Monday, January 3, 2011

rice with chinese sausage and preserved shrimp, grape flavored ramune, little debbies cakes

sunday only taught me once more that people are worth the pain.

it was about saturday afternoon when i woke up late to find out i had to meet my grandpa in order to get to my cousin's birthday party. figuring that any type of entertainment and family would be better than lying in bed, coughing my lungs out. so i headed out to waltham to have some fun.

the party was overall pretty boring. when i got there, there were less people than i expected. it could have been mostly due to schedules or the seasonal time, for the last time i came to a party of theirs, the pool was still swimmable. anyways, i ended up talking to my uncles about politics and the direction of the government. they exchanged stories of deaths and unfortunate accidents and we all came to a conclusion that there are certain people who are simply gluttons for punishment, lightning rods for trouble.

my uncle's house is bigger than i thought it was, which is cool. i saw some unlikely things like a second kitchen and an old fireplace, as well as the old school pullstring doors that lead to the attic. i also got to play with my cousins and see what kind of chaos they were stirring up. never again am i playing clue with them though, because they cheat HARD.

came back to base, still tired and recovering from being sick, but looking forward to the next family gathering which should be soon. a whole bunch of dates are clumped together as i soon realized, but no one can be Superman. even heroes need to take a break and be responsible for their lives.

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a random thought came to me while going to my cousin's house. my grandpa, being the nice guy he is, was suggesting some avenues or a plan of action for my career and job search. the part where he said i can become rich someday was encouraging, if not empty. but as always, inspired by out of the box thinking, i began to meditate.

most, if not all, of the richest cities in the world have some mass transit system. i'm not sure why they have to be in place, other than to facilitate transportation efficiently, efficiently in the economic sense, even though that it's technically a natural monopoly. if not, then everyone would be forced to carpool or buy their own vehicles and that would cause a lot of congestion.

related to that is that the largest cities tend to be situated near a major body of water, such as an ocean or river. this is because civilizations in the past depended on those waterways to transport goods or to travel. also they were major sources of drinking water and also allowed for massive irrigation.

randomly or not, it got me thinking about the U.S. government and its budget deficit. 

  Government Pensions   $1.0 trillion   
  Government Health Care   + $1.2 trillion   
  Government Education   + $1.1 trillion   
  National Defense   + $0.9 trillion   
  Government Welfare   + $0.7 trillion   
  All Other Spending   + $1.8 trillion   
  Total Government Spending    = $6.7 trillion   
  Federal Deficit   + $1.3 trillion   
http://www.usgovernmentspending.com/breakdown

(This is fun-I get to learn more about the government whether right or wrong.)

So I don't know too much about government budgets, nor do I scrutinize the government too much in any particular category. As you can see here there are 6 categories-Pensions, Healthcare, Education, National Defense, Welfare, Other.

(Line of thinking changed as soon as I wrote that last line) I'm not gonna lie. Somewhere in this budget is the key to financial freedom for America. I'm not saying that like a conspiracy theorist where the slightest event or revelation can be blown up to huge proportions, but simply looking at the operation of a big machine like the government, there must be ways to get ourselves out of this funk.

There are two mindsets that the government can operate in-to have concerns about profits (or having their books in the black) or to not be concerned about profits. in either mindset, profits are welcomed, i.e. to have more money is certainly better than less, but in the first mindset, there is a certain emphasis to not have debt, whereas the second one is contentment with having exactly no money left at the end of the day, or is indebted to another entity.

each mindset causes its own problems. my focus will be upon the first one, rather than the second, although i'll talk about the second one now.

if the government is not concerned about profits, then it can continue to offer valuable services to its people such as Medicaid, Medicare, Social Security, etc. it can also spend money in other places as well, such as maintaining schools and offering money to municipalities, foreign spending, maintaining resources at home, subsidies, etc. the main problem with that is that all this spending eventually needs to be paid back or at least be covered. the government in response will probably have to increase the cost of these offerings and other goods as well, or end up printing more money, which only sinks the country deeper into inflationary troubles. as well as that, concerns about the trade balance brings the threat that the United States can be bought and sold, or rather our value is held in the hands of foreign countries and outsiders (no offense to them, nor names taken.)

if the government is concerned about profits, then inevitably it would have to re-evaluate the types of services and offerings provided, to see whether or not some of them are indeed profitable, whether from an accounting standpoint or economic standpoint. if there are services found that are not profitable, they may be cut, even if they are important. if there are services found that are profitable, then there might be business-esque initiatives taken to either maximize revenue or to cut costs, resulting in an inferior offering, or higher costs passed onto the people.

at the same time, there must be consideration of the present budget items. going back to those categories of the budget (Pensions, Healthcare, Education, National Defense, Welfare, Other), one must has to find new ways to create profit. unfortunately, undergoing profitable measures in those categories will most likely retard progress towards profit itself.

for example, there are already problems with finding affordable health care, two of which i know are co-pays and prescription drugs. if co-pays are increased, there would be less access to treatment, resulting in sicker people and a greater dependency on the medical system. the same would go for prescription drugs. offering generics has been a feasible solution, but to what point does quality suffer for such a remedy? in either case, the end result would be a vicious cycle of individuals who are indebted or dependent upon the system.

another example is education. federal funding has allowed for greater access to education and schooling in universities or private organizations through the use of grants and loans as well as subsidies for these educational facilities. the current situation for the people, whether related or not, is that there is 10% unemployment. more graduates are coming out of school, unable to find work. even worse, some are overqualified for certain positions and not earning as much as they can or "entitled" to be. we may have increased our educational capital and educational output, but are those newly and highly educated individuals actually creating output? or rather, have we spent resources into a person who cannot contribute and give back, not only to their surrounding area, but also the world?

even further is military spending. one of the hotly contested issues has been the recent war of terrorism and the invasion of foreign districts. officially it was undertaken to preserve and fight for the freedoms of people who have been oppressed and to spread democracy into an otherwise chaotic land. already there have been problems of perception where the world is seeing the United States as a warmongering country, as well as brutalistic treatment of captives and assailants at Guantanamo Bay. there has been speculation in the public eye however that the war was initiated in order to secure precious resources, the main one being oil. whether or not there is validity in that accusation i do not know. what i do know though is that resources are limited in the world, and that the only two ways to gain resources are to 1) make them, or 2) take them. in the past, the United States was a goods-oriented economy, creating manufactured goods and automobiles. lately, that task has been outsourced to other countries and now the United States is a service-oriented provider. the problem of the United States being dominated by foreign goods providers is apparent.

probably the most fundamental though is welfare services at home. intended for the poor, the government provides services such as subsidies for low-income housing, food, and other resources. one of the problems is that some of these services are also being offered to high and middle class households, whose contribution to the system is much less, monetarily, but can actually afford spending on such services, unlike the poor. the other problem is the lack of empowerment for individuals who are dependent on these services. a household may choose to remain on some sort of welfare program, rather than look for employment or other means to rise up financially.  there may also be a social stigma in receiving such aid, which may end up in self-internalized negative feelings for the individual. in either case, the increase in spending into these services does not necessarily promote empowered individuals or increased contribution to the system that was originally intended to help only the people who absolutely needed it.

but that's "my rant" about the government. i'm sure that people can find examples in their own lives such organizations. they don't have to be necessarily large as the United States government, but even looking at their workplace or their own family household budget, one can find problems in having either a profiteering attitude or a carefree one. what i'm saying is that there's always going to be a struggle about doing the right thing vs. trying to survive as an entity, always a struggle between public perception vs. public necessity, and a struggle between power vs. humbleness. spend your resources wisely is all.

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the day will come when we won't have to use words to express how we truly feel.

Posted via email from Bloodscope Economics