Investing 101

Term: Underwrite/underwriter/going public
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Sentence: The image depicts a middle man, which essentially is an underwriter who facilitates the issuing of new securities by a corporations to the public.

Term: Franchise
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Sentence: McDonald's is company that franchises, so it allows different people to open restaurants, using the trademark and logos for a annual licensing fee.

Term: Selling Short
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Sentence: Selling short allows investors to gain profit on stocks that are failing by selling someone else's stock and then buying it back at a lower price and keeping the difference, therefore gaining profit on dropping stock and actually wanting it to drop in price.

Term: Bulls
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Sentence: Bulls  are optimistic investors believe that a particular part of the market will rise, and attempt to profit from the increase.

Term: Bears
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Sentence: Bears are essentially pessimistic investors that believe a particular security or market will head downward and will attempt to profit from the fall.

Term: Primary Market
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Sentence: In a primary market, you purchase securities straight from the issuer, like purchasing stock straight from a company on the stock exchange.

Term: Secondary Market
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Sentence: In a secondary market, the security is purchased from another investor, not the original seller, much like buying a used car, taking it from the owner rather than a dealer.

Term: Bond
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Sentence: Bonds essentially are a promissory note that they promise to repay an amount plus interest within a stated period of time.

Term: Stock
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Sentence: In monopoly, you never own a property truly, but ownership is signified by a house on the property, much like stock signifies ownership in a company.

Now That I'm Thirty

Now that I'm thirty, our government has gone the route of 'option B' to attempt to fix our economy. Our government made many adjustments in attempt to fix the national debt over the past twelve years. The first adjustment made was a requirement to no longer run a deficit with our budget each year. This has helped us keep our national debt from growing and any possible surplus will go to helping decrease the deficit. Part of running a balanced budget required the decrease across the board of government spending, reducing the budget of almost all programs. One area that was drastically effected by this change was the defense budget. Our country was able to maintain strong military presence without needing to spend a large portion of the government's budget on our national defense.
As a result, the last twelve years have been a little rough for our federal government and the programs. Certain programs such as the national park systems have been scaled back, leading to slight changes, such as larger fees and more chaos. This system has allowed for more Americans to essentially chose what programs they support. This system has also allowed the government to shrink the deficit by about a quarter trillion per year. Therefore it is steadily declining without causing major turmoil in our country, and it will not be disastrous if it does not decrease as drastically one year. However, the major priority for now is running a balanced budget in our to keep our country running smoothly.

Manifesto 2.0

1. The proper role of the government in the economy is to regulate it without taking part in it. The government needs to be able to have some sort of control over companies and organizations but should not effect the economy so drastically with regulations. The government should also not be able to cause major fluctuations in the economy and should let it remain a product of our nation, not their control.

2. I support the sources of money for the federal government. As much as I do not enjoy paying taxes, I realize that it has become a critical part of running our nation. I also believe that there is no better source for income to the federal government and expanding any areas would cause their downfall. I believe that the government could take some of the burden off of each American from tax cuts, however, there is no better source of money in my opinion.

3. I would criticize the way money is spent by the federal government, essentially due to the deficit that they run each year. I do not support growing our 16 trillion dollar deficit anymore and therefore almost all government spending seems ridiculous. However, since our country cannot run properly without this spending, I would like to see our government cut defense and discretionary spending. Both areas could lower their budget without having to be completely cut and I believe that cutting these would impact our country less than cutting other programs.

4. My major choices in helping to reduce the national debt included cutting in almost all areas of spending but not raising taxes at all. For investments I cut the federal subsides for AMTRACK, because it will force it to because less reliant on the government and can drive them to become more efficient and profitable. I chose to cut the funding for the arts and humanities, because will this deficit, our government does not have the luxury of funding projects like this one. I chose to cut overall spending which would help our budget stay in balance and would force the government to look harshly at what is necessary. I chose to cut war spending as well, because I believe we can afford to shrink our military and we already spend more than any other country and I would like to cut in areas of defense that deal with developing our missile defense system, because it is no longer necessary due to our international relations. The last cut I would make is cutting part of the Medicare budget, because it can lower the health care costs across the country and we already spend enough of our budget on Medicare.

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Source: http://www.agricorner.com/wp-content/uploads/2012/12/kalabagh-dam.jpg

A dam is essentially a structure that can stop something until it is ready to be released and go back to normal. This is essentially the system I would suggest for our government's spending, because I believe they need to hold back on many of their different programs until the deficit is going down and we are running a balanced budget again. I personally just do not want to see the deficit increase any greater and I think that if the government can hold back on their spending for a little while, we can get our budget back on track.

Taxes

Flat Tax

Pro: Under this tax, all incomes would be taxed at the same rate, 17% under the Forbes Plan, and it is a relatively simply tax. "Flat tax is attractive to many people for its emphasis on work, savings and investing, and fairness".  Only someone's wage would be taxed so any investments, like capital gain, will be left tax free, and few deductions would be allowed, getting rid of any loopholes as well as getting rid of double taxation. The flat tax would exempt those with a lower income in order to save them from paying a higher tax than they do now. By leaving investments alone, more people would be lured to invest, fueling economic growth.It is also simple enough that companies would not need to hire accountants to help them with taxes, and would cut federal spending at the IRS because they would not need as many employees.
Con: This tax would eliminate many deductions, including mortgage tax exemption, making homes depreciate in value and motivate fewer people to purchase a home. It is argued that this tax will actually raise the average tax on the middle and lower class because of the deductions and reduce them on the wealthy. It is possible that it, "Would greatly enlarge the gulf between have and have-nots". It may increase the budget deficit, or it will need to be a higher tax percentage, such as 20%.
I do support this tax system because it seems extremely fair and constitutional, and seems most likely to get rid of many forms of tax avoidance. 

National Sales Tax

Pro: With this tax, a flat percentage of the price of all goods and services would be taxed. It would abolish the IRS, eliminate federal income tax, and allow a rebate for those lower income households that would not have been subject to tax. This tax takes into account the general revenue rate, survivors and disability rate, and hospital insurance rate. The Fair Tax Act proposed a tax only on the purchase of new goods and services for personal consumption. It would completely replace the current tax system and not reform it, eliminating federal income tax, social security, medicare, and others. It would simplify the system and taxes would not need to be filed because they would be paid with purchasing goods daily. This could also return a lot of savings to the consumer."By removing the tax on the return to savings and investment, a consumption tax system could result in higher production rates and higher wages". 

Con: This could possibly create a regressive tax system, because the wealthy do not spend as much of their income as lower and middle class do. The actual tax rate itself may be difficult to comprehend and can be a burden on the lower class. The IRS would not be abolished through this plan, due to the rebates, therefore saving the government no money. It is also possible that this tax would charge those who rent their homes to pay a sales tax monthly, where homeowners that own property would not be taxed monthly. There is also a problem shifting to the new system, "Under the new system, older people would essentially have to pay a second large tax on their earnings by being taxed on goods and services during their retirement".
I do not support this system because it would be much more difficult to the lower and middle class to be able spend extra income on a tax on goods and services. 

Value Added Tax

Pro: This is a simple and efficient way of taxing, a consumption tax.It flows through the supply chain and adds to the treasury as it goes. This system works well in other countries such as Japan, Mexico, and France. The tax, "Contributes a substantial share of the government's revenue while remaining neutral for the economic participants". The tax is passed through each part of the supply chain, motivating participants to seek reimbursement by taxing at the next stage. There is a lower chance of tax evasion and the accounting burden is lighter with VAT. It is possible this could replace corporate tax, and could be used to increase tax revenue. It would avoid taxing corporations beyond competitiveness or individuals to a high level. A VAT could get rid of payroll tax, giving consumers more money while also eliminate a common tax avoidance. It could be extremely efficient, not tax savings, easy to administer, and serve as a stimulus.
Con: This places the tax burden entirely on the consumer. It is a regressive tax that is burdensome on the lower and middle class. This tax is not very flexible, consumers have little choice in how to move the money around. It also, "discourages consumption while rewarding investment". It is possible that this tax will greatly increase over the years, and could be placed on top of income and payroll taxes.
I don't support this tax because it essentially is another tax that is going to be placed entirely on the tax payer and does not give the consumers much of a choice in pricing.

Progressive Tax

Pro: This tax would shift the burden off of the lower and middle class, shortening the gap between them and the upper class. This could also prevent political instability and can protect tax payers if their income is to go down. The government can also acquire most of their revenue through this system. This can help reduce the budget by increasing the tax on the upper class. "A progressive system distributes the risks of economic changes by basing a family's tax burden on their ability to pay". Lowering taxes on the wealthy will not usually improve the economy. Cutting this tax will greatly reduce federal revenue and will not help the economy according to the trickle down theory.
Con: This tax would discourage economic growth by burdening the tax payers in higher brackets. Raising these taxes will not effectively cut the deficit and there are not a large enough number to raise revenue. "The economic downturn can not be fixed by the few surviving millionaires into oblivion". This could also discourage businesses to grow or expand, because additional profits will be highly taxed. This tax can also be considered unconstitutional and doesn't treat tax payers fairly. Many of those in the upper class receive income from investments and therefore are not fairly taxed.
I do not support this tax because it has little option to actually assist in fixing the deficit, and it may demotivate people to strive expand their wealth and improve the economy.

The Big Picture

If I could advise the President on the federal budget, I would advise him to create a balanced budget. Over the years, we have created a deficit by spending too much money and building a large debt for our country. It could also be beneficial to create a budget that ends in a surplus in order to help decrease the fiscal cliff. The problem with the government, is that the budget always continues to remain unbalanced over the part years. We need a balanced budget in order to keep the taxpayers happy.

I believe that our government should use a proportional tax because it will take the same percentage from all incomes and seems most fair to all tax payers.We should also utilize a discouraging tax in order to bring in more revenues for our government. The government should also utilize the sequester in order to break down the federal deficit. It will only anger taxpayers more to pay higher taxes in order to aid in balancing the budget or cut down the deficit.