Government Shut down??

The government is planning on having a “government shutdown” starting in the up-coming months.  The government shutdown is a situation in which the government stops providing all but "essential" services.  This happened once before in 1955, under the presidency of Bill Clinton.  During the shutdown, Clinton’s approval ratings fell significantly.  The public blamed him for the bad things that had happened, but his approval ratings ended up rising to the highest they had been since the election.  Positive impacts of the government shutdown included the balanced-budget deal in 1997 and the first four consecutive balanced budgets since the 1920s, so why is the government not revealing the projected outcomes of this government shut down?

                This government shut down will be run by President Barrack Obama.  This government shutdown will not be the same as the one in 1995; we are a different country with different economic struggles.  In our economics class I’m learning more and more about the different aspects of economy, not just “economics is about money”.  Thinking about this “government shutdown”, I’m not really sure how it’s going to help our economy.  When we learned about the economic goals of the United States, we learned about full employment.  Full employment is when our economy has reached 95 percent employment.  How can we maintain that goal if we have a government shut down? Wouldn’t people lose their jobs due to this government shut down? 

                In the article I was reading, Groshen, the Bureau of Labor Statistics commissioner, says that they would release the jobs data if the White House budget office authorizes it, so why won’t they release it?   The government has not labeled the release of economic data as essential and necessary to produce in a shutdown.  Nearly all of the agency’s 2,400 employees will be part of the government-wide furloughs.  The Labor Department said it is prepared to release its weekly unemployment data, as scheduled on Thursday.

Someone posted a “spoiler note” in the comments of this article saying,” Spoiler alert...more jobs created...90% will be part time. This economy is roaring back!”  This comment caused great controversy on the webpage.  If that were to happen, the public would be forever grateful, let’s just hope that that is what happens. 

                I’m not really completely sure about what the “government shut down” is going to bring for us, but I’m anxious to find out how it effects our economy, hopefully in a good way.  

Do we all really pay taxes? Or do some people get special treatment?

“Beanie Babies creator pinched for tax evasion”

By: James O’Toole

September 18, 2013

CNN

Do we all really pay taxes? Or do some people get special treatment?

                Taxes, by definition, are a compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.  People pay taxes on everything.  We pay taxes on food, clothing, gas, and housing, but does everyone have to pay taxes?  Do those filthy rich movie stars and business people have to pay taxes like we do?  Some people wouldn’t think so… why not?! They make a whole lot of money, it’s their special treatment.  The truth is that all persons are supposed to pay taxes, supposed being the key word in this sentence.  Some people try to get away with not paying their taxes such as Ty Warner.

                Ty Warner is the owner and founder of TY Inc., which hit it big in the 1990’s when Beanie Babies became some of the nation’s hottest toys and collector’s items.  Prosecutors say Warner stashed over $93 million in an account with UBS bank in Switzerland. Ty Warner is accused of failing to pay $885,300 in taxes from 2002.  That is $88,530 a year that he didn’t pay.  On top of all of that he is being charged a civil penalty of $53.5 million for failing to report the account.  That was part of his plea agreement.

                Gary Shapiro is the U.S. attorney in for Northern District of Illinois.  He claims that Warner went to great lengths to hide this income in the Swiss Bank.  He states, “Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report.”  That answers the question I stated in the first paragraph. 

The traditional tax evasion charge carries a maximum penalty of five years in prison and a $250,000 fine. 

                Even though we don’t see Beanie Babies in the stores as often anymore, Ty Warner has an estimated net worth at $26 billion.  This just goes to show that no matter how rich you are you still have to pay taxes.  Taxing is an issue all around the country, but we all become equal when it comes to paying them.   There was even a classic life lesson imbedded in this story! Honesty is the best policy! 

Peru's Economic Battle

As a Boom Slows, Peru Grows Uneasy

By. William Neuman

Published: August 19, 2013

The New York Times

                It feels great to have something going the way you planned, that’s how Peru felt from 2002-2012.  Peru’s economy was booming.   Peru was “full of imported items like television sets and brand-name clothing bound for the growing number of malls that serve this country’s burgeoning middle class.”  That would relate to the term supply and demand, from what we have been learning in class.  Also, the shopping malls were filled with people spending their money on items they wanted.   The people of Peru, being the consumers, are what kept the economy strong. 

                A main reason why the economy got better was because the population sky-rocketed.  During the time period of 2002-2012, the economy grew an average of 6.4% a year.  That made Peru one of the world’s star economies. 

                What we may not know about the economy is that if one countries economy downfalls it can affect other countries as well.  When China’s economy hit a slowdown it affected Peru’s economy as well.  Sadly, Peru’s economy started on a downward spiral, apparel and agricultural products plunge at the same time imports were surging.  The economy is getting to a point to where they only estimated it to grow 5%, instead of 6.4%.  That’s a far drop. 

                Growing 6.4% for an entire decade and then suddenly changes isn’t good for Peru.  Nobody likes change.  Last week, my schedule got changed and two of my classes were switched.  My schedule got changed right when I started to get comfortable with the class.  I had to change into a new class with different students and in one case, a different teacher.  Just imagine how Peru felt when their economy dropped, prices went up and not as many things were being imported. 

                Mr. Humala, after his annual Independence Day speech, told the people of Peru “the world is going through a tremendous economic crisis, and the crisis has come to Peru.”  He promised to bring the benefits of Peru’s economic growth to the millions who have been left out.  He wants to comfort the people during this time of need.  As stated in the article, the people’s trust is thin.  Many in the business community were relieved that he had not made major changes in the economic policy.  The people just want to make sure they will have economic stability.

                This article showcased many of the economic terms that we have been covering in class.  I felt as if this were a good article to present for the first blog post.