The World Bank compiles a ranking of the easiest countries from which to run a business. The rank counties on categories such as: protecting investors (New Zealand is #1), enforcing contracts (Hong Kong is #1), employing workers (USA and Singapore tied for #1). The overall ranking for 2007:
- Singapore – 2006 #2
- New Zealand – 2006 #1
- United States – 2006 #3
- Hong Kong, China – 2006 #7
- Denmark – 2006 #8
- United Kingdom – 2006 #9
- Canada – 2006 #4
- Ireland
- Australia – 2006 #6
- Iceland
Related: Countries Which are Easiest for Doing Business 2006 – Top 10 Manufacturing Countries – Farming Without Subsidies in New Zealand – Growing Size of non-USA Economies
A Washington official dares to tell the truth
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Walker: The present value of future unfunded liabilities for Medicare, Social Security and other plans is $53 trillion.
Walker: “You’re supposed to leave the country not just the way you found it, but better prepared for the future. The baby boom generation is failing on that.”
Walker: President Bush’s Medicare drug plan and the way it was sold to Congress and the public was “unconscionable.” The true, $8 trillion pricetag “was never calculated, disclosed or debated.”
Walker: The $9 trillion national debt is much more important than the budget deficit. Through the miracle of compound interest on the debt, he says, it will eat up more and more of the country’s resources.
Right. I keep posting on this because it is very important. To understand economics you need to understand the true shape of the economy. And to manage your investments you need to understand the great risk of a rising debt load (whether it is you personally or a country). Charge It to My Kids – USA Federal Debt Now $516,348 Per Household – Why Investing is Safer Overseas – Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren – Broke Nation
South Korea to Start $22 Billion Fund for Oil, Gas Projects
South Korea needs to catch up to China and India, who have scoured the globe to lock in resources to fuel economic growth. Korea, the world’s fifth-largest importer of oil, buys in 97 percent of its energy and resource needs.
This sounds like the type of news that 3 years later everyone says was the sign of a bubble. Today it is hard to tell whether the boom in oil and commodity prices are a bubble or a sign of a huge demand increase that the cannot be supplied at current costs (combined with the plunging dollar which exaggerates the trends – and maybe by a decrease in supply too). I would have to say I am leaning toward a bubble signal but to what extent? Is the average price over the next 5 years going to be $50 a barrel (versus $93 today) versus say $25 a few years ago? Or is that price $100 or $150? In a few years people will say it was obvious today – what are they saying today?
Related: MIT’s Energy ‘Manhattan Project’ – 10 Stocks for 10 Years Update (Feb 2007)
Record numbers go abroad for health
More than 70,000 Britons will have treatment abroad this year – a figure that is forecast to rise to almost 200,000 by the end of the decade. Patients needing major heart surgery, hip operations and cataracts are using the internet to book operations to be carried out thousands of miles away. India is the most popular destination for surgery, followed by Hungary, Turkey, Germany, Malaysia, Poland and Spain. But dozens more countries are attracting custom. Research by the Treatment Abroad website shows that Britons have travelled to 112 foreign hospitals, based in 48 countries, to find safe, affordable treatment.
My guess is that traveling for health care is going to increase greatly in the future. Health costs in the USA are enormous. Costs in Europe are different – often in wait time (or costs to avoid waiting) but another option is available – travel. Countries would be very wise to focus on building up this industry in my opinion. The economic benefits could be huge. The market is huge and growing. And the rich countries do not appear to be doing very well – especially the USA. The country needs to invest in a rigorous quality assurance system.
It is almost certain the first attack will be attempts to frighten customers by saying your country is unsafe. And those tactics will be used to try and get the governments of rich countries to impose restraints on the ability of their citizens to seek health care in your country. So if you want to be one of the really big winners you will seek high quality first (don’t be drawn into price wars to see which country can be cheapest). That market will be there but will be much less profitable. The huge rewards will go to those countries that provide world class care at prices much cheaper than the inflated prices in the USA.
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Companies with traditional plans are also taking the initiative. Blue Ridge Paper, which makes the DairyPak brand of packaging, was carved out of the forest-products firm Champion International when its employees bought a few factories that were scheduled to close. But health-care costs are hurting the company. So a Blue Ridge team plans to visit hospitals in India to assess their quality of care. If it gives the green light, Blue Ridge will begin promoting the option to its 2,000 workers.
Employees who opt for India would get to take along a family member, says Darrell Douglas, vice president of human resources, and the whole experience, including a recuperative stay at a hotel, would be covered. IndUShealth, a medical tourism start-up in Raleigh, N.C., will make all arrangements and coordinate care between U.S. and Indian providers. The sweetener: the company will share with these intrepid employees up to 25% of savings garnered from the outsourcing.
You might be surprised to learn that the National Science Foundation Fellowship program includes Economics. Steven Levitt’s Levitt’s NSF graduate research fellowship profile:
Levitt and his co-author, Stephen Dubner, explored a variety of topics in Freakonomics using analyses of statistics databases. The popularity of this book has made him one of the most well known economists among laymen. It was announced in 2007 that the two authors were working on a sequel.
Levitt’s other awards and honors include: named one of Time magazine’s “100 People Who Shape Our World” in 2006, named the Harry V. Roberts Statistical Advocate of the Year in 2006, the John Bates Clark Medal in 2003, the Garvin Prize in 2003, and the Duncan Black Prize in 2000.
In my full time job I work as an IT program manager for ASEE on, among other things, the NSF Graduate Research Fellowship Program. This blog is my own and not associated with ASEE.
Related: Science Fellowship Directory
I have mentioned Kiva before: Microfinancing Entrepreneurs.
Kiva is lets you loan money directly to an entrepreneur of your choice. Kiva provides loans through partners (operating in the countries) to the entrepreneurs. Those partners do charge the entrepreneurs interest (to fund the operations of the lending partner). Kiva pays the principle back to you but does not pay interest. And if the entrepreneur defaults then you do not get your capital paid back (in other words you lose the money you loaned). I plan to just recycle repaid loans to other entrepreneurs.
I have just placed $150 in loans to 6 business entrepreneurs (in Honduras, Indonesia[2 loans], Tajikistan, Uganda and Ukraine) – and a $100 donation to Kiva. Adding to my previous loans of $350. Since our last post the Oprah Winfrey Show, President Clinton’s newly released book Giving and others have sung the praises of Kiva and made it a challenge to find entrepreneurs of Kiva to lend to. That seems to have been partially fixed the last few weeks (though still they limit you to no more than $25 per entrepreneur – in order to allow the large numbers of people that want to lend to get through).
If you lend through Kiva, add a comment with a link to your Kiva page and I will add you to our list of Curious Cat Kivans.
I have mentioned previously the horrible “service” I received from Discover Card. They actually sent me a check finally for the overpayment. They still have failed to send me the cash back reward I earned. ust spun off their Discover Card subsidiary today). As I stated before if they sent me the money they owed I would loan that through Kiva and add an equal amount from me. Obviously I exceeded that with the loans mentioned above. If they send the cash back bonus they owe I will do the same thing.
Related: Kiva: Microfinance Loans (posted on Christmas day 2006) – helping people succeed economically
Private- Equity Tax Hike Falters
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In response, private-equity firms — whose multibillion-dollar deals have created a class of superwealthy investors and taken some of America’s large corporations private — hired dozens of lobbyists, stepped up campaign contributions and lined up business allies to wage an unusually conspicuous lobbying blitz.
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Several prominent lawmakers expressed surprise to find that the managers’ profits, known as carried interest, were taxed as capital gains, for which the rate is usually 15 percent. That is less than half the 35 percent top rate paid on regular income.
Yet another corporate welfare loophole that allows private equity to avoid paying the taxes they owe. What a surprise that the political leaders decide to tax the future generation instead of those paying them huge sums of money today (ok, it is sadly not a surprise that money buys favors in Washington DC). One option to cut the debt passed on to future generations is to cut spending but since spending has exploded over the last 7 years the decision to force our grandchildren to pay instead of paying for it ourselves is something the “leaders” of our country should be ashamed of.
Federal spending in billions – source: fedspending.org
| year |
|
$billion spent |
|---|---|---|
| 2000 | $1,813 | |
| 2001 | $2,027 | |
| 2002 | $2,284 | |
| 2003 | $2,524 | |
| 2004 | $2,517 | |
| 2005 | $2,603 | |
| 2006 | $2,869* |
* $2,152 actual spending for 3 quarters which is a rate of $2,869 for a full year. 2007 data not yet available.
In Charge It to My Kids Thomas Friedman makes the correct point that I have made previously (Washington Paying Out Money it Doesn’t Have – Inheritance Tax Repeal). Politicians like to tax your grandchildren to pay for what they are spending today.
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added Ms. Perino. “I just think it’s completely fiscally irresponsible.”
Friends, we are through the looking glass. It is now “fiscally irresponsible” to want to pay for a war with a tax. These democrats just don’t understand: the tooth fairy pays for wars.
Huge deficits created by spending tons of money that you don’t have, is just taxing your grandchildren. It is not a sign of being fiscally responsible. It is a spending today and charging it to your kids – which is a bad idea.
If you want to cut (or not raise) taxes the honest way to do so is to cut spending. It is not honest to claim you are not raising taxes when you spend more than you have and pass on debts. Those debts are just future taxes. Those electing these politicians that just add more and more debt to the future are mortgaging the country. Those debts will come due. That is obvious.
You can seem to have a free lunch (or free roads to nowhere or whatever other frivolous, or important, spending you want) for awhile (decades actually for a country with a very strong economy) but eventually people will have to pay for the debts the current credit card culture of those in Washington. Those decades of spending what they don’t have might well start causing real pain in the next 10 years, or perhaps such irresponsible behavior can go on several more decades (a strong economy can hide spendthrift habits). but eventually that spending will have to be paid for – either by your children or grandchildren.
Related: Buffett on Taxes – Warren Buffett on the similar trade deficit (where those in the USA directly, instead of though their elected government) spend beyond their means:
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Jon Stewart is a Genius
Jon Stewart asks Alan Greenspan an excellent question:
Why do we have a Fed? Why do we have someone adjusting the rates if we’re a free-market society? Alan’s answer is not satisfying, but I don’t blame him: The economics profession does not have a good answer. We economists have rigorous and fundamental theory to explain why we have environmental regulation (externalities) and to explain why we have antitrust laws (market power), but there is no consensus about what market failure calls for the existence of a central bank. The answer has something to do with the benefits of a system of fiat money. And it has something to do with the possibility of short-run monetary nonneutrality… |
Nice post from the recent Chairman of the Council of Economic Advisers to President Bush and current Harvard professor. If I remember right he was in consideration to serve on the Fed. I also don’t think he is questioning the regulatory role of the Fed but the interest rate and monetary policy.
Related: Bernanke Calls for Stronger Regulation of Mortgages – Investor Protection Needed – What is the Fed Funds Rate?
Double-digit home price drops coming
The survey attempted to identify the high and low points of housing prices in each of the markets, some of which started declining from their peak in the third quarter of 2005. All are median prices for single-family houses. Nationally, Moody’s is projecting an average price decline of 7.7 percent. That’s a jump from the 6.6 percent total price drop that the company was forecasting in June and more than twice that of last October’s forecast of a 3.6 percent price decrease.
This forecast appears to me to be from the absolute top to the bottom over the course of several years. That decline is now estimated to be over 10% for nearly 23% of the markets. The remaining 67% will decline less than 10% from the peaks or increase. There average price decline prediction (again from the top of the market to the bottom) nationwide is now 7.7% up from an estimate of 3.6% last year.