from the heavy downpour. MAYA is deeply worried about this incident and also that cultivation being done around CBZ area should be stopped immediately. Dream House is directly linked where the railway line passes and on Saturday the train had to delay operating as the concrete under the rails were also swept by heavy rains. MAYA is encouraging well wishers to help especially with food items and blankets to the affected families. Furthermore MAYA is encouraging surrounding communities to plant trees so as to curb deforestation and respond to climate change. ~Jussa Kudherezera Here are some images of the plight in Zimbabwe, from our MAYA representatives.
While there are many ways to help, donating is one major way to make sure the people of Zimbabwe get the aid they deserve. This GoFundMe is one of many contributing to the cause. Our thoughts and prayers are with all of our members in Zimbabwe!
R U O
SECTION
L A I C E P S
economics
Each issue cycle, we highlit a division of our magazine that has performed exceptionally. The past two issues were politics and philosophy, respectively. However, in this issue the economics team members have outdone themselves, and are our special section of the holiday issue. The directors of the special section of this issue are Elliot Liu and Hiba Laziri.
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S T I M U L U S
Brandon Huang
T E C H N O L O G I C A L
P R O G R E S S
Mehaer Chhabd
H O W
D O
E C O N O M I C
F I N A N C E
E L B A T
1 3
E C O N O M I C
CONTENTS
F O
economics
A G E N T S
T H E M S E L V E S ?
Prethivika Vimalraj and Vanshika Singh
11
D E F I C I T S :
Varrshitha Kuma
A
D O U B L E - E D G E D
S W O R D
1 economic stimulus By: Brandon Huang
Chances are, at some point ever since Covid-19 reared its ugly head back in the beginning of 2020, you’ve heard the term “stimulus check” or “stimulus package” being thrown around, and if your ears are particularly alert, you’ll be aware of just how much danger national economies are facing as a result of everybody’s favorite SARS descendant. People are spending less, whether it be because of a crippling inability to venture out and splurge on objects of happiness or the prudence adopted by many while staring down one of the most ruinous pandemics of the past century. Consequently, businesses are struggling without even a fraction of their usual customers or income. These issues are collectively recognized as a recession, and the Covid-19 stimulus package, a part of the CARES (coronavirus aid, relief, and economic security) act, comes as an attempted solution to the encroaching recession, being designed, by definition, to encourage spending and to reinvigorate the economy. That said, it would be impolite of me to speed along our little highway of chat and enter the realm of specifics without first touching on some of the generalities of stimulus measures and what exactly they might entail. For starters, let's step away from the term “economic stimulus” for a moment and focus purely on the latter half: stimulus. When placed in the context of psychology or biology, stimuli is something, anything, that can elicit a response from an organism. Think of all the times someone’s tapped you on your shoulder to get your attention - that tap is a psychological stimulus that elicits a response from you. With economic stimuli, a struggling economy is “tapped on the shoulder” by the government in an attempt to increase economic activity. This can be done with either of two methods: fiscal stimulus measures or monetary stimulus measures. Fiscal stimulus measures are typically set by the government, affecting government spending and taxation, while monetary stimulus measures are set by banks or other monetary authorities, affecting the general money supply or consumer interest rates. In the case of the CARES act, both monetary and fiscal stimulus measures are applied to varying degrees. While fiscal policies are generally used less in comparison to monetary policies due to their macroeconomic risks, which will be mentioned at a later point, their importance to the maintenance of America’s economy during Covid-19 must not be understated. It was as a result of the American government borrowing money (hence fiscal
2 policy) to loan to businesses and employees affected by mandatory health policies that the U.S. market had a chance to recover to its pre-Covid-19 state, as it has done now. Effectively, the U.S. government lowered interest rates and encouraged investment so as to keep its market healthy. Regardless, however, both monetary and fiscal measures have the aim of encouraging economic activity, whether it be through helping individual citizens or companies, thus attempting to attain the original goal of economic stimuli: to discourage or reverse the recession.
Effectively, the U.S. government lowered interest rates and encouraged investment so as to keep its market healthy. Though apparent benefits of economic stimuli appear, these efforts to protect the economy are not all sunshine and rainbows and are most certainly not foolproof. Ricardian equivalence comes to mind as a theory designed in opposition to economic stimuli, namely fiscal policies, by David Ricardo. In short, the theory argues for the ineffectiveness of fiscal policy, or government debt-supported spending, due to the eventuality of inflated tax rates when said debt must be paid. As such, investors and consumers would amass money in preparation for the upcoming tax increases, contrary to the aims of economic stimuli. In a similar respect, the crowding-out effect is another theory suggesting the detrimental effect government spending might have on the private sector or non-government spending. This theory attributes rises in real interest rate to excessive government spending, citing the finite nature of capital and tying government spending to a lack of capital. The rise in real interest rate, again, discourages investment or spending, rendering the implementation of economic stimuli useless. With the pros and cons of economic stimuli out of the way, a discussion on the necessity of a second Covid-19 stimulus is at hand; the average citizen might stand to benefit from yet another stimulus, but are the conditions of the U.S. economy suitable? I believe that they are; with the number of daily Covid-19 cases skyrocketing and mandatory lockdown being instituted once again, consumer and investor stress will only increase, and the circulation of money will be akin to the blood flow of a dying animal: slowed down and eventually, halted. Should action not be taken to restore blood flow, the American economy might just suffer as the animal had, and the implications of that certainly aren’t very pretty.
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3 Technological progress By: Mehaer Chhabda The evolution of technology is marvelous. The sheer capacity this industry has reached is astonishing. Today, technology is limited only by imagination and it will only grow. The geniuses controlling this technology have the world at their fingertips, and the technology available to the average human being is just the tip of the iceberg. Arguably, the importance of technology was realized when the industrial revolution took place. New factories were rising and new jobs were being created to provide the humans of the day with superior and cheaper material, while also increasing production efficiency. Back then, being a part of these factories was being at the heart of society’s development. Now, the institution of those factories has transformed into the industry of technology, bringing the tech world at the forefront of civilization. Our modern society was unimaginable just a few centuries ago, and the only reason we are where we are in technology. Technology brings along some great inventions, including tremendous improvements in communication and efficiency, creating incredible advancements in the medical field, no doubt saving millions of lives, and of course, the fact that so many people now have all of the information in the world contained in a small rectangle in their pocket. However, there are just as many cons as there are pros of technology. Although technology has improved humanity’s average lifestyle immensely, it has also caused shocking wealth gaps and contributed greatly to income inequality. As Forbes explained in their article, “[technology causes] more productive workers to be even more productive, widening the income gap between them.” As the people “good” with technology use it to improve the quality of their work and create their product efficiently, thus being “more productive,” the everyday worker, as in those who aren’t as comfortable with today’s new tech, lags in comparison, producing a time consuming and possibly outdated product. Since the improved work, due to technology, must be rewarded, and the same money circulates the office, the salary of workers with inefficient products is deducted, creating income inequality. Specifically, the older generation is affected the most by this level of technological advancement and the continuous upgrades of applications. Without the foundational knowledge to work with simple types of machinery such as phones and computers, the older generation can’t keep up. Similarly, it is extremely hard for people with a poor background to get ahead in this industry. Without that early exposure, often provided to students during middle and high school or even earlier in the United States, poverty-ridden communities lack the necessary skill to compete with the others who had a head start. The lack of funds to get computers and qualified educators further divides the two economically opposing communities, making it harder for those lower on the hierarchy to close in the economical gap, and reducing social mobility even further.
4 This income inequality causes the polarization of jobs. The polarization of jobs creates both an economic and social barrier between the “skilled” and “unskilled” workers. A large contributor to this divide is the “incredibly unequal digital skills.” The technological industry outshines all others since it is the most rewarding and economically beneficial field to work in, not to mention the incredible speed at which it is growing. Having the skills of an engineer, coding professional, or even a basic computer user are increasingly common when employers are searching for prospective employees. But technology is an intense and demanding field, being one of the most competitive. One can’t be just mediocre or “good enough” to survive in this profession. This need for excellence further widens the gap between the skilled and unskilled. It is a long and brutal process to achieve the level of understanding and proficiency required to excel, and even that’s not enough to stand out against the thousands of people doing the same thing. . But while getting there might seem extremely difficult, it is possible. Many have grown into exceptional and inspirational leaders in the industry, but for the majority of the population, it might be too late to catch up. The dilemma of “being too old” to adapt to new technologies and not being accepted by the younger generation often frightens the older generation into never seeking education or developing more than a basic understanding of technology. The jobs at the top of the hierarchy are occupied by the “techies,” and the everyday, repetitive jobs are conducted by their innovations In other words, robots and AI. And since the unskilled can’t climb the ladder, they fall back to low paying/minimum wage jobs. These jobs include This is how income inequality increases and how jobs are polarized. Being the best in any field opens you to many opportunities, but in the 21st century, being the best in technology is the most valuable. And obviously, being the best is never easy. Take a look at the tech giants such as Apple, Amazon, Google, Tesla, and Facebook, just to name a few. These companies are ahead in the technological race, and they are untouchable. It is clear that technology is the future, and we have to play the game to stay in the game. Undoubtedly, technical importance was first realized during the industrial revolution. However, these two eras couldn't be more contradictory. While the purpose of the industrial revolution was to create new jobs (often as factory workers) for people with average skill and agreeable backgrounds, the technological revolution requires specialized skills and critical thinking. While the industrial revolution was the creator of the middle class, the technological revolution eliminated the middle class. Artificial intelligence has reached levels that people didn’t even dream of and keeps getting better with every passing day. Robots replacing jobs previously occupied by the middle class has not only made production efficient, but it eliminates the possibility of human error. It seems like a no-brainer that the benefits of robots replacing the average workforce are canceled out by the cons, but it might not be as terrible as many have made it out to be. Although the industrial revolution and technological
5 revolution focused on different aspects of development, they both had one thing in common: change. It takes time for society to change. History has proven time and time again that humans learn to adapt. Although the polarization of jobs and income inequality due to technology is frightening, the economy will eventually level out. The world simply cannot function with such an immense gap between skilled and unskilled workers. The prediction of the economy for the near future is terrifying, but once everyone adjusts to the new way of life and accepts the importance of technology, more and more people will specialize in the development and enhancement of technology and new jobs will be created. Society won’t be the same, but it is human nature to survive and adapt, and we will do just that until another wave of change that will revolutionize society yet again comes along. Undoubtedly, technical importance was first realized during the industrial revolution. However, these two eras couldn't be more contradictory. While the purpose of the industrial revolution was to create new jobs (often as factory workers) for people with average skill and agreeable backgrounds, the technological revolution requires specialized skills and critical thinking. While the industrial revolution was the creator of the middle class, the technological revolution eliminated the middle class. Artificial intelligence has reached levels that people didn’t even dream of and keeps getting better with every passing day. Robots replacing jobs previously occupied by the middle class has not only made production efficient, but it eliminates the possibility of human error. It seems like a no-brainer that the benefits of robots replacing the average workforce are canceled out by the cons, but it might not be as terrible as many have made it out to be. Although the industrial revolution and technological
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6 How do economic agents finance themselves? By: Prethivika Vimalraj and Vanshika Singh An economic agent can be a person or a company that affects the economy by producing, buying, or selling products, stocks, etc. In a rapidly changing world filled with so much to discover and explore, how do economic agents manage their money responsibly and efficiently? Well, to answer this question there are two terms that are very important to know - financial needs and financial capacities. Financial need is the difference between cost and ability to pay. You may want to buy something really expensive because you really want it, but can you really pay for something worth that much money? Financial capacity involves the ability to manage one's financial situations in a way that is consistent with personal selfinterest and longstanding values. The use of interest rates in conjunction with the loans, or borrowed money, given out is a common practice today, mainly to benefit the lenders. Often, when people borrow money from the bank or another person, it is never a given if they will be able to pay it back. The borrower’s financial need may push them towards getting a loan. However, will their financial capacity allow them to fully pay back the money they borrowed? Because the answer to such a question is often unknown, it is common for the lender to ask the borrower to pay interest in exchange for the loan. Interest is defined as the charge or fees for retrieving the loan, put simply. The lender has no guarantee that they will get their money back, so they must use a method to ensure at least some compensation for the money they lose in that period of time. Thus, the borrower is asked to pay a certain amount of money to the lender, as compensation for allowing them to borrow money. The interest rate is like the price the borrowers pay for taking loans. In the world today, nothing comes without a price, and the same goes for loans. However, there are many factors that apply to how much interest a person pays for their loan, most of which depends on the borrower’s financial capacity. If the borrower is considered to be “high risk,” it means that he or she is highly unlikely to pay back the lender fully for the loan they took out. Such high-risk borrowers are often given higher interest rates to pay back, to ensure that the lender can be compensated. On the other hand, those borrower’s considered “low risk” are more likely to pay back the lender, with higher credit scores, too, and are offered lower interest rates. The lender will not have to be compensated as much for low-risk borrowers because it is more likely they will get their money back sooner. In other words, the higher the risk of the lenders does not get their money back, the higher the cost of credit for the borrower and the higher the compensation for the lender.
7 The household disposable income is simply the amount of money a person receives for their salary, after taxes. This type of income is ultimately a combination of the amount of money put aside for savings and the amount of money that the person uses, or their consumption. It is often observed that as the household disposable income increases, so does the consumption and savings. Household disposable income is split between consumption and savings because it is a combination of both. What the user doesn’t consume, then gets put into their savings. So, the more money that is consumed, the less money that is put into savings, and vice versa. The relationship between consumption, savings, and household disposable income is important when it comes to deciding one’s financial needs and capacities because it can be used to predict how their income will be split if it were to be increased. Specifically, the marginal propensity to save and the marginal propensity to consume display the ratios of change in saving or consumption to the change in disposable personal income. Such ratios are able to show how much a person would spend or save for every extra dollar they receive. Using such ratios will be helpful for planning the future financial actions of a person, especially when it comes to deciding how much to save or spend. Gross operating surplus is essentially the income that certain enterprises and companies make from different factors. It is calculated by subtracting the payroll of employees, as well as taxes and other deductions, from the amount that is added to the account balance. Companies have various ways to finance themselves to keep their businesses running and their gross operating surpluses high. However, the way that they choose ultimately depends on their own needs and circumstances. One of these methods includes self-financing, which involves a company using money out of its own pocket to keep itself running. There are, of course, many advantages that this method brings to the company, but there are also many downsides. With self-financing, it is easier for companies to keep track of their money and spendings because it is their own and it isn’t necessary for them to try to go around and convince investors. The process itself is much easier because, without the need for any investors or outside sources for funding, the company will be in full control of its finances. Self-financing may even help boost the company’s overall success as well because it will be forced to learn to take care of its own finances and make most of the decisions, without any outside influences. Of course, advantages are also presented with disadvantages. Despite self-financing seems like a
8 One of these methods includes self-financing, which involves a company using money out of its own pocket to keep itself running. There are, of course, many advantages that this method brings to the company, but there are also many downsides. With self-financing, it is easier for companies to keep track of their money and spendings because it is their own and it isn’t necessary for them to try to go around and convince investors. The process itself is much easier because, without the need for any investors or outside sources for funding, the company will be in full control of its finances. Self-financing may even help boost the company’s overall success as well because it will be forced to learn to take care of its own finances and make most of the decisions, without any outside influences. Of course, advantages are also presented with disadvantages. Despite self-financing seems like a blessing, it can be quite dangerous because there is always the risk of running out of money. Not only will the company fail to succeed, but the owner themselves will go bankrupt, as it is their personal money. This could cause a major shift in their lives as a whole, putting a major obstacle on the road, as they won’t be able to cover their living costs. However, there is also the aspect of external financing. It has its own benefits, of course, but also great disadvantages that don’t make it seem very appealing. Funding from investors and other outside sources relieves a great deal of stress on the company themselves because there is no risk that they will go bankrupt. There will always be a way to get money from a single source to spur the success of their business. However, the main disadvantage here is that with these external financing sources comes a great deal of extra money to pay in interest. For example, many bank loans require the payment of interest, and sources like bonds and equity financing also have their own requirements in exchange for the funding. Not to mention, some investors and external sources may even ask to be a part of the company’s decision-making boards or even for partial ownership of the company, in exchange for the funding. But despite such disadvantages, of both external and selffinancing, many companies use one or the other to fund their companies because their advantages may outweigh the disadvantages, depending on the needs of each individual company and business. A budget balance results from the difference between revenue, tax, and non-tax, as well as the expenditure on the state. Before moving on to explaining exactly how this occurs, let’s define revenue and expenditure to get a better understanding of what these words really represent. First off, revenue is income that a company or organization may receive from their business. In the case of a corporation, a company or group of people given permission to act as a single entity (legally a person) and recognized as such in law, revenue usually comes from the sale of goods and services to customers. In the case of a government, revenue usually comes from different types of taxes with the three largest contributors being payroll, income, and corporate taxes. Expenditure on the state refers to the amount of money that the federal government spends in total or on a specific thing.
9 Now that we have defined these two terms, it’s time to explore how to budget balance results from the difference between revenue and expenditure on the state. The phrase "balanced budget" is commonly used in reference to official government budgets. Governments may announce a press release stating that they have a balanced budget for the upcoming year, or politicians may campaign on a promise to balance the budget after being elected into office. A balanced budget describes a situation in financial planning where the total expected revenues are equal to total planned spending. Usually, the term balanced budget refers to government or federal budgeting. A budget can also be viewed as a full year's worth of revenues and expenses that have been sustained and noted down. When revenues are larger than the expenses there is a budget surplus because you received more money than you spent. On the other hand, when expenses exceed revenues there is a budget shortfall or loss; you spent more money than you had gotten. Such cases often lead to a rise in concern and panic. Another very important term to know is fiscal policy. This refers to the use of the government budget to affect the economy. In economics, crowding out is a phenomenon that occurs when increased government involvement in a sector of the market economy substantially affects the remainder of the market, either on the supply or demand side of the market. This includes government spending and placed taxes. The policy is expansionary when the government spends more on budget items like state infrastructure or when taxes are lowered in the state altogether. Expansionary policy is known as increased government spending or lower taxes to boost productivity. Policies like these are meant to help the economy. Such policies can be used to implement an economic stimulus. Generally, this is known as stimulating demand. However, the policy may be considered harmful when the government spending decreases or taxes rise. But, such policies may be used to fight rising inflation; they are not all too bad sometimes. Contractionary policy is decreased government spending or increased taxes to combat rising inflation. An expansionary fiscal policy leads to higher budget deficits while a contractionary policy reduces deficits. Governments use fiscal policy such as government spending and imposed taxes to stimulate economic change.
10 Many economists agree that an overload in the government debt burden can be a major risk to an economy. Eventually, taxes must be increased or the money supply can artificially increase and devalue the currency in order to make up for the debt. This can result in a tax bill once taxes rise and very high-interest rates that will harm business and consumer access to credit. It could lead to inflation that may disrupt the entire economy. Inflation is when the currency value would decrease and in exchange rates, one unit of a certain currency will no longer buy as much as it used to in another currency.
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11 DEFICITS: A DOUBLE-EDGED SWORD By: Varrshitha Kumar Suppose you decide to open a lemonade stand, and you spend 50$ on supplies however you only make 20$ from lemonade sales. Since you have spent more than you have made, your profits are insufficient. The word deficit is derived from the word deficiency. Deficiency means shortcoming or insufficiency. Likewise, a deficit is a shortcoming of money and revenue. A deficit occurs when liabilities exceed assets; expenses exceed revenues, exports exceed imports. When a person, company, or government spends more than it receives, they are running a deficit. Then what is the difference between a deficit and a debt? For example, when the government incurs a budget deficit, it needs to borrow money in order to finance the extra money that was spent. So the government borrows money to cover that year's shortfall. Debt is the accumulation of budget deficits over the years. On the other hand, a surplus is when there is an excess amount. Based on the fact that surplus and deficit are antonyms, a surplus is when revenue exceeds expenses. In other words, more money is received than spent. So in the case that you have made more money from lemonade sales than the amount spent on supplies and other expenses, you have a budget surplus. A budget surplus is when there is extra money left over in a budget after the expenses have been paid off. When a person, company, or government runs a deficit, any current surplus will be reduced, and the debt load will be increased. For this reason, it is widely believed that deficits are unsustainable over long periods of time. This also makes deficits non-viable in the long run. The two primary types of government deficits which a country can incur are budget deficits and trade deficits. A budget deficit occurs when the government’s expenses exceed the total revenue collected (tax revenue). The nation’s deficit totaled from previous years accounts for the country's national debt. Deficit reductions refer to taxation and an economic policy designed to reduce the Federal Budget deficit. A trade deficit is when the value of a nation’s exports exceeds the value of imports. Hence, more money is leaving the country than compared to the money coming in. For this reason, a trade deficit may harm a nation’s economy as it may result in fewer jobs available to the people and lowering the value of the nation’s currency. So why would governments and companies run these deficits with potentially harmful effects on the economy, intentionally? Some reasons why governments would run deficits include war, recessions, and tax smoothing. During periods of war, debts are higher since wars are expensive. So when a government’s purchases increase during a war, it can either increase taxes or issue government debt. Keep in mind that when a government runs a deficit to pay for the war, it is borrowing money from the public. Since government debt is paid by future generations of the country, the choice is between making the current generation pay the taxes or the future
12 generations. In most cases, the government chooses to make future generations pay taxes for the debts incurred during the war. This policy is called tax smoothing. Tax smoothing is when the tax rates are fairly constant over the years. So under the situation of an increase in expenses, such as war, financing the deficit over a longer period of time rather than a year is deemed to be the best option. This way, there isn't a drastic increase in tax rates, and it allows people to pay over time instead of in just a year. So running a budget deficit is beneficial to the government as it is able to impose smaller distortions over many years rather than large distortions within a single year. Another circumstance where running deficits may be beneficial to the government is during recessions. A recession is a period of economic decline, temporary fall in GDP, loss of jobs due to lack of trade and industrial activity. By choosing to run a budget deficit, the government decreases tax revenue and maintains it’s expenses to stimulate the economy and promote consumer purchasing power. For example, by increasing infrastructure expenditures, more jobs and income will be available to the people. This theory is similar to the theory of the famous British economist John Meynard Keynes, who claims that budget deficits allow governments to stimulate their economy by purchasing more goods and services. Contrary to common belief, Keynes highlights the benefits of governments running deficits. Governments may also run budget deficits to fund public projects or programs which benefit the citizens. The benefits of a government intentionally running trade deficits are also similar to those of budget deficits. It is argued that trade deficits allow countries to temporarily acquire more goods than produced and exported. As a result, this stimulates the nation’s domestic industries and allows the country to be globally competitive. Likewise, a business does not need to be in financial trouble in order to choose to run deficits. Running deficits also has its benefits to boost a company’s business. A business may intentionally run a budget deficit in order to maximize earning opportunities in the long term. One such example is purchasing new machinery which cuts down manufacturing and production costs. Another instance may be retaining employees during less busy months to provide a more suitable workforce during busier periods. While governments and business may reap the benefits of running deficits, there are drawbacks and risks that follow as well. The opposing argument for governments running trade deficits addresses how the domestic economy and citizens of a nation are being
13 negatively impacted by trade deficits. It is not beneficial to the country’s citizens as more job opportunities are being made available to foreign countries instead. Moreover, it is also argued that governments should avoid running fiscal deficits as the servicing cost of the debt incurred steals the resources which the government may utilize to implement housing, public infrastructure, and education. Other risks of government running deficits include reduced economic growth rates and devaluation of the nation’s currency. Businesses must also be aware that running deficits for longer periods of time may potentially bring down the company’s share value or even result in bankruptcy, and therefore be out of business. According to a CBO report, the longer it takes for a deficit reduction to be enacted upon, the more government debt will accumulate. Conversely, the sooner the deficit is cut, the effects on the weak economy will be more heavily felt, as business and local governments will need to adapt their economic behavior. When looking at the bigger picture, governments running budget deficits will accumulate their national debt and increase the government's debt servicing costs. Excessive government borrowing may also result in an overheated economy and lead to inflation. Ultimately, deficits are a double-edged sword. Running deficits may be a powerful tool to pull a nation of recession or weak economic periods such as war when used correctly. However, running deficits for longer periods of time may result in increased national debt or even bankruptcy. Hence governments and businesses run deficits deliberately in order to reap the temporary benefits, yet they must be aware of potential long-term consequences and risks.
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E L B A T
14 16
T H E
M I N D
B O D Y
P R O B L E M
charica Pagadala
T H E
L I F E
T U L L I U S
A N D
L E G A C Y
O F
M A R C U S
C I C E R O
Ishita Jadon
19
E M E R S O N
Eisha Nair
T R A N S C E N D E N T A L I S M
CONTENTS
F O
philosophy
14 our oath to economic growth By: Heather Butlet Are you your mind, or your body? To some it might feel obvious that you are your mind. Yet the mind resides in the brain, so that would mean you are really just your body, a collection of chemical reactions. But again, can’t life exist in a body without a mind? This conundrum of identity is called the mind-body problem. Humans have thoughts and therefore we have minds. This is called duality; humans have both physical attributes such as weight and height, and also non-physical attributes such as judgment and reason. But which of these determine who we are? Descartes argued that the mind and body both influence each other through the pineal gland (hormones). This means that the mind controls the body, but the body can also influence the mind. Descartes’ philosophy may seem to address both aspects of the conundrum, however, it has its uncertainties such as how the pineal gland actually affects the mind. The Buddha took a similar, more figurative approach to the problem. He described the mindbody as depending on each other like two sheaves of reeds leaning against each other. Both work together yet are interdependent. Plato disagreed and instead believed that the mind was captured by the body, and would only escape after death. He argued that the mind is eternal, and bodies are imperfect copies of them. Contrary to them all, Aristotle saw the mind-body as uncomplicated. Just as the shape of a price of wax is its property, he believed that the mind is a property of the body. According to Aristotle, when the body perishes so does the mind. He likened the conundrum to the properties of matter. The way in which matter behaves depends on the form it is in. This was how Aristotle explained the connection of the soul to the body. He believed that a soul existed in matter, that is, each human vessel contained its own particular soul. So, who is right? There is no one true answer to the mind-body problem, but Monism could potentially be the solution.
15 So, who is right? There is no one true answer to the mind-body problem, but Monism could potentially be the solution. There are two kinds of Monism: materialism, that there is nothing except the material world, and phenomenalism, that everything can be reduced to mental objects. Materialism is about explaining thoughts, experiences, and feelings in terms of the chemical reactions occurring in our brains. So according to materialism, we are our body and the mind does not exist. Phenomenalism, on the other hand, is about explaining thoughts, experiences, and feelings in terms of mental manifestations. So according to phenomenalism, we are our mind. But of course, limitations to materialism and phenomenalism exist too, as materialism is mainly contradicted by scientific research. There is, therefore, no answer for the mind-body too complex. The question of the source of our identities and soul is too complex to explain with just one theory or by just one philosopher's definition. That leaves the answer up to you to the conundrum up to you. Are you your mind, or your body?
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16 The Life and Legacy of Marcus Tullius Cicero By: Ishita Jadon Lawyer, politician, and philosopher Marcus Tullius Cicero was a formidable player in ancient Rome’s tumultuous arena of coups and conspiracies. Born on January 3, 106 B.C.E. Cicero was involved with some of the most infamous conspiracies to date involving Julius Caesar and Mark Antony. However, Cicero’s life did not start so inconspicuously. Cicero was born to an aristocratic family that was not well consolidated among the powerful names of ancient Rome. Ambitious from a young age Cicero dreamed of rising to fame and popularity as a politician. During his earlier years, Cicero realized because he was not born into a political dynasty, as a man in Rome he had but two paths towards his goal; the battlefield or the court. Detesting war, Cicero chose the life of a lawyer and quickly rose to popularity among the Roman Republic. He believed firmly in the Roman Senate and worked tirelessly to improve the Republic. For Cicero, politics was everything. Taking advantage of his newfound fame and connections, Cicero ran for every principal office at the youngest age possible and won them all on his first try. As a member of the Roman Senate, Cicero was immensely proud of his status and success and took every advantage to demonstrate his shrewd skills as an orator, the means by which he had gained popularity as a lawyer. In 63 B.C.E. as a consul (the highest office), Cicero uncovered and charged the conspiracy of Catiline preventing an attack to take over Rome by force. He was ruthless in his judgments and sentenced 5 of the conspirators to be executed without trial. Cicero’s writing suggests that uncovering the conspiracy was, to him, one of his biggest accomplishments. However, Cicero was soon to face another string of conspiracies involving some of the most infamous players to ever set foot on Roman land. In 60 B.C.E. The First Triumvirate, Julius Caesar, Pompey, and Crassus were at the highest seat of Roman politics. In their eyes, given his popularity and skill, Cicero would either become a formidable foe or valuable ally. Cicero’s refusal to join them and loyalty to the Senate marked his doom when his past came back to haunt him. Caesar took advantage of Cicero’s illegal executions and passed a law that stated any orchestrator of Roman deaths without trial would be stripped of their citizenship and exiled. For about a year Cicero lived away from Italy and took up philosophy. When he was allowed to return he could not practice politics and instead continued his work as a lawyer and philosopher.
17 In 49 B.C.E. Caesar took up arms against Pompey. Cicero supported Pompey but resigned himself to the idea that Rome would never again truly be a republic. When Caesar became Rome’s first emperor Cicero was pardoned but still banned from politics. On the Ides of March in 44 B.C.E., Cicero watched Caesar die. Cicero took full advantage of the opening that Caesar’s death created and took up politics again with zeal. The Senate, and Cicero, were once again relevant. Cicero made speeches in Octavian’s support, hoping to manipulate the teenager when he would be in power. However, his outspokenness and stubborn opinions once again put Cicero in danger. As part of Antony and Octavian’s agreement, Antony was able to kill those on his death list, one of whom was Cicero. Antony sent an executioner to cut off his head and nailed his head and hands on the speaker’s podium at the Senate as a warning for his enemies.
In an ironic twist, Cicero’s son Marcus took up politics and achieved the same position of consul as Cicero once had. It was he who announced Antony’s death. In terms of his contributions to the world, Cicero is not widely acknowledged as a man dedicated to philosophy. He believed in politics over philosophy and only took up philosophy as a means of making effective arguments or improving the state. Cicero studied philosophy as part of his legal studies. He was a follower of the Academy (the First Academy was founded by Plato and Cicero studied at the Old Academy and New Academy). He believed in Academic Skepticism, the idea that no philosophy can be proven as true because human beings can never be truly certain about everything. Skepticism encouraged Cicero to consider every side of a possible argument which benefited his legal prowess.
18 During his ban from politics Cicero explored philosophy through writing modeled after Plato and Aristotle’s dialogues. In total he wrote “On Invention,” “On the Orator,” “On the Republic,” “On the Laws,” “Brutus,” “Stoic Paradoxes,” “The Orator,” “Consolation,” “Hortensius,” “Academics,” “On Ends,” “Tusculan Disputations,” “On the Nature of the Gods,” “On Divination,” “On Fate,” “On Old Age,” “On Friendship,” “Topics,” “On Glory,” and “On Duties.” Unfortunately, many of these works have been lost over time. Cicero also lives on through his 60 remaining speeches and over 900 letters. Despite the fact that his legacy is not well known, on the streets of ancient Rome amidst political turmoil and chaos, Cicero was a firm and powerful force. He achieved political success at a young age and was acknowledged by legendary and infamous politicians such as Caesar and Antony. His incredible life and dedication to the Roman Republic are one for the history books.
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19 Emerson and Transcendentalism By: Eisha Nair Ralph Waldo Emerson was a philosopher and essayist in the 19th century United States of America. His ideals and philosophy were heavily influenced by his aunt, Mary Moody Emerson. She encouraged him to think outside of the regular Christian ideas that were usually instilled in the American population during Emerson’s era. However, to abide by his mother’s wishes, Ralph Emerson trained to become a priest and felt unfulfilled and disappointed by New England religious orthodoxy. After his marriage to his wife and her eventual death two years later, Emerson left on a trip to Europe. There, he visited “Jardin des Plantes” in Paris and had a revelation while in nature. He realized that nature is a part of humans. His second revelation in Europe came when Emerson met Samuel Taylor Coleridge and William Wordsworth, two respected English poets, and thought that they were ordinary compared to their public image. Emerson realized that ordinary people can become extraordinary people, only if they are able to stick true to their own ideals and question the status quo, promoting individuality. These two realizations would later influence Emerson’s work. Emerson first built on his idea that man and nature are one. He believed that there was a spark of God in every living thing and that everyone was connected. He later also developed his belief that every human is unique and significant. Individuality was very important to Emerson. He believed that everyone should listen to their minds first because one’s own mind is the most trustworthy. His ideas, however, clashed with those who blindly followed religion and tradition, Emerson believing that they were living to be the people society wanted them to be, not who they truly were. These two fundamental ideas from Emerson sparked the beginning of the Transcendentalist movement. Transcendentalism was a social, political, and philosophical movement in the early 19th century which was centered around Emerson’s ideas. Transcendentalists rejected the traditional norms set forth by 18th-century thought, through ideas such as free-will and the uniqueness of every individual. There was no one cause of this movement, rather it was a culmination of different things that snowballed into the need for a movement of reform. This
20 included the rise of philosophers such as Emerson and Thoreau, the start of industrialism, and a need for a more nuanced approach to religion amongst other revelations. As a man who touched the hearts of lower and middle Americans, Emerson helped bring forth this movement to those who were not accustomed to philosophy. These were the people who most wanted to avoid conforming to society’s standards and following the government’s ruling. The Transcendentalist movement allowed these people to stray away from the formally traditional beliefs that they were expected to uphold. Though the movement started in New England, its impact spread even outside of America, into Europe. Transcendentalism and Emerson’s impact have lasted well into our modern age. Many movements after Transcendentalism were inspired by its teachings, such as the movement for women's suffrage and the labor movement. Through his teachings and philosophies, Emerson has proven that no matter the year America values individuality, and its citizens should value their own thoughts.
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E L B A T
21 24 26
L A W S U I T
A G A I N S T
D E M O C R A C Y
CONTENTS
F O
politics
Rebecca Joseph, Women in Politics
B I D E N
A N D
U S
I N T E R N A T I O N A L
R E L A T I O N S
Andrea Chow, Women in Politics
B I D E N ' S
E C O N O M I C
Sara Keegan, Women in Politics
R E C O V E R Y
P L A N
21 lawsuit against democracy By: Rebecca Joseph, Women in Politics The Summer Solstice is normally the longest day in the year, but in 2020 another day took its place—November 3rd—also known as election day. Elections are always highly anticipated, but amidst the pandemic this election took the spotlight above all previous elections. Leading up to the election most major news sources and polling experts had predicted a Biden victory but they also expected Trump to finish election night with a strong lead. With Trump’s strong urge towards voting in person, many Republicans followed suit, thus causing a skew of votes towards Trump during the earlier counting stages, since mail-in-ballots were counted last. On Tuesday evening, Trump was leading in states such as Wisconsin, Michigan, Pennsylvania, and Georgia. However, as the night bled into early morning more mail-in-ballots were counted and Biden emerged to close the gap in those battleground states, yet no winner was officially called yet. On November 4th, a little after 2:00 am EST Trump spoke in the white house and claimed that the election was “a fraud on the American public” and touted a win in states, where he was leading from early results, but had not yet been officially called the victor by the Associated Press. Trump concluded the early morning speech stating “Frankly, we did win this election.” Trump's message during the press conference was clear and it sparked fear amongst the greater American public as to where the democracy was headed, as these claims Trump made were, at the time, and still are, false. Trump said he would fight election results in court even before the election if it came to it. He announced, after election night, “We want all voting to stop. We don’t want them to find any ballots at 4 o'clock in the morning and add them to the list, ok?” This claim is blatantly false and it is known that votes that were counted after November 3rd, 11:59 pm were votes that were in the polling centers, not votes that were added after November 3rd. Additionally, a joint statement from elections infrastructure Government Coordinating Council and the Election Infrastructure Sector Coordinating Executive Committees states “The November 3rd
22 election was the most secure in American history. There is no evidence that any voting system deleted or lost votes, changed votes, or was in any way compromised. While we know there are many unfounded claims and opportunities for misinformation about the process of our elections, we can assure you we have the utmost confidence in the security and integrity of our elections, and you should too.” However, this statement goes unnoticed by the Trump administration as they carry on filing court cases on the basis of fraud, leaving the rest of the country wondering about the sustainability of the democracy that the United States was founded on. Trump has every right to pursue whatever legal avenue he has, but many Republicans and Democrats are cautioning Trump about the message he is spreading to American’s at home and the rest of the world. Mitt Romney, Republican Utah Senator, and former Republican presidential nominee in 2012 came on NBC in mid-November for a comment on Trump's response to the aftermath of the election. Romney was asked whether pursuing these cases undermines the United States Democracy and Romney responded: “ Well I'm more concerned about the language that is used. I think it's fine to pursue whatever legal avenue one has, but one has to be careful in the choice of words. When you say that the election was ‘corrupt’, or ‘stolen’, or ‘rigged’ I think it discourages confidence in our democracy here at home and with the battle going on right now between authoritarianism and freedom. I think it is very important that we don’t use language that could encourage a course in history that could be very very unfortunate.” After election night all eyes were on the key swing states, one of which is Michigan, a state that played a central role in Biden's election and has been facing high speculation of voter fraud. In the 2016 election, Trump had won the state by 10,700 votes, it was the closest race in Michigan presidential history. Four years later, Joe Biden won Michigan by over 154,000 votes, according to results certified by the Board of State Canvassers. Biden’s margin of victory was 14 times larger than Trump’s 2016 victory in Michigan. Although this was not a close race, it is well within Trump’s rights to get a recount. However, the Trump campaign filed two lawsuits in Michigan, aiming to block the counting of votes and delay the certification of election results—both cases fell through. Although every case Trump and his allies have filed in Michigan has been unsuccessful, there is still mass speculation regarding Trump's interference with the Michigan ballots after Trump's latest meeting with Mike Shirkey, State Senate Republican majority leader, and Lee Chatfield, State House Speaker along with seven other lawmakers. With Michigan’s unusual method for certifying votes, the president could dishonestly flip the state if enough Republicans follow suit. Trump has openly encouraged Legislatures, specifically Michigan’s, to appoint their own electors. However, Mike Shirkey says President Trump just wanted to discuss Michigan’s election results in the meeting and did not pressure them to interfere in the election process.
23 It is not entirely apparent why Trump would summon seven state GOP legislators to Washington D.C. just to learn about Michigan’s election law, which clearly requires that the state’s electors must be those nominated by the party that received the most votes- not the Legislature. Shirkey reassures that the electors and Trump understood that “The law is the law, and we made it very clear we were going to follow it.” No matter what the legislators claim to say happened at the white house meeting, the trip has come under heavy scrutiny. Former Michigan Gov. Jennifer Granholm, a Democrat who also served as the state attorney general, implied there could have been some sort of inappropriate ask of Chatfield and Shirkey during the meeting. On Friday, Biden campaign attorney Bob Bauer called the meeting an obvious attempt to intimidate elected officials. "This is really very harmful to the democratic process and it actually troubles the people a great deal. There is nothing that I can imagine that is more beneath the president of the United States than to be haranguing officials." In true President Trump fashion, he took his battle against Michigan to Twitter stating “Everybody knows it was Rigged. They know Biden didn’t get more votes from the Black community than Obama, & certainly didn’t get 80,000,000 votes. Look what happened in Detroit, Philadelphia, plus!” Republican Congressmen from Michigan, Paul Mitchell responded, “Oh my God. @realDonaldTrump Please for the sake of our Nation please drop these arguments without evidence or factual basis. #stopthestupid” The issue of falsely claiming fraud has been attacked by both Republicans and Democrats. In this tumultuous time as election speculation only seems to rise it is important to remember what Mitt Romney said in an NBC interview in response to how a president should handle elections.“Clearly people in the past like myself have gone out in a way that says look, I know the eyes of the world are on us, the eyes of our own people, the eyes of the institutions, the eyes of history and in a setting like this we want to preserve what is far more important than ourselves, or even our party, and that preserves the cause of freedom and democracy here and around the world.”
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24 biden and us international relations By: Andrea Chow, Women in Politics On November 7th, the world seemed to unplug and restart. Leaders of nations that had maintained tense relationships with the United States for the past four years were suddenly wishing our president-elect congratulations. This comes as no surprise, as Biden was once recognized as Vice President for his inordinate expertise in the foreign policy field. Biden faces unprecedented international challenges upon entering the White House including immigration, coronavirus, trade, and militarization -- all dependent on foreign diplomacy. His policy constitutes a full "reset" of American international relations.
Biden's most prominent focus on foreign diplomacy is shifting the United States from a position of praising autocrats and dictators to emphasizing the importance of democracy. He plans to hold a summit to discuss how to best support democracies worldwide and re-build relationships with key allies Australia, Israel, Japan, and South Korea. Biden expresses serious concern that without American leadership on a democratic front, a power vacuum will leave too much room for North Korean or Russian leadership to potentially fill, dooming democracies far into the future. The Southern Border is the most prominent physical reminder that the United States is not isolated on the world stage. Trump has left a legacy of inciting conflict and outrage over border immigration policy, including building a physical wall to block migration, gassing migrants at the border, and separating migrant children from their parents in detention camps. Mexican and Central American leaders expressed clear distaste over these policy
25 decisions. Biden is a clear shift from this approach to immigration. On the campaign trail, he emphasized how his administration's decision to provide monetary aid to Central American governments decreased rates of migration to the United States. He supports temporary protected status for citizens of El Salvador, Haiti, Nicaragua, Sudan, and Venezuela. Under Trump's leadership through the coronavirus pandemic, international travel has been blocked off to and from many countries due to the United States' high infection rates. Biden plans to respond to the pandemic on not just a national level, but also a global level. He pledged to send aid to third-world nations struggling with the pandemic and has promised to rejoin the World Health Organization and work together more efficiently with the United Nations and other major world leaders. Biden will not stray from Trump's rhetoric on whether or not China caused the pandemic, arguing that they should have had increased transparency in the early stages of the spread. A bold shift away from Trump's tariff policy, Biden supports the liberalization of trade and plans to lower barriers to worldwide commerce. As Vice President, he supported the TransPacific Partnership to limit China's power in world trade. He supported both the North American Free Trade Agreement as well as Trump's renegotiated Canada/United States/Mexico version of the agreement. Biden also plans on strengthening relations with African countries to build their economies and expand the reach of American companies there. He advocates for stronger enforcement of current trade policies and protection of intellectual property. Although the United States has only been withdrawn from the Paris Climate Accords for less than a month, Biden still plans on immediately rejoining and re-positioning the United States as a world climate leader. This is a huge development, as climate discussions stalled immediately after America promised to leave since one of the most prominent climate leaders was no longer willing to discuss progress on the climate front. Biden plans to leverage America's economic power to bolster clean energy abroad, such as withholding aid for countries with coal-fired power plants and providing debt relief for countries with clean energy policies. Biden's approach to international relations offers a radically different attitude from that of his predecessor. Whether or not democracy reigns over dictatorship depends on the success of this political reset.
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26 biden's economic recovery plan By: Sara Keegan, Women in Politics COVID-19 has brought about a multitude of negatives, ranging from the millions of lives lost to the American economy plummeting to all time lows. A sense of uncertainty has blanketed the nation itself, ideas of failure and uneasiness loom over the American people. This made the 2020 Presidential Election even more significant than ever before. The two parties symbolized such different beliefs and plans, it was up to the American people to determine what was most important to them. A new idea had to be factored in, how would each political figure handle the surge in COVID cases and the shattered economy? Well, the American people had spoken. Joe Biden won the 2020 Presidential Election, thus electing him to be the 46th President of the United States. Although many are knowledgeable of his main focuses; containing COVID, providing healthcare, and raising the minimum wage, many are not aware of his plan to rebuild the economy. Build Back Better is Joe Biden’s Economic Plan, one of which aims to benefit working families during such a crucial time of unemployment and expense. Biden plans on spending over $7 trillion on initiatives such as; the creation of 10 million clean-energy jobs, housing, education, healthcare, and economic fairness. Although this may seem like a large sum of money, this sort of spending is quite typical for those in the United State’s Government, as change comes with a significant price tag. With these initiatives in mind, Biden hopes to provide working families across the nation the ability to bounce back after financially difficult times, as many have lost their jobs because of the pandemic. By providing millions of jobs, it not only aids those recently employed, but also benefits the economy as a whole, as more people will purchase goods and services benefiting businesses of any kind. More specifically, Biden’s plan focuses on the clear racial disparities during these times affiliated with both health and finance. Many Black and Hispanic Americans have suffered and died from the coronavirus at rates far higher than White Americans. In addition, Black unemployment has reached 15.4 percent, and businesses owned by minorities have closed down at shocking rates. With this in mind, racial equity is one of the pillars of Build Back Better, providing minorities with proper healthcare and the ability to access any opportunity presented to them. Some of Biden’s plans listed in “Build Back Better” that specifically aid minorities can lead to a better economic standing with access to necessities. One of the first proposals is to increase the funding and stature of the Minority Business Development Agency, which provides business consulting services and connects business owners with opportunities that can benefit their finances and exposure. Biden also promises to make public colleges and universities tuition-free for all families with incomes below $125,000. This will provide
27 education to those who historically could not afford it, allowing them to pursue whatever sort of career they dream of without the financial burden weighing them down or completely inhibiting them. This plan measures to help roughly 91% of Black households and 88% of Latino households. These are huge margins that will impact millions across the nation. Lastly, and most importantly, Biden vows to end pay discrimination in the United States. He strongly supports the Paycheck Fairness Act, which would ensure that businesses are paying their workers equally and there are no loopholes in the system. This is significant, as women of color are paid much less than white men doing the exactly same job. Joe Biden’s “Build Back Better” plan is one that covers a wide range of topics, bringing hope back to many Americans who felt as though the stability of the nation was lost. For most supporters, this plan provides them with benefits that would not be offered under the Trump administration. Biden plans to begin acting on his entire plan as soon as possible, already creating a COVID task force on November 7, 2020 that began analyzing the best way to contain the virus in the United States. 2020 has been a year full of uncertainty and worry that has impacted every person around the world. With the new presidency comes hope and the possibility of change for every American, no matter their race, gender, or sexuality.
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