Problems of a Current Account Deficit- Economics Help

http://www.economicshelp.org/macroeconomics/bop/probs-balance-payments-deficit/


This article explains the concerns and possibilities of account deficits. The trade deficit make up a large portion of the current account deficit. This means that imports and investment have a greater value than exports. This is sometimes concerning because it is not sustainable in the long term and can cause countries to pay back money with high interest. This situation seems similar to a problem that would cause unanticipated inflation in a country. These countries also rely on consumer spending which leaves them more vulnerable to unwanted changes. The issues are concerning but not as realistic for countries like the U.S. The U.S. attracts capital and that makes it harder to rely on foreign investment. This article helped me understand that developing countries are more affected by trade deficits. I also learned that in some cases the deficit could indicate a growing economy. One part of the article that I did not understand was about inward investment. I have not learned about it specifically and would have to do more research. The amount of possible reactions to the account deficit is a lot more than I previously expected and it is much more complex.

Bureau of Economic Analysis- U.S. Department of Commerce

http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm


The Department of Commerce released the trade deficit report for the month of October. I was surprised that it took over a month to compile the report until I started reading. There were many other factors and statistics in the report that I didn't expect. The trade deficit in October was 43.4 billion dollars. That is two billion dollars down from September but an increase of 20.5 billion from that time last year. At first this number seemed huge but as I read on, I realized that the percentages make a difference. The exports increased 3% or 57.8 billion from last year which is good. This report ties directly to the Gross Domestic Product of the U.S. It is part of the formula and like most other countries; the imports are higher than the exports. I realized how the trade deficit affects GDP and why it is important to calculate. After reading the report, I was concerned that the U.S. is vulnerable to issues if something were to happen to the imports. We seem to be heavily reliant on imports which was a topic of concern. The report eased the concern and what we learned in class made me realize that all countries are reliant on imports more than exports.

Debt Fades as Election Issue- The Hill

http://thehill.com/policy/finance/219053-debt-fades-as-election-issue

This article was very interesting because it focused on the lack of focus on the debt ceiling. It was a nice change because the focus has always been on the raising of the ceiling. It also offered a different look at the Republican party. The party has been more critical of ObamaCare and spending which I also think is more important. The issues that the party is focusing on, are related to cutting spending and budgets but don't directly affect the debt ceiling. I think that ObamaCare is a more pressing issue because it affects the middle class and the debt ceiling only really affects the people who have substantial savings. I agree with the proposal of a 5 trillion dollar spending cut over the next 10 years because it will keep the government accountable for the money they have in the budget. I disagreed with Joni Ernst statement about transitioning teenagers to Social Security plans. I don't think that that would help spending or reducing the deficit. I also think that budget discussions will lead to a debate about the debt ceiling and government spending next year.

Where's the debt ceiling now?- CNN

http://money.cnn.com/2014/02/11/news/economy/debt-ceiling-reset/

I think that this article is a bit shocking because our national debt is 17 trillion dollars. The opinions in the article were pretty unbiased which made the article easier to understand. It seemed pretty concerning that the ceiling has been raised five times since 2011. I think that the ceiling could affect personal savings and cause the economy to slow. I am a bit skeptical that the Treasury can monitor the funds and make sure the country doesn't exceed the limit. I think that the country can successfully run with a lot of debt but they need to stop raising it. However, it is concerning that the ceiling has raised approximately three trillion dollars in the last three years. The government and committees usually come up with good solutions to these issues. I hope that they can come up with a plan that allows the country to function with an OK amount of debt.

The Debt Ceiling Deal: Last Minutemen- The Economist

http://www.economist.com/news/united-states/21588089-congresss-just-time-agreement-ignores-countrys-long-term-problems-last-minutemen

This article sheds light on the costly mistakes and last minute deal making of the United States government. I like the article because it shows how the Senate had to bail out the government with a last minute decision but has to revisit the issue again. There was a few opinions in the article that I agreed with as well. I agreed that the sequester was the consequence of disagreements about the budget deal. I think that the sequester hurts our defense projects immensely because of the 10% budget cut. I liked the part of the article that talked about how the Treasury uses techniques like delaying payments to government workers to pay bills. This piece showed how miscommunication and lack of deal making, directly affects employees. These decisions not only affect the government but projects that are funded by them. Defense is a major department that has to take a hit. I believe that these decisions will hurt many parts of our country and economy. I didn't like how the article featured China's role in the argument. I also was annoyed by their blatant opinions in the article because it shadowed the actual content.

House Approves Higher Debt Limit Without Condition-New York Times

http://www.nytimes.com/2014/02/12/us/politics/boehner-to-bring-debt-ceiling-to-vote-without-policy-attachments.html?_r=0

I thought that this article was informative about the debt ceiling and was pretty unbiased about the vote. The opinions in the article were based on the differences between Democrats and Republicans. I thought that the Republicans would want to raise the debt ceiling but the President actually had to rely on the Democrats. I agree that this could become a drag on the economy because it allows the government to borrow without consequence until March 2015. If the decisions about spending are put in the wrong hands, the results could become extremely negative. I thought that the comments about John Boehner were a bit critical but if his own party is sick of him, then he must be doing something wrong. I liked that the author had opinions from both sides because it gave good insight into the arguments of both. I disagreed with the package that Boehner offered about retracting military pensions to increase the ceiling. I thought it was a stupid idea and not thought over very well. This article made me think about why his own party does not like him and how John Boehner goes about making decisions.

As electricity costs rise, market for heat pumps takes off- Boston Globe

http://www.bostonglobe.com/business/2014/10/05/new-heat-pump-technology-can-warm-homes-even-cold-new-england-winters/JgABf7wNFqRcYI6YVN6nsI/story.html

This article was interesting because I had never heard about heat pumps before. I like how the author mentioned the approximate savings that a household will keep. The article also mentioned that the majority of the savings will be from oil. I agree that this product will reduce the need for insulation but it depends on the installation of the heat pump. The author describes useful knowledge like how other products are benefitting from new technologies. It seems a bit unrealistic that states have been heavily promoting this item because it is taking away from their profits. I like how the author went over the price of the most popular heat pump, the mini-split. It allows the reader to fully understand what the buyer is getting from purchasing this product. I think that this advancement will help consumers stay warm and not have to pay a fortune for energy.

De Blasio Orders a Greener City, Setting Goals for Energy Efficiency of Buildings- NY Times

http://www.nytimes.com/2014/09/21/nyregion/new-york-city-plans-major-energy-efficiency-improvements-in-its-buildings.html?_r=0

This article was very optimistic but seems a bit ambitious. It is good news that the plan could make New York City more green and make energy more affordable. Greenhouse gas emissions need to be lowered but an 80 percent decrease by 2050 seems like an incredibly high order. The plan seems a bit unrealistic because they need 1 billion dollars of capital and the tax payers will definitely not let that go unnoticed. I agree with the author, that small changes can go a long way. This includes boiler improvements and implementing solar changes. The article mentions that by 2025, gas emissions will be reduced by at least ten percent or the equivalent of 700,000 vehicles. This is shocking because New York City doesn't have many cars to begin with and that could make up the difference of their other emissions. I like how the author mentioned storms like Hurricane Sandy and their economic cost because they are phenomena that cannot be stopped. I also liked that the author mentioned how much money the city would save, once the upgrades are put in place.

"Clean Energy" Is Cooling the Economy and Damaging the Environment-Forbes

http://www.forbes.com/sites/realspin/2013/09/13/clean-energy-is-cooling-the-economy-and-damaging-the-environment/


This article was eye opening but I am also a bit critical. I think that the writer has a valid point about the amount of energy regulations but his view is very one sided. I think that clean energy can benefit communities and can eventually replace oil and natural gas. The author's opinion is that drilling and exporting oil and natural gas is the only way to increase GDP. This seems skewed because the article is supposed to talk about how clean energy damages the environment and there is nothing about that or how drilling affects the environment. I do agree that places where drilling is available do benefit from the increased income but the question is; how long can the areas support a practice that negatively affects the environment around them? I also agree that natural gas doesn't contribute to carbon emissions as much as oil and is a better fuel. I don't understand why the author critiqued the Climate Action Plan because it simply states that money from taxes will help fund clean energy projects. The article states that putting so many regulations on a struggling economy can only have negative impacts and I agree that that is true up to a certain point.

Germany's Expensive Gamble on Renewable Energy- The Wall Street Journal

online.wsj.com/articles/germanys-expensive-gamble-on-renewable-energy-1409106602




My reaction to the article was impressed but also concerned. I thought the ideas about having 80 turbines and being able to power a city the size of Munich were well thought out. The project will also protect the environment which is always a problem with energy. The article was concerning because of the impact on the economy. I thought of the problems that the US would face if Germany's economy started to decline. All of the countries in Europe would be affected because Germany has the largest economy. I disagreed that the project completely disrupt Germany's industrial base. I think it would affect it in the short term but if they keep using the resources and energy the way they are; the industrial base will collapse anyway.
However, I do agree that the logistics of the project could have been overlooked. It seems that way because there are cost overruns and regulation disputes that could disrupt the entire mission. It is a good sign that Angela Merkel is persisting that this project is extremely important because she has a ton of power in Germany.