JerichoHill
Bedrock of Knowledge
No problem. Ask questions anytime. While I have an obvious free-market slant, I think its always good to know the other side's counterpoints and I will happily provide them
Ask an Economist (Post #1005 and counting)
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No problem. Ask questions anytime. While I have an obvious free-market slant, I think its always good to know the other side's counterpoints and I will happily provide them
JerichoHill
Bedrock of Knowledge
Delsully asked about depression, not recession. Last I checked I think 50/50 on recession is correct. We're in an economic slowdown right now, but we haven't had two quarters in a row of negative growth yet. I personally am more bearish and think we're going to get something that's worse than 99-01 but tamer than 91. (last two recessions). As for a depression, I'd say there are long odds right now, but certainly there's always a chance the financial fallout that we're seeing now carries on longer than expected.
Integral, sorry I missed those two questions. I'm in favor of increasing the consumption tax for gasoline (for non-mass transit vehicles, which include all vehicles over two wheels). I dont know if we can accurately quantify the enviromental benefit, but surely decreased consumption (and therefore reliance on overseas trade with hostile nations) would have some benefit. The question as to whether the longterm gain is greater than the short term cost is answered by how big of a tax we're talking about!
I believe that in the long run such a move would be beneficial as the US stands a good chance of cracking the next energy nut (whatever that is). It would put a very big crimp on in the short-term, and with the economy heading towards a probable recession, may be akin to slamming the brakes too hard.
delsully
Prince
What signs are there that we are going to pull out of this "financial fallout"? And why is it expected not to last?
Martacus
World's Greatest Warrior
I've got a little economic question here:
I've got some savings (around $1,300; adding about $750/month) and about $2,200 in a 9-month CD. I've also got a fair amount of debt accumulated, between student loan payments, car payments, and monthly expenses. I can make my payments and everything, but with the sudden downturn in the value of the dollar, I'm wondering what I should do with my savings. Should I keep it there and wait out the drop in value, or take advantage of the low value (not to mention my late start in saving some money) and pay off a big chunk of my debts? Or should I take that saved money and put it somewhere where it will holed its value better?
I've got some savings (around $1,300; adding about $750/month) and about $2,200 in a 9-month CD. I've also got a fair amount of debt accumulated, between student loan payments, car payments, and monthly expenses. I can make my payments and everything, but with the sudden downturn in the value of the dollar, I'm wondering what I should do with my savings. Should I keep it there and wait out the drop in value, or take advantage of the low value (not to mention my late start in saving some money) and pay off a big chunk of my debts? Or should I take that saved money and put it somewhere where it will holed its value better?
Godwynn
March to the Sea
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What is your age?
Martacus
World's Greatest Warrior
Uh, 27. A bit old to have so little stashed away, I know.
I've only able to start saving now because I just got married and my wife brings in some income; before then I could only just meet my expenses every month.
EDIT: that said, I'm leaning towards hanging onto the savings, and any changes I make in our finances I would definitely let my wife have some input on, as it's partly her money!
I've only able to start saving now because I just got married and my wife brings in some income; before then I could only just meet my expenses every month.
EDIT: that said, I'm leaning towards hanging onto the savings, and any changes I make in our finances I would definitely let my wife have some input on, as it's partly her money!
Godwynn
March to the Sea
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Uh, 27. A bit old to have so little stashed away, I know.
I've only able to start saving now because I just got married and my wife brings in some income; before then I could only just meet my expenses every month.
EDIT: that said, I'm leaning towards hanging onto the savings, and any changes I make in our finances I would definitely let my wife have some input on, as it's partly her money!
First off, build up and maintain an emergency fund in a liquid account such as a savings and/or checking account. Keep ~10% of your annual income in there in case of injury, illness, or a sudden car repair that you need done.
Secondly, pay off your high interest debt!
Thirdly, you may want to open a Roth IRA and start saving towards retirement which is 40 years away, the earlier the better! Next year you can contribute a maximum of $5,000 a year.
Lastly, pay off your low interest debt, things that stand around 4-5%. You can soundly beat that by buying into Index Funds, the interest for this type of debt is only slightly above inflation.
Good luck!
Integral
Can't you hear it?
Not a problem. This thread moves fast sometimes, after all.
I believe that in the long run such a move would be beneficial as the US stands a good chance of cracking the next energy nut (whatever that is). It would put a very big crimp on in the short-term, and with the economy heading towards a probable recession, may be akin to slamming the brakes too hard.
I keep forgetting about the other macro indicators.
True; a gas tax would not be as good of an idea right now simply because we're already headed toward recession. We certainly don't want to exacerbate things. Perhaps after the economy weathers the next recession.(I've just been thinking that if oil is as big of a global warming/national security threat it's made out to be, then perhaps some sacrifices should be made to mitigate its effects. Carbon emissions can then be modelled as a negative externality, and basic micro says to tax negative externalities.)
Your debts probably appreciate (have a higher interest) than what you're getting from your CDs and where you might be stashing your cash. Pay those off first, since it'll grow faster than your savings. Though, Godwynn's right, do figure out what you may need for an emergency fund. That would include bare bones minimums of what you'd have to pay each month, perhaps for multiple months.
JerichoHill
Bedrock of Knowledge
Uh, 27. A bit old to have so little stashed away, I know.
I've only able to start saving now because I just got married and my wife brings in some income; before then I could only just meet my expenses every month.
EDIT: that said, I'm leaning towards hanging onto the savings, and any changes I make in our finances I would definitely let my wife have some input on, as it's partly her money!
You need to establish an emergency fund first, about 1000 dollars. Then you can start investing savings while building your emergency fund
Please read through this article. Full Disclosure : I'm a site admin/author for this site (im not the main guy)
http://www.getrichslowly.org/blog/2007/03/26/ask-the-readers-how-much-in-an-emergency-fund/
Martacus
World's Greatest Warrior
Ah, thanks everybody. That $1300 is already in a liquid savings account, so I suppose that counts as my emergency fund.
So pay off my high-interest debt first (fortunately, not too much of that )
Then start investing money elsewhere (Roth IRA, etc.)
Then pay off lower-interest debt (basically, my car--only a year and a half of payments left anyways)
Does that about sum it up?
So pay off my high-interest debt first (fortunately, not too much of that
)Then start investing money elsewhere (Roth IRA, etc.)
Then pay off lower-interest debt (basically, my car--only a year and a half of payments left anyways)
Does that about sum it up?
Homie
Anti-Lefty
Question:
Is there any good online economic dictionaries/glossaries?
I've found that several don't even include marginal benefit or economies of scope.
Is there any good online economic dictionaries/glossaries?
I've found that several don't even include marginal benefit or economies of scope.
JerichoHill
Bedrock of Knowledge
Business cycles.
The dollar is now considered undervalued by most metrics. The market is clearly reducing available credit and tightening up, which enables a contraction. Sort of like folks who exercise after the holidays to get ride of that turkey fat. The Fed is *attempting* to smooth the business cycle, but I (and most economists round parts here) don't understand why.
Business cycles exist because bad money chases good. They're natural, and they're fine. We had a downturn in 91. We had a downturn in 99. They do happen.
We just now have a 24/7 press that makes everyone downturn seem like doomsday. When in reality, we needed this correction for our long term health.
JerichoHill
Bedrock of Knowledge
Not that I am aware of
Godwynn
March to the Sea
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Tried Investopedia yet?
Mowque
Hypermodernist
back again.....i've almost finished the book (i'm a quick reader) however i notice one glaring omission, maybe because i am from a old-school industrial area. Where do unions fit in? (in a free-market sense, that is)
Homie
Anti-Lefty
Thanks alot. That is the most extensive one I've seen so far, economist.com is also decent, but this one is better. Thanks again.
JerichoHill
Bedrock of Knowledge
As a regulatory body when the regulatory system doesn't work? I dont know where unions fit in because I dont like unions. I blame the teachers union ( and cronyish school boards) for the decline of american education. (this contention is supported by the improvement in the nYC school system after Bloomberg's takeover)
However, i do believe unions had a place in the past where they did good things. Now unions are struggling to stop their declining membership and most are engaged in cronyism.
Not all, but most. Im sure theres a few good ones out there fighting a good fight for better labor practices. I dont know of any.
woody60707
Deity
What about as a more world wide view. Wouldn't unions in China and such places help the worker?
Fifty
!!!!!!!!!!!!!!!!!!!!!!!!!
Is there any way we could get rid of all the poopy farm subsidied (sugar, cotton, etc.) in a way that is economically palatable to the farm lobby?
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