"Britain's GDP per capita lower than poorest US states"

http://www.presstv.ir/detail/2014/08/27/376736/britains-gdp-lower-than-poor-us-states/

According to Fraser Nelson, editor of The Spectator magazine, Britain would fall behind the poorest of US states in terms of GDP per US state, divided by population.  This figure is surprising considering the "financial preeminence" of London; the city was recently named by Forbes as "The World's Most Influential City" due to its multitude of foreign direct investment deals.

Perhaps the most interesting part of the article is a statistic that comes from a UK charity group.  The group reports that Britain's five richest families have a combined fortune of $46.9 billion in comparison to the $46.7 billion that is shared between the poorest 20 percent of the UK population.  In the past two decades, the richest .1 percent of the UK population has seen its wealth grow almost four times faster than the rest of the population.

Even more compelling is that food poverty in the UK has recently climbed, supported by a 19 percent increase in the number of citizens hospitalized for malnutrition over the past year.

I believe it will be interesting to see how Britain chooses to address the clear economic inequality, if they choose to address it at all.

Should there be a new Buffett Rule?

http://buzz.money.cnn.com/2014/08/26/buffett-taxes-burger-king/

In this article presented by CNN Money, it discusses Burger King's recent acquisition of Canadian coffee chain Tim Horton's, and how Warren Buffett's Berkshire Hathaway's involvement may be hypocritical to his own principles of tax inversion.
Buffett has been quoted saying that there should be a revised tax code for those who make millions of dollars annually, which would result in them paying a higher tax rate, which would alleviate the tax burden on the middle class. By relieving some of the tax on middle class America, it would allow for growth and the ability to financially stimulate the economy.

In Warren Buffett's case, his recent investment in Burger King, in order to help with the acquisition of Tim Horton's, has raised a lot of concern on whether or not his investment is really a way to escape corporate tax rates in America. Those who have inside knowledge on the investment claim that it actually shows no beneficiary for Berkshire Hathaway from a tax standpoint, because his dividend yield will be coming from a foreign corporation, ultimately causing him to have to pay a higher tax rate. Despite what seems to not serve as a tax beneficiary, it has caused a great deal of animosity with Obama because of Buffett's claim on how corporations that take advantage of this tax loophole, are going about it legally, despite the poor image it gives off.

This presents the question of whether or not Warren Buffett is saying that it is OK for corporations to receive unpopular tax breaks.

Justice for jocks America’s exploitative college sports system can be mended, not ended

http://www.economist.com/news/leaders/21612156-americas-exploitative-college-sports-system-can-be-mended-not-ended-justice-jocks

In the article, Justice for Jocks, the author discusses the possibility that college athletes may be paid in the future. During a federal court case last week it was ruled that the NCAA’s ban on paying athletes for their name, performance, and or image infringed upon antitrust laws. However, it is unclear which athletes may be getting paid and how much they would receive. Elite college athletes are worth far more than the scholarships they receive, but others may not be as valuable. Whether or not all athletes will make the same amount has not been decided upon. The ultimate ruling will have to take into account the sport, gender, and university revenue among other things.

Last year alone college sports produced nearly $11 billion in revenue, more than any single professional sports market. In fact, in the majority of states (39 of 50) the highest paid public official is the college sports coach. It is evident that college sports have become increasing entertaining and profitable over the years. However, only a fraction of college athletes make it professionally and many are left with serious injuries from their tenure. An even more serious question is whether or not college athletes are receiving the proper education during their time at school?

Only 44% of men’s basketball players at high profile schools graduated in six years, far below the national average. Some young stars are eligible for the NBA at the age of 19, but there are only a handful of them. Many athletes get recruited with little concern for their grades, and spend too much time with their sport that they cannot attend class.

Potential solutions to paying athletes and improving their academic performance include providing free education and or covering athletic medical expenses. This would help support the term student athlete and relieve much financial stress. Still, a lot has to be figured out, but the future is bright for college athletics and the athletes that play the games.

Closing The Gap

http://www.economist.com/news/finance-and-economics/21596529-americas-labour-market-has-suffered-permanent-harm-closing-gap

                  This article talks about how the American Labor market might have gone through permanent damage, regarding the labor supply. The chairman of the Federal reserve, Janet Yellen concluded that she would consider more than just the unemployment rate to consider whether or not the labor market is complete. She further added that the labor market is currently "far from complete".
                 The article further shows that from 2007 till 2009 the proportion of people with jobs declined from 63% to 59%. This just means that the output gap has not closed at all. However, if the unemployment rate of those years is looked at, it is at the "natural rate" of 5.5% suggesting that the output gap has disappeared and finally looking at those unemployed in the last six months of that time shows that the output gap has closed up completely. These are three different ways Nomura Securities, a bank used to calculate three different labor market indicators.
                  The article also suggests that the output gap might be overstated for the Fed's purposes mainly because of the fact that people unemployed for a long time do not get much attention from recruiters even though they might be actively searching for a job.

Near-Zero Interest Rate Policy

http://thehill.com/policy/finance/economy/215802-yellen-vague-on-rate-hike-plan

The Federal Funds Rate, the interest rate at which banks with balances at the Federal Reserve borrow from one another, is one of the most important interest markers in the U.S. economy. It serves as a point of reference for other interest rates and has profound influence upon overall economic activity, helping to both stimulate the economy and control inflationary pressures. When the Fed wishes to spur economic growth, it reduces interest rates, when it seeks to dampen economic activity, the inverse.

The current target for short-term interest rates is between 0% and 0.25% as set by the Federal Reserve. Responding to the 2008 financial crisis, the Fed swiftly pivoted to ratchet down the Federal Funds Rate to near zero, seeking to bring rates as low as possible to keep the economy afloat as well as to help banks earn a higher “spread” between borrowing and lending rates. Since 2008, the Fed has kept rates in this 0-0.25% range, believing the U.S. economy incapable of sustaining positive growth without continued central bank stimulus.

            In their article, Peter Schroeder and Vicki Needham suggest that the days of near-zero interest rates may soon be a thing of the past. Amid a recovering yet still complicated economy, Federal Reserve Chairwoman Janet Yellen must determine not if she should raise interest rates, but rather when. On one hand, we can see that the economy has clearly improved: more jobs have been created than were lost in the recession and unemployment rates have dropped from nearly 10% to 6.2%. It should be cautiously noted, however, that it took five years to reach this point and that the labor market is still not fully recovered.

            When it does finally decide to raise interest rates, the Fed will likely take a slow, deliberate approach. Most economists predict the initial increase to occur mid-2015, with a 30-month window between the first and last rate hike. I believe that a near-zero interest rate policy should be judiciously implemented in times of economic hardship. If the Fed considers the economy to be fully recovered, I believe it should raise the interest rate as soon as possible. I am interested in the various pros and cons associated with the speed at which interest rates are raised, why the Fed will likely take a slower approach and the reasoning behind it. 

McDonald's faces 'millennial' challenge

http://finance.yahoo.com/news/mcdonalds-faces-millennial-challenge-010500618.html

McDonald's sales have been stagnating for the past few years in many of its global locations. Its share of customers between 19 to 37 has drastically been decreasing. It is likely that those customers have switched to the "fast-casual restaurants" such as Chipotle or Panera Bread.

 A strategy for McDonald's to include the younger generations into its regular consumer base while not alienating many of its current customers is essential for it to continue to compete. As of now, McDonald's hopes to reach out to the younger customers by revamping its public image. Many ideas are being considered by the company, including purchasing a growing "fast-casual" chain, but nothing is certain yet.

Government Spending

http://blogs.wsj.com/economics/2014/07/30/one-big-factor-in-the-economic-uptick-government-spending/


        In the article One Big Factor in the Economic Uptick: Government Spending, Josh Zumbrum talks about and illustrates the government spending being it federal or state and how the total spending has gone down forcing budget cuts in the necessary fields. One may think that government spending decreasing is a positive because we are in so much debt but in reality it lows the GDP and our economy can't keep growing.

The spending between state and government needs to be overlooked in a way where they aren't spending money on unnecessary items, and they don't spend too little so our GDP can keep growing and

One in three Americans are spending too much on rent

http://money.cnn.com/2014/05/01/real_estate/rent-spending/index.html?iid=SF_E_River

 

One in three Americans are spending too much on rent

 

Out of three Americans now live in a housing market where rent for a three-bedroom home eats up more than 30% of the monthly median income. And, they reduce their food expenses, health care and retirement to put together money for renting the house. Generally speaking that percentage is high. Laura Bailey say that this trend can inhibit them from saving money for a down payment on a home and this trend clearly happens in poor families.

 

 The foreclosure crisis turned millions of former homeowners into renters, and now renters are suffer from their rent. Although the economic statistics such unemployment rate and GDP show good sigh that the economics of U.S keep recovering, the problem of the recession has not ended.

U.S. economy stalls dramatically in first quarter

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/30/u-s-economy-stalls-dramatically-in-first-quarter/

According to the government data released Wednesday by The Commerce Department, U.S. economy didn't make any progress during the first months of year. The failing to the modest growth target brings up people's concern about the recovery of economy again.

Government expected 1.2 percent growth for nation's gross domestic product but it turned out to be merely 0.1 percent growth rate, which really disappointed people.

Althought Paul Ashworth, chief U.S. economist at Capital Economics, said "This is not a weak economy. This is an economy that had two bad months because of the weather and got back to normal in March." I don't really trust what he said. In my opinion, the economy is still sluggish and especially the job market is not as good as we expect.

The U.S. Government Lost $11.2 Billion Bailing Out GM

The government lost approximately 11.2 billion dollars in total when it bailed out General Motors. This loss came from multiple sources. The government lost $826 million when they wrote off old GM investment, and when the government originally bailed out GM it cost them approximately $50 billion. When GM went into bankruptcy in 2009, the governments original investment had been converted to a 61% equity stake, preferred shares and a loan. To make sure the governments investment in GM did not become overwhelming, the government sold stocks of it.  Even though this bail out cost the government a lot of money, it saved 1.5 million jobs domestically. 

http://www.huffingtonpost.com/2014/04/30/gm-bailout-cost_n_5240260.html?utm_hp_ref=business