nhapmon: Uses of Fiscal Policy


The President of the United Statesannounced last week that he would like to streamline the government. He is asking congress the permission to reorganize the executive branch so that it is more efficient and serves people better, or efficacy. He also said that he wants to make it smaller.
Size of government seems to be a major issue this year. I would like address this head-on.
The goal of a national government should be to create a system of shared prosperity through shared responsibility among its citizens.
The government has two financial responsibilities. First is to provide as much services possible for the least amount of money, also known as efficiency or productivity. The second is to regulate and referee the economy as a whole so that people's efforts are rewarded fairly.
This means that if the government is too large, the people just follow the rules and no growth will result in the economy because all the rewards would be allocated toward compliance of the rules in place. If the government is too small, then Americans just end up competing against other Americans. The right size government fosters teamwork among Americans, working together to compete against other nations in the global economic market. Yes, I'm stating that a capitalist system is nations competing against nations.
Dispite all of the rhetoric about too much regulation in the United States, the result seems to look like there actually isn't enough regulation in most parts of the economy. Americans do not, in general, look out for other Americans. Americans are actually trying to beat other Americans. This in part because corporations are no longer asked to provide anything in return for the limited liability and endless life they are provided. Corporations effectively pay less taxes as a percentage of their income than normal Americans. And they main their limited liability to shareholders. And with no mandate for corporations to provide anything to the state, corporations think of states are a set of natural and human resources. Once they can get either for cheaper, then they leave, having provided less than they have taken.
With the normal American having less freedom to compete against entrenched large corporations (with the exception of the technology sector), America does not compete against any nation. America is a loser in the global economy.

Federal Chancellor Angela Merkel Opens World Economic Forum Annual Meeting

Adrian Monck, Managing Director; Tel.: +41 (0)22 869 1212; E-mail: adrian.monck@weforum.org 

  • Germany’s Federal Chancellor Angela Merkel to give opening address at the 42nd World Economic Forum Annual Meeting in Davos-Klosters, from 25-29 January
  • Representation from 19 G20 countries, including heads of government from Mexico, South Africa and the United Kingdom
  • Record participation from over 2,600 leaders from government, academia, business and civil society
  • The theme of the Annual Meeting is The Great Transformation: Shaping New Models 
Geneva, Switzerland, 18 January 2012 – Angela Merkel, the Federal Chancellor of Germany, will deliver the opening address at the World Economic Forum Annual Meeting 2012 with record participation.
The theme of this year’s Meeting, The Great Transformation: Shaping New Models, reflects the need for a profound overhaul in the face of a fraying global system and lingering economic malaise.
“Capitalism, in its current form, no longer fits the world around us. We have failed to learn the lessons from the financial crisis of 2009. A global transformation is urgently needed and it must start with reinstating a global sense of social responsibility,” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.

How Much Government Is Enough?


The President of the United States announced this week that he would like to streamline the government. He is asking congress the permission to reorganize the executive branch so that it is more efficient and serves people better, or efficacy. He also said that he wants to make it smaller.

Size of government seems to be a major issue this year. I would like address this head-on.
The goal of a national governmen should be to create a system of shared prosperity through shared responsibility among its citizens.

The government has two financial responsibilities. First is to provide as much services possible for the least amount of money, also known as efficiency or productivity. The second is to regulate and referee the economy as a whole so that people's efforts are rewarded fairly.

MicroEconomics



Microeconomics is the fundamentals of behavioral economics from individuals' and companies' perspective. Unlike Macroeconomics, Microeconomics does not smooth out inefficiencies and noise due to the difference between actual supply and demand and perceived supply and demand. I have provided an example of Microeconomic changes due to actual and perceived information about supply and demand in my video about the Price of Oil. I highly recommend watching it.

In the coming weeks, I will be discussing fundamentals of Microeconomics and then moving onto specific behavioral economic issues we face today.