» Basic Economic Concepts
Las Vegas was not always the investor-owned entertainment venue it is today. Prior to the 1970s, most of the valuable property in the city was built and maintained by organized crime. It was not until the 1970s, and creative investors such as Steve Wynn, that Sin City began saying goodbye to mobsters in favor of Wall Street investors.
Governments around the world measure economic strength based on the combination of a number of factors. One of the factors we use in this country is known as the Gross Domestic Product (GDP). Some say that GDP is a very reliable measure because it gauges the market value of U.S. productivity. Others say it is marginally useful due to its inherent weaknesses.
Are you familiar with how the U.S. income tax system works? Do you understand that it is a progressive system that does not tax everyone at the same rate? If not, allow us to explain. Needless to say, it is a system rife with inequities, at least in the eyes of those in the highest tax brackets.
Government and independent economists use a minimum of 12 economic indicators to help them determine how the U.S. economy is doing. Among these indicators is something known as ‘housing starts’. Housing starts are a verifiable statistic that measures the difference between the number of building permits issued and the actual number of houses being built during a given period. Housing start statistics are always released with a comparison of the previous month in order to track up-and-down trends.
Whenever an individual buys securities, he or she must consider what is known as face value. Unlike the face value of consumer goods, face values on securities are not always static. Depending on the type of security one purchases, face value could change from time to time, negatively or positively impacting one’s investments.
The European Central Bank (ECB) is now in the process of implementing its own quantitative easing program modeled after what was done in the U.S. and Great Britain. The powers that be believe that the ultra-slow recovery in Euro Zone countries is largely due to not enough lending going on. They also believe that printing more money and flushing the system (a.k.a. quantitative easing) is the solution to the problem.
We hear a lot about government debt, also known as the public debt, during election season. However, once the votes are cast, the topic seems to fade from the collective conscience of America. That is dangerous. Government debt is a very real problem that should be important to every American citizen.
Take a look at your next pay stub. There should be a heading labeled FICA along with a specific dollar amount underneath it. Do you know what that is? Most people do not, except to say that it is something they know is deducted from their pay every week. It turns out that FICA, also known as the Federal Insurance Contributions Act of 1939, officially established what we now know as the Social Security system.
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