The Year 2024

It's the year 2024 and I'm 28. The government realized the of the Bush tax cuts and the other expenses the government couldn't afford to pay for after the United States fell off of the fiscal cliff in 2012. Now, there are increased tax rates for everyone and the wealthy are paying their equal share. The tax code has been rewritten to rid it of tax loopholes in order for the government to gain more income from Americans. Some government assistance programs have been cut to save money. In result, Americans have become less dependent on the government and more reliant on themselves to fund necessary expenses. Another thing that's changed are the financial responsibilities of Americans. All the expenses we used to rely on the government for are funded by ourselves, which has led to an awareness and necessity to bank responsibly save and maintain a balanced budget.

As a result of cutting back on money consuming programs, the national debt has decreased, but there still is three trillion dollars in debt. Currently, there is a steady decrease in the deficit. America has become aware of the mistakes the past governments and presidents have made and have taken what they've learned from those mistakes into account. By doing this, the government has been able to execute a plan of action and is setting aside a larger amount of money to be used in an emergency situation. Although these past years and the few years ahead have been and will continue to be rough as Americans have to shell out more of there income, being able to rid of our large amount of debt has amounted to a happier, more optimistic and economically satisfactory America.

Now that the debt seems to no longer be an economic issue, what regulations and provisions will be imposed on Wall Street to avoid another housing market crash or economic disaster, which could cripple America again?

The Benefits of Honda's American Operations

The American Honda Company has contributed greatly to the economy of the United States by bringing the production of American Honda products to the United States. As a result, they have contributed to the growth and employment of many Americans within the seven states they mainly operate in and other states that deal with smaller Honda operations. Their presence in the U.S. has also aided in the growth of other American companies that produce industrial products for automobiles. By bringing factories and other operations of American Honda products to the United States, Honda Motor Company has had a positive impact on the economies they serve.

The seven states in which Honda mainly operates are: Ohio, Alabama, California, Georgia, Indiana, North Carolina and South Carolina. Overall, Honda has created more than 165,000 manufacturing and retail jobs in these states since American Honda Motor Company was first founded in Torrance, California, where their headquarters operations are located, in 1959. In Ohio, Alabama, Georgia and Indiana—automotive manufacturing and research and development operations occur. In South Carolina—engine manufacturing and other research and development operations occur, while in North Carolina—engine manufacturing, other research and development operations, and aerospace operations take place. Although these operations may seem to only benefit the states they’re located, but these operations have a ripple effect, or spin-off, which creates more jobs within the U.S. economy.

In 2006, when it was announced that a manufacturing plant for Honda Civics would open in Indiana, the economic effect of this new plant was not projected to only benefit Indiana; it was projected to be more economically beneficial within the neighboring states, such as Kentucky and Ohio, as well. It was predicted in a study compiled by the Center for Automotive Research for Honda Motor Company that in 2010, there would be a total of 6,480 jobs created in Indiana and an overall 12,840 jobs would be added to the U.S. economy from the new manufacturing plant. This is a great example of the effects one of Honda’s operations in a single state, can have on surrounding states. Now that the factory has been built, it is said that because of every one job at that plant, an additional 5.4 jobs have been created nationwide. With all of the jobs and operations of Honda Motor Company in the U.S., additional jobs have been added to the national economy because of the outside workers Honda hires to transport manufactured parts to assembly plants and outside research facilities that investigate new technologies. Honda has not only had an effect on their seven, main operation states, but they’ve also impacted the United States as a whole.

Nationally, Honda has created 233,701, direct and intermediate, private sector jobs in Honda operations and paid out more than $17 billion in wages and salaries to workers. In turn, some of the $17 million is spent in the economy and beneficial to its growth. Also, for every one job at Honda factories or its dealerships, there are an additional 1.9 spin-off jobs in the economy. That means that an additional 133,982 jobs created from that spin-off has been created in the U.S. Overall, Honda has created a total of 367,683 private sector jobs from all of its operations in the U.S. On Honda’s ‘Honda in America’ website, facts and statistics about their U.S. operations are listed and explanations of the effects Honda’s U.S. operations has had on America’s economy from 1959 to 2011 are there too. A shocking statistic on the site is that from the 7,000+ Honda automotive manufacturing jobs, there are an additional 2,000+ jobs in the manufacturing industry of other products, such as plastics and metals, to be used in Honda products. The manufacturing processes that Honda utilizes have not only created improvements to their operations. These processes have contributed to improvements in productivity of the automotive and other major U.S. industries that Honda works in, also. Honda also uses its U.S. plants to export products and parts to other countries. In the five years recorded, which ended in 2007, Honda exported nearly $200 million in power equipment and multi-purpose engine products to over 30 countries. Unfortunately, since these plants that export these products or located in the Carolinas, the impact of these exports are mainly felt in the surrounding areas and not the U.S. economy as a whole. The export of Honda vehicles from the U.S. since 1987 has totaled over one million. Honda has been able to expand and not cut any American jobs since the Honda brand has grown in popularity.

With such a strong company and the direct and indirect employment of over 300,000 people, it’s no surprise that Honda has been able to not lay-off workers in the 50+ years it’s been operational in the U.S. Indirect employment from Honda’s more than 50 suppliers has created expansion in those suppliers’ businesses resulting in thousands of jobs being created by the indirect actions of the American Honda Motor Company. Another fact is that 85% of all Honda and Acura vehicles sold in the U.S. are manufactured in the U.S. creating sustainable jobs in a country where unemployment is still high. Since Honda has produced vehicles with the fewest defects, less money has been spent on fixing the problems. In turn, more money can be used towards the advancement of technologies and the expansion of Honda in America potentially created thousands of jobs.

Honda’s U.S. operations has resulted in a significant, positive impact on our economy. Without those operations, hundreds of thousands of jobs would have never entered the U.S. Since Honda has created thousands of jobs from spin-off, other industrial companies have expanded and created more U.S. jobs. From Honda’s ingenious strategizing, other companies could learn from a motor company that cleanly executes its operations to have the biggest impact on the economies it influences.

Works Cited:

"Homepage." Honda in America. Web. 28 Nov. 2012. 

"Honda in America - Economic Impact Study." Honda in America - Economic Impact Study. Web. 28 Nov. 2012. 

"Parts & Suppliers." Honda in America. Web. 30 Nov. 2012.

The Fiscal Cliff

The fiscal cliff is an automatic $500 billion tax increase and spending cut "crisis" that was produced by past presidents and Congresses in order to force leaders to come up with a tax and spending budget. In order to avoid the $500 billion in tax increases and spending cuts, President Obama and Republicans must reach an agreement on how to reduce the deficit. Some of the reasons why leaders can't come up with a plan are their differences on the Debt Ceiling, the AMT (Alternative Minimum Tax), the other tax related programs, such as the Payroll Tax Holiday.

The Debt Ceiling and the the AMT are all a matter of whether or not they should be adjusted. Leaders are debating if the Debt Ceiling should be raised or kept as is to prevent more debt from accumulating, but, they say. where will all the money for spending on programs and the military come from? The AMT is not selective to only the wealthy, but can effect those with low income. It depends on what your tax returns say and that can cause many to fork over additional money to the regular income tax amount. Leaders are debating on whether or not to alter it so it affects the wealthy and not low income families in order to prevent them from being victimized by the AMT.

Additionally to the AMT, the payroll tax holiday is on the chopping block.This helped the economy to rise to where it currently is. Without it, families won't be able to splurge or invest extra money into the economy. Many fear that'll have to be cut since it costs $95 billion each year. Despite that being a small loss for Americans, there are definitely other larger and higher tax rates potentially coming our way. The loss of the payroll tax holiday compared to the other tax increases appears to only be a small loss.

Overall, the U.S. will fall over the fiscal cliff if the President and Republicans don't agree on a way to reduce the nation's deficit.

My Manifesto, yo!

The government's role in economic activity should be minimal. Their role, overall, should be to set regulations for corporations use of the economic system so consumers won't be overtaken by corporate greed. In the event that the system is abused, the government should step in and resolve the issue through the use of the justice system and the should step in and temporarily control and manage the economy when it takes a downturn. And with the bailouts that have occurred, its alright for the government to do so if the money used if from an emergency fund not from other essential services that Americans need.

In the current situation of unemployment, the government should provide assistance to those who are unemployed for a limited period of time to lessen any other potentially harmful effects unemployment could have on the economy and the livelihoods of those affected. Since the government governs us, it's their responsibility to take care of use when we are hurting, but not for an extended period of time. An eventual complete cut off needs to be in place to prevent abuse of the system since some people may feel that the government will provide and they don't have to search for a new job. When it comes to aiding citizens in the search for work, the government should provide tools for people in search of a job and maybe have free online tools on how to build or polish off a résumé and how interview for a job. Just providing these basic skills can help those unemployed.

Taxes should be collected by the government since they provide services to us. The current tax system works fine, but what is a major flaw are the tax breaks the wealthy get. Logically, if you earn more money, than you generally pay more for everything. This should also apply to taxes. Just because their loosing more income per year to taxes does not mean the wealthy will not be able to sustain the lifestyle they treasure. If the wealthy contributed their fair share of taxes without going through loop holes and other ways to avoid paying more taxes, our government would have more money to pay off the debt or for other public services.

Minimum Wage

A Federal minimum wage should be enforced by the government because it is in the interests of those employees who receive these minimum wage paychecks. However, there should be some regulations and exceptions to this. Teenagers who are seeking a job to earn extra cash and experience the responsibility of a job should receive a lower Federal minimum wage, such as $5.25 per hour, which is set for working people of the ages 13-17. The Federal minimum wage for all other workers 18 and older should be raised because, most likely, they are working to help pay for a college education or to be able to pay bills, support a family, and meet the standard of living. A minimum wage that appears appropriate for these needs would be $8.00.

Price Floors

Price floors should not be enforced by the government because it seems unnecessary to apply price floors to goods and services that we purchase. Since a price floor raises the price of the product above the equilibrium price, it causes consumers to fork over more money for a product they would otherwise be willing to pay for. This would result in less demand and excess product for the company to deal with. If a producer of a good or service would like to set their product to a ridiculously low price, they should have the right to because it would benefit the few who are able to purchase the small supply of the product that would be available.

Price Ceilings

Price ceilings should be imposed on technological products such as computers and laptops so these products can be available to the lower class so they can be provided with technologically skills that are necessary in this type of job market. Although this would cause a shortage in supply to everyone demanding computers, the tech skills gained through the computers purchased would benefit our country and the individuals who are able to secure a higher wage job because of these earned skills. If this ceiling was imposed for an extended period of time, the companies would eventually be able to conform their supply curve to the new demands and may even be driven to lower the cost of manufacturing computers, through better engineering and design, to make up for the lack of profits earned.

Supply Wrap-Up

Demand Finale

I have personally exhibited purchasing a Substitute Good, which is a good that a consumer purchases in place of another one that has become less affordable. In class, we learned that since the income of that person remains the same, they are driven to purchase a cheaper substitute when the price of the original good rises. In result, the demand for the other product goes down if this becomes a trend among consumers.

Last week I needed to buy sticky notes for an English assignment. I was searching for a stack with a price below $2.00. I found some for more than $2.00 and wasn't willing to purchase that brand for that much with very little product. I searched some more and found substitute sticky notes for a cheaper price and they worked out great. This exhibited my use of a substitute good because I purchased a cheaper product, which served the same purpose (or utility) as the other good, in place of the more expensive product.

Question: When an original product is substituted, does it mean that the original product has elastic demand?

Demand Wrap-Up

Elastic and Inelastic Demand

Headlines

Complimentary Demand: Government requires every household to own dogs; owners barking up pet food companies' "trees".

Substitute Demand: Study indicates carrying backpacks is damaging to teens, rolling backpacks now trending.

E l a s t i c Demand: Carbonation of water now inexpensive, soda sales bubble over.

Inelastic Demand: Price of cereal rises with corn, parents pulling on "ears."

News Article:
What comes to mind when you think of corn? Processed foods? Bread? What about pet food? The truth is that it's in most processed foods, and with the price of corn on the rise, foods such as cereal and bread and those fruit juices and beverages become more expensive. And with many kids eating cereal as their daily breakfast meal, it is expected that the demand for cereal will not fall drastically. Sheila, a mother of four commented on the topic, "Another thing to fork over more money for, but I'm going to do it since there is, at least in my family, no alternative for breakfast. We just don't have time to actually cook a meal." From market experts, we've heard that they don't expect a negative effect on the market from this uprising news. "Corn is in many things and people aren't aware of it. They may not purchase corn directly but by purchasing other products, such as cereal, they're keeping up the demand of a highly demanded resource." Although you may not know it, the demand for corn, even when the price rises, is virtually unwavering.

Demand Curve

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The Market Economy System

In a market economy, an outstanding strength, to me, is the people being a part of the decision making. We do help steer the economy in terms of what to do with scarce resource and we also have a voice in the what the economy does. That's important to me because I feel that not a few powerful individuals should be able to say what our needs are.

A weakness, or disadvantage, that I believe is a major flaw in a market economy system is that those who are dependent on others for their well-being (young/old people and those who are terminally ill) don't have all the services required to meet their needs. All the other people in society and those dealing with the economy or more focused on what the demands are of majority of the population that they forget about those who are usually not present in the face of our economy. To me, that is something that we need to place more focus on when we're dealing with the economy.

Overall, the best strength of a market economy is our ability to each have a voice in the way the economy works, but with that also comes the disadvantage of not meeting the needs of the neediest people in our society.

Question: Is the government the only organization that sets aside money for programs to help the elderly?

Opportunity Cost

A time I had to make a choice concerning opportunity cost was last spring. I had to make the decision of entering into the Honors Program or the IB Program. Both included advanced courses and IB classes, but IB is more rigorous than Honors.

When I made my decision, I weighed the two options. If I chose to go with Honors, the opportunity cost would've been the full benefit of an IB Diploma such as potential credits for college (could save money on college classes), development of skills (especially writing), and, of course, the Diploma stating that I had made it through the most advanced program provided at school. But, if I chose IB, the opportunity cost would've been a better social life, easier schedule, and more free time. I was stuck and had to not choose what I wanted but what would ultimately benefit me even if it was challenging at times.

In the end, it came down to taking the easier route and not pushing myself to my full potential or challenging myself and pushing through the assessments of a more advanced program while developing essential skills. I measured the affect on my future and realized that developing some of the crucial college skills now, would pay off in the long run. When I have to make crucial decisions, I consider my wants and needs. More importantly I take the long-term affects on my life into consideration .

A question I have concerning opportunity cost is: Do economists consider all possible factors in a major decision or do they only consider the more important factors at hand?

IB Diploma Program Logo

Scarcity

http://musclecarclub.com/petrol/free_gasoline_prices.jpg

A scarce resource in my life is gasoline. My family and I use it all the time when we travel or just drive around town just because. With high demand for oil world wide and it being a non-renewable resource, it's supposed to run out in my lifetime. (This website has the days left until the end of oil worldometers.info). And without gas, what will we use to fuel our cars.