The General Economics Thread

@Blue Ninja 0: The problem with his idea is that the size of any further corporate subsidy we could afford to give them wouldn't pay for a very large salary increase. They need to increase prices a little, it wont kill us.

Re the Interest Rate: Currency enters the US economy primary when the Federal Reserve Bank lends it to American commercial banks. They have to pay the Fed back with interest, and that is the "Interest Rate" you hear so much about. The lower the rate the Fed charges to the banks, the more money they borrow, which they then lend out to people who apply to them for loans. They charge their customers an interest rate a little bit above what the Fed charged them, so when the Fed lowers it's interest rate, the banks lower theirs, and more people borrow money. This money in turn gets spent, which powers economic growth. So when the Fed wants more economic activity to happen, they generally lower the rate. This can lead to inflation, so they dont want the rate to be zero permanently. What exact rate the Fed decides upon at any one point in time is generally interpreted as a reflection upon the state of the US economy.

I am enjoying the lower price of gas right now. Here in New Jersey, I've seen $1.97 a gallon yesterday. I wonder how much lower it can go.

Gas is $2.30 here.

Don't take it personally but I have to hate everyone who has cheaper gas than me.

Against all the conventional wisdom, my government is trying to raise every single tax on its reach and create new ones to pay for the 30 billion deficit on its accounts. Most of the tax is over consumer goods and services.

On an economy where the consumption dropped drastically, the inflation is dangerously close to 10% and the GDP growth is virtually zero.

I'm so sure it will work and intended and totally not make everything more expensive and will totally make the consumers more confident to spend money instead of saving everything they have.

Well, when inflation is running high, you are supposed to cut consumer demand to give the supply of goods and services a chance to catch up. It seems that your nation's core problem is the inability to provide what its citizens require. Raising taxes won't help unless that revenue goes to fund manufacturing or infrastructure.

edited 2nd Sep '15 6:59:59 AM by Fighteer

http://www.globalpetrolprices.com/gasoline_prices/

USA is going against the trend. Rich countries generally have expensive gasoline.

(What's going on in Venezuela?)

Lotta gas comes from Venezuela

Our main issue isn't the inflation alone, the stagnant growth and increasing unemployment are wrecking our economy.

4 years of mismanagement led to a demand and supply problems, it didn't help that our ruling party burned out reserves to guarantee their presidential reelections and not the government is without money to invest on the supply side, but so far they are more concerned with paying their own bills and are milking everyone dry until they get their money.

Heavy government subsides for gasoline.

edited 2nd Sep '15 7:36:22 AM by AngelusNox

Deterioration in Malaysian manufacturing are at the worst in 3 years. Meanwhile, Malaysian ministers continue to urge that manufacturers increase exports to capitalise on the weak ringgit. Except that Malaysia's exports are either commodities (which have had a bad year) or use imported raw materials.

Although some are higher than most. For example, the UK is the 5th most expensive (according to that site, the most expensive petrol is in Hong Kong, followed by the Netherlands and Norway) for petrol in the world. About 70% of the price is Tax^note  The garages themselves have very low margins and face a lot of competition (especially by Supermarkets), hence a lot of Petrol Station have closed over the last 25 years.

edited 2nd Sep '15 9:12:13 AM by Greenmantle

That must be deliberate on old Norway's part, seeing as they produce so much of it for export.

I doubt Norway taxes the gasoline it exports out.

Hong Kong, Norway, etc. are likely applying "fat taxes" on gasoline. They want to encourage usage of public transport, biking, maybe electric cars. Gasoline = pollution.

It's like cigarette taxes. You may as well try to collect as much tax as possible from stuff which are going to cost the government a lot in health insurance costs.

Also I believe the U.S. does subsidise the fuel price doesn't it? Not to mention weird protectionist rules in some states where you have to pay someone to fuel your car, instead of being able to do it yourself.

Where did you hear any of that?

The subsidy thing or the fuel pumping this? The fuel pumping thing I think I heard from my aunt and is a Jersey thing, though I might be misremembering something she said.

I don't know that there's anywhere in the US which requires the use of pump attendants.

New Jersey does, or at least did.

Then you have never been to New Jersey or Oregon. You're not allowed to pump your own gas in either state.

Cool I wasn't misremembering, Jersey is that nuts.

The funny thing is that New Jersey is run by a Republican who gets all preachy about free markets and burdensome regulation but is only too happy with a grossly market-distorting regulation.

The only find of fuel subside the US has as far as I know is for the corn derived ethanol, which is kinda stupid since making fuel from corn is an endothermic process that requires a lot more energy than sugar cane derived ethanol.

Corn ethanol is pure pork for corn farmers. It's one of those subsidies that stays mostly under the radar and is protected by a powerful lobby and bipartisan consensus.

Sadly, the Tea Party hasn't been convinced that it's environmentally-friendly. Maybe we should try that...

edited 2nd Sep '15 4:28:48 PM by Ramidel

(EquiBlog) The costs of Health Care in the US are slowly but surely dropping

To the surprise of no one with at least half a brain cell.

Well, I didn't know if or when it would happen. I do know that people have gradually been supporting Obamacare more and more, but I had a conversation with a coworker who has two Obamacare stories to share: one of a person who saved a lot of money and their life with it, and another who saw prices shoot way up, and decided to pay into the system only because the penalty for not doing so was higher.

Even if success stories do outnumber the stories of people who had big problems with Obamacare - and all we have to go by now are anecdotes - these stories do exist and will color people's perceptions of Obamacare.