Are Higher Payroll taxes the Solution to the Social Security Issue?

Some people think that raising payroll taxes will not help the social security crisis. In the position that the US economy is in right now, working toward a solid recovery from a recession, that raising taxes would not be a good solution . Americans would, in that case, not be able to contribute to stimulating the economy to their full potential because they would have less disposable income, therefore  the positive reactions experienced with the multiplier affect would be minimal. The main problem is that social security is unsustainable. The deficits started in 2010 and its trust fund will be depleted by 2036. At that time about 25 % of the social security benefits will be cut. Among some lawmakers raising taxes seem to be on the top of their solutions list. Right now employers and employees each  pay 6.2 % for social security and medicare. If the tax increase were to happen employers and employees would have to split an increase of at least 2.2 %. Raising taxes will further hurt the economy in this situation because employers would then be discouraged from hiring new employees, they would cut labor, increasing America unemployment rates. With my knowledge of the situation I would agree that right now wouldn't be the best time to raise taxes. If in the future our economy has experienced some growth, maybe raising taxes would sound a little bit better. But I  think that right now that government so thoroughly be exploring other options.

ObamaCare- Oligopoly?

A commentary by Merril Matthews on Forbes.com, written about a year ago, suggested that President Obama's new health care plans would create an oligopoly with insurance companies. The main issue from the commenters point of view would be that having fewer insurers would create this oligopoly that would lead to higher prices for healthcare. It is true that in an oligopoly that firms have control over their own prices and most often will try to maximize profits. But also when talking in terms of these kinds of markets, unlike monoploies, oligopolies have to take into consideration what their competition is going to charge, and how they may react to changes in one firms prices. The problem is that many times companies do not know what their competition is going to do so they have to go by what they think will happen and what they think is the best move for their own self-interest, this is called strategic behavior. In the ObamaCare situation i'm not sure if the prices have risen overall, but with control over prices in an oligopoly, and also having mutual interdependence in the equation, it is a possibility that these healthcare firms will have a range of prices suitable to consumers. If the prices were higher overall, i believe that their still would be prices on the lower end of the stick. Also the commentator spoke about the barriers to entry in the example. Apparently there were regulations set in place by the government where there was new state created and controlled "markets" where people and small companies will buy coverage, basically set the rules and decide the winners.

Price Discrimination with Kids Menus?

I found an article online that claimed that restaurants practice price discrimination by having kids menus and by charging cheaper prices for those items and not letting adults order from them. The definition of price discrimination is the selling of a product to different buyers at different prices when the price differences are not justified by differences in cost. Now when I think of price discrimination in a monopoly, it is about one uniform product or service. Often times kids menu items are way smaller and not as taxing to prepare or most likely do not include as expensive ingredients of that in an adult meal..its like comparing a small portion of chicken fingers and fries to a full course meal for an adult that might often include a appetizer, entree and even dessert. In my opinion this is not a good representative for price discrimination because clearly the units in comparison are not the same or uniform in a sense. My main argument would be that in most cases the kids meals are smaller and are cheaper for the restaurant to produce compared to adult items, which of course would cost the restaurant more money and effort to make, which justifies the cheaper kids meal prices. It would be different if the adult items and the kids items were identical in portion and were on the the same accord as far as how much and what exactly is being served..but as far as I know, as of now there is a significant divide between the two.

Google

In March 2001 Google's market share was about 90.1 %; We could pretty much consider Google as a monopoly. This was different than what U.S society was used to in the 90's because then we had Excite, Ask Jeeves, Likos, etc. At the time many thought of Google's search results as superior compared to its competitors. From this Google became more popular, so popular, that its brand began helping the company take control of the "Search Engine" market.

But now is Google taking second place to Bing?

From my research I have found that Bing isn't quite taking the place of Google just yet...But, Bing is growing slowly more and more. In January Bing received more "hits" than Google; Some people have been claiming that Bing offered more accurate results. Personally I've used both and have found much difference in results.

There also has been some drama between the two competitors. Google accused Bing of monitoring its search results in order to make their own search results better.

In closing, I don't mind if Google and Bing transitioned to be on the same level as one another, although I know Google  take a huge loss, and Bing a huge gain. Monopolies to me, in a sense, limit choices anyway and for the user that is not always a good thing. I believe if people aren't having success with one thing that they should be able to have choices.

Sources: Business Insider
247 Wall St.

Fair Trade Products

Fair Trade products are products that are brought directly from producers in low income countries by the U.S to help stimulate their economies, by cutting out international trade. To be deemed Fair Trade the producers themselves have to make sure working conditions are well and healthy and must be paying their employees sufficient wages. By using this Fair Trade system the U.S is suppose to be creating more jobs by securing and increasing demand for these imported products directly from the producers. Some of these Fair Trade products include coffee, wine, bananas, tea, fresh fruit, cocoa, and vanilla beans. This system was created to keep producers from paying their workers extremely low wages and to keep them from pocketing too much of their profit. This plan, in fact, has succeeded in its efforts. It has raised wages for some sellers and some workers in low-wage countries. Some economists worry about the effects on a broader economic scale. Some of the main concerns are that the views of fairness by these Fair Trade advocates seem to be highly subjective and not economically realistic.  Some even argue that it may hold some of these producers back, seeing that they already are making a good profit off of these higher prices products, from expanding their operations to more efficient ways of production, whether it has to deal with employment, new technology or whatever.

In my opinion the Fair Trade system is a good one that will help countries that are poorer than us. But there is always the side that has to think about the issues within our own country and whether we should devote more to helping ourselves before we always try to go out of our way the help others.

Price Elasticity of Demand: Decriminalization of Illegal Drugs (pg 130-131 in Meier text)

The text has an excerpt about the legalization of drugs and how it would affect their elasticity. The article has two different perspectives, one that agrees with legalizing drugs and one that doesn't. One side argues that the legalization of drugs will not change the inelasticness of the demand for drugs, that regardless what the price people will still have the same demand for them, and if it were to increase, it would only be slightly. If drugs were to become legal it would reduce drug trafficking and would help problems that arrive from trying to deter selling and using of drugs like, enlarged police forces, overcrowded prisons, overburdened court systems and human costs.

In contrast, one the main arguments of the opponents of legalizing drugs are that drugs are in fact, elastic; Drugs in fact would sell more in the price went down because of them being legal. They claim that "occasional users" that may not do drugs all the time because the prices are high and because drugs are illegal, may do more if the prices go down. These users often use substitutes for expensive drugs, such as alcohol. Overall, from this perspective people feel that drugs will become more acceptable to society, therefore increasing the demand.

I can see the pros and cons of both sides. I believe that legalizing drugs would prevent a lot the the hassle associated with illegal drugs. People who do drugs are going to do them regardless if they are legal or not. Drugs are a sickness and are associated with psychological and physical issues on why they choose to do them. On the other hand the idea of not making drugs legal because these "occasional users" may use more is not as logical to me as the opposing side. Personally I don't believe in occasional users, all addicts have problems no matter how much they use. If drugs were to become legal, if these people only use drugs sometime I would assume that they will continue to only use drugs sometime, no matter the price.

Post 2- Chevrolet Volts

Right now the market for automobiles is down, a minor or major reason could be the extremely high gas prices, although in the last couple weeks gas has gone down a little. Despite the overall drop in automobile sales, one car in particular is becoming very popular, the 2011 Chevrolet Volt. The demand for the 2011 Chevrolet Volt is rapidly increasing. Of course if the demand is increasing, prices are rising. Apparently the price tag on this vehicle has not went up just a small amount of money, but in some cases $10000 up to $20000 above the suggested retail price. One reason that the demand has gone up for the Volt is because it is fuel efficient, having capabilities of 37 mpg on gasoline and 93 mpg equivalent on battery power. The demand of this vehicle has created a shortage in the supply, another reason for the inflated prices. In addition to the current shortage GM has made a decision to only produce 10000 Volts this year which will likely increase the inflation on the vehicles price even more. Even with all the competition found in the car dealing industry prices are still clearly over the top. To consumers $44,995 for the Volt is a good deal found at Glendale Hyundai , compared to the $51,999 at a Town and Country Chevrolet.

Microeconomics- Post 1

People have unlimited wants and there are limited resources, so people have to make choices on what to buy with their income by evaluating marginal benefits and marginal costs. I would like to share my thoughts on a craze of today...healthy food, in this case, healthy snacking...on ice cream. Everybody these days seem to want low Carb, low fat, sugar, calories..low everything, if not sugar free calorie free, etc. Consumer's tastes are changing to this healthy ice cream ( for example, my employer, D'Lites). This change in demand has been triggered by Americas need to decrease the obesity issues or people who are just trying to lead healthier lifestyles, which is understandable, everyone deserves a treat sometime. As people become more health conscious D'Lites is growing more and more. Therefore there is a shift occurring to the right on the D'Lites demand curve per se.

With that being said, I would like to add that I took notice to a new ice cream shop that has opened up a mile away from D'Lites. My first thought was "ooohh..competition"; But theres nothing wrong with that, competition is a main aspect in a market economy, and many aspects come in to play, such as taste which I've previously talked about, price, demand, supply, income, many things really. Specialization also is a key point. D'Lites specializes in Healthy ice cream and other healthfood products and this new shop does not, so in the long run that could be an advantage if that's the direction that consumers tastes stay in, which for now im predicting that it will, but who knows.