Economic

Do you ever find yourself wondering where you spent all your paycheck? You are not alone. For so many of us it seems that no matter how much we make we still don't have enough money left at the end of the month to put away towards our retirement, emergency savings or even a well deserved vacation! This article will teach you how to finally break that viscous cycle, budget your money and save.

source:eHOW

WASHINGTON: The global economic recovery has begun but sustaining it will require refocusing the United States toward exports and Asia toward

imports, the International Monetary Fund's chief economist said. In an article released by the IMF on Tuesday, Olivier Blanchard also said potential economic output may be lower than it was before the financial crisis struck.

"The turnaround will not be simple," Blanchard said. "The crisis has left deep scars, which will affect both supply and demand for many years to come." He said US consumption, which accounts for about 70 per cent of the US economy and a large chunk of global demand, would not quickly return to pre-crisis strength as households cope with trillions of dollars in losses from the falling housing and stock markets.

He said the financial crisis had made Americans more conscious of "tail risks" -- events that are unlikely to occur, but when they do have devastating consequences. That means US consumers are unlikely to return to their free-spending ways, and both the United States and its trading partners will have to adjust. Emerging Asian countries, especially China, must play a big role.

"From the point of view of the United States, a decrease in China's current account surplus would help increase demand and sustain the US recovery," he said.

"That would result in more US imports which would help sustain world recovery." But in order for China to boost domestic demand, it will need to provide a stronger social safety net and increase household access to credit, which will encourage its consumers to save less and spend more. "Both higher Chinese import demand and a higher (yuan) will increase US net exports," he said.

source:the economic time

A GLIMMER OF HOPE

• BCI soars 44.1 points quarter-on-quarter to above 100-point threshold
• All eight sub-indices higher quarter-on-quarter
• Only one sub-index - expected production - rose year-on-year
• Lower inventory levels and wage pressures, increased hirings.

source:malaysian institute of economic

How do we sum up the basic economic problem? We all suffer from it and spend most of our lives trying to resolve it. Essentially, the economic problem stems from the fact that as humans, we have unlimited wants and needs. A need is something that can be seen as being essential to survival, such as food, water, shelter and warmth. A want is something that we would like to have but which is not essential to survival - a car, the latest version of the PlayStation, that new top you have seen in Top Shop, the mobile phone with all the latest gadgets on etc.

The problem is that the world and every individual in it have limited resources in relation to the wants and needs we have. We never have enough money to get what we 'want'. There are never enough resources to make sure the health service works properly; teachers and lecturers will always moan about how they never have enough resources to do their job properly. In recent times, we have heard much about the problems faced by the armed forces in conflict zones around the world 'not having the tools to get the job done'.

There have been plenty of news items in recent years about the lack of resources available to the military in dangerous conflict zones such as Iraq and Afghanistan. If we were to increase the number of soldiers, equipment and weapons available to the military, it would have consequences elsewhere. The government has limited funds from taxes, which have to be spent on a wide range of things - if we diverted more funds to the military, there would have to be cuts elsewhere in the government's spending programme - or a rise in taxes. Copyright: Dragon MasterGunner, from stock.xchng.

All these things are symptomatic of the tension between scarce resources and unlimited wants and needs. That is what the economic problem is all about.

At this stage, you might point to the fact that countries like the UK and the United States produce massive amounts of waste every year. You might look at the food that is wasted in restaurants, fast food outlets and even the school canteen every day to wonder why there is so much wasted food, with so many people in the world hungry and on the verge of starvation.

Part of the problem is the fact that resources are not distributed evenly between countries and societies. The terms 'wants' and 'needs' are also relative terms. 'I really, really want a Ferrari' might be the comment of an individual in the UK; 'I really, really want to be able to walk only two miles to get the daily ration of water for my household' might be the cry of an individual in the Sudan. To each individual, they are both important - we might be able to point out that the Ferrari is not really that necessary; a Smart car will do just as well!

Wants, needs and scarce resources - all part of the economic problem. Wants and needs are relative - my burning want might be very different from the wants of someone like the boy in the image above. Copyright: Luca Biagiotti from stock.xchng, Andrew Ashwin, and Luc Sesselle from stock.xchng.

Resources is a specific term used a great deal in economics. It describes all the things available at our disposal that can be used to satisfy our needs. This therefore includes things like our income, which is simply a means of acquiring a range of goods and services. Resources therefore might be the food we buy at shops, clothing, houses, cars, entertainment, metal, minerals, oil, timber, gas, plastics and so on.

In economics, these resources are normally classified into three or four categories. These are:

Regardless of the task, the human resource of labour comes in many different forms. Labour offers its services in exchange for a reward or price - wages. Copyright: Cristina Ortigoso, Mitchell Powell, Joseph Zlomek and Francesco Pacilli, all from stock.xchng.

If we had an unlimited supply of resources at our disposal we would be able to meet any want or need. The problem is, we do not have unlimited resources at our disposal. We therefore have to make choices. Economics, could, therefore, be described as the science of choice.

Choices are made at many different levels.

• You might go into a shop and see two great-looking pairs of jeans but you only have enough money (resources) to buy one of them.
• A hospital manager may have 50 patients all wanting to have an operation immediately but there might only be sufficient resources (doctors, nurses, equipment, rooms, beds etc.) at that time to treat 20 of them.
• A business might have received a major order for its products and wants to increase production but does not have the staff or the equipment and raw materials to meet the order in full.
• An individual in Ethiopia might want a bowl of rice to eat but has to survive on whatever they can scavenge from the parched earth.

All these examples highlight the problem of scarce resources in relation to wants and needs. When we are faced with these choices, we have to go through some quite sophisticated decision making. We might not always be aware that we are making sophisticated decisions but in reality we are. Such decision making is at the heart of the subject of economics and tells us something about how humans try to tackle the economic problem.

source:Bized

Steps

1. Set savings goals. For short-term goals, this is easy. If you want to buy a video game, find out how much it costs; if you want to buy a house, determine how much of a down payment you’ll need. For long-term goals, such as retirement, you’ll need to do a lot more planning (figuring out how much money you’ll need to live comfortably for 20 or 30 years after you stop working), and you’ll also need to figure out how investments will help you achieve your goals.
   
   
   • Kill your debt first. Simply calculating how much you spend each month on your debts will illustrate that eliminating debt is the fastest way to free up money. Once the money is freed from debt payment, it can easily be re-purposed to savings.
2. Establish a timeframe. For example: "I want to be able to buy a house two years from today." Set a particular date for accomplishing shorter-term goals, and make sure the goal is attainable within that time period. If it’s not attainable, you’ll just get discouraged.
3. Figure out how much you’ll have to save per week, per month, or per paycheck to attain each of your savings goals. Take each thing you want to save for and figure out how much you need to start saving now. For most savings goals, it’s best to save the same amount each period. For example, if you want to put a $20,000 down payment on a home in 36 months (three years), you’ll need to save about $550 per month every month. But if your paychecks amount to $1000, it might not be a realistic goal, so adjust your timeframe until you come up with an approachable amount.
4. 
   Keep a record of your expenses. What you save falls between two activities and their difference: how much you make and how much you spend. Since you have more control over how much you spend, it's wise to take a critical look at your expenses. Write down everything you spend your money on for a couple weeks or a month. Be as detailed as possible, and try not to leave out small purchases. Assign each purchase or expenditure a category such as: Rent, Car insurance, Car payments, Phone Bill, Cable Bill, Utilities, Gas, Food, Entertainment, etc.
   • Keep a small notebook with you at all times. Get in the habit of recording every expense and saving the receipts.
   • Sit down once a week with your small notebook and receipts. Record your expenses in a larger notebook or a spreadsheet program.
5. Trim your expenses. Take a good, hard look at your spending records after a month or two have passed. You’ll probably be surprised when you look back at your record of expenses: $300 on ice cream, $100 on parking tickets? You’ll likely see some obvious cuts you can make. Depending on how much you need to save, however, you may need to make some difficult decisions. Think about your priorities, and make cuts you can live with. Calculate how much those cuts will save you per year, and you'll be much more motivated to pinch pennies.
   
   
   • Can you move to a less expensive apartment or house? Can you refinance your mortgage?
   • Can you consolidate your debts so that you're not paying as much interest?
   • Can you save money on gas, or give up a car altogether? If your family has multiple cars, can you bring it down to one?
   • Can you get a better price on insurance? Call around and make sure you are getting the best price you can. Consider taking a higher deductible, too.
   • Can you drop a land line and either only use your cell phone or save money by calling over the internet for free with services such as Skype?
   • Can you live without cable or satellite TV?
   • Can you cut down on your utility bills?
   • Can you restrict eating out? Buy food in bulk? Start using coupons? Cook more at home? You might be able to save a lot of money on food.
6. Reassess your savings goals. Subtract your expenses (the ones you can't live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? And does it match up with your savings goals? Let's say you've decided you can definitely get by on $1500 per month, and your paychecks amount to $2300 per month. That leaves you with $800 to save. If there’s absolutely no way you can fit all your savings goals into your budget, take a look at what you’re saving for and cut the less important things or adjust the timeframe. Maybe you need to put off buying a new car for another year, or maybe you don’t really need a big-screen TV that badly.
7. Make a budget. Once you’ve managed to balance your earnings with your savings goals and spending, write down a budget so you’ll know each month or each paycheck how much you can spend on any given thing or category of things. This is especially important for expenses which tend to fluctuate, or which you know you're going to have a particularly hard time restricting. (E.g. "I will only spend $30 a month on movies/chocolate/coffuee/etc.")
8. Stop using credit cards. Pay for everything with cash or money orders. Don't even use checks. It's easier to overspend when you're pulling from a bank or credit account because you don't know exactly how much is in there. If you have cash, you can see your supply running low. You can even bundle up the predetermined amount of cash allocated for each expense with a label or keep separate jars for each expense (e.g. a bundle/jar for coffee, another for gas, another for miscellaneous). As you pull money from a jar for that particular expense, you'll see how much remains and you'll also be reminded of your limit.
   
   
   • 
     If you need to have credit cards but you don't want the temptation of having them available to use day-to-day, restrict that section of your wallet with a note or picture reminding you of your savings goals.
   • Credit cards are not inherently evil; it's all about your self control. If you use them responsibly (i.e. completely pay them off every month), you can benefit from them. But the reason most credit card companies make money, however, is because people end up spending money that they don't have. Unless you are one of the people who can religiously pay off the balance in full every month, you're better off foregoing the promotions that credit card companies use to lure you in (cash back, introductory APR, airline miles, and so on).
9. Open an interest-bearing savings account. It’s a lot easier to keep track of your savings if you have them separate from your spending money. You can also usually get better interest on savings accounts than on checking accounts (if you get interest on your checking account at all). Consider higher-interest options such as CDs or money-market accounts for longer savings goals.
10. Know where your money is. And how much of it, too. If you accidentally overdraw your bank account, you will incur hefty bank fees; worse yet, the place you paid with that check may slap a bounced check fee on top of that, and send the check in again, resulting in a second overdraft fee from the bank! So just a few cents missing to cover that check could result in over $100 in fees. To avoid that, you should always know how much money you've got in your account(s), so you never cut a check for more than what you have.
    • Look into checking and savings accounts that pay interest. Also, consider CDs (certificates of deposit) for longer-term savings with low risk.
11. Pay yourself first. Savings should be your priority, so don’t just say that you’ll save whatever’s left over at the end of the month. Deposit savings into an account (or your piggybank) as soon as you get paid. An easy, effective way to start saving is to simply deposit 10% of every check in a savings account. If you get a check or sum of cash, say 710.68, move the decimal point one place to the left and deposit that amount: 71.07. This works well and requires little thought; over several years, you've a tidy sum in savings. Over decades, you'll be a millionaire.
    
    
    • You can set up an automatic transfer from your checking account to your savings account.
    • Many employers allow you to deduct savings from your paycheck. The money is directly deposited in your savings account so you never even see it on your paycheck.
    • You can also have investments for retirement taken directly out of your pay, and the taxes may be deferred with this option.

source:http://www.wikihow.com/Save-Money

Executive Summary

The road to global recovery appears to be sluggish and uneven, facing many daunting challenges along the way. Both the World Bank and the IMF are projecting the world economy to slide into a deeper recession in 2009. In Jul'09, the IMF revised its global economic forecast to -1.4 per cent in 2009 ('08: 3.1%), while the global contraction in 2009 is estimated at -2.9 per cent by the World Bank. According to the latest IMF revision, the US ('09: -2.6%) will experience a less severe recession in 2009 compared to Europe which may face a deeper one ('09: -4.8%). The IMF projects the world economy to recover to around 2.5 per cent growth in 2010, with the US recording a meagre 0.8 per cent growth in 2010, slightly higher than the previous zero per cent growth forecast..

As the external sector tumbles, Malaysia's GDP contracted by a steep -6.2 per cent in 1Q09, following a stagnant 0.1 per cent growth in 4Q08. As external demand nose dived, Malaysia's exports dipped sharply in 1Q09, while investment was severely affected as well. Given the deteriorating global economic prospects, a second stimulus package amounting to RM60 billion (about 9% of GDP) was unveiled in Mar'09. Although the second package appears larger, the actual direct spending is only RM15 billion (or 25% of total) to be spent over a two-year period. The recurring concerns have been the speed and efficiency of implementation and the potential leakages. A notable point is the greater attention given to retrenched workers and unemployed graduates. With the second stimulus package, the fiscal deficit is estimated to rise to 7.6 per cent of GDP in 2009, up markedly from 4.8 per cent in 2008.

In a move to make Malaysia more attractive to investors, liberalisation measures have been announced. Starting 22 Apr'09, 27 services sub-sectors were fully liberalised to foreign investors, on the premise that Malaysia lacks expertise and local investments in many of these sub-sectors. Among the sectors opened up are computer and related services, health and social services, tourism services, transport, recreational, business services and shipping. On 30 Jun'09, the long standing 30 per cent bumiputra equity requirement for newly listed companies was removed, making investment conditions less restrictive. This will bring Malaysia's equity market closer to regional benchmarks, but the impact remains to be seen since there are many factors influencing investment decisions

Monthly indicators up to May'09 are still losing momentum markedly, but the rate of decline has eased slightly in some sectors. Industrial output registered a sharp contraction in May'09 (-11.1% year-on-year), but subsiding from a steeper fall (-17.9% ) in Jan'09. Exports have yet to show any stabilising signs, nose diving by -29.7 per cent in May'09, while imports dipped -27.8 per cent. Thanks to reduction in local oil prices and slower rise in food prices, inflation has eased to 2.4 per cent in May'09, down from 3.9 per cent in Jan'09. Inflation will likely subside further in tandem with the softening economy. .

In the wake of the deteriorating global economy and its adverse effects on domestic conditions, Bank Negara reduced the Overnight Policy Rate (OPR) by 50 basis points to 2.00 per cent on 24 Feb'09, the third time in five months. Bank Negara has slashed 1.50 percentage points from 3.50 per cent since Nov'08 and cut the statutory reserve requirement (SRR) to 1.0 per cent, effective Mar'09. Bank Negara has noted that lower rates could hurt savers and those who rely on incomes from deposits. The latest policy meeting on 26 May'09 has decided to leave the policy rate unchanged in view of the persistent effects of the crisis amid early signs of stabilisation in some indicators.

Consumer and business confidence has improved in 2Q09, possibly influenced by the measures taken to support the economy. These include the fiscal stimulus packages, the historically low interest rates, and the recent liberalisation measures. Both the Business Conditions Index (BCI) and the Consumer Sentiments Index (CSI) have passed the 100-points threshold that separates expansion and contraction. The BCI, which is based largely on firm-level information, has gained 44.1 points to stand at 105.2 points in 2Q09, up from 61.1 in 1Q09, indicating that business confidence has regained some strength. Likewise, the CSI has notched up 26.9 points to 105.8 points in 2Q09, up from 78.9 points in 1Q09. Despite the still sharp declines in monthly indicators, the rise in sentiments could have been propped up by the perception that recent measures would stabilise the economy.

TThere are glimmer signs that the global downturn has stabilised somewhat, but the recovery is expected to be sluggish and uneven. The healing from the current crisis will be difficult compared to previous ones because of the synchronised nature of the downturn. It will take time and huge resources to revive the deeply entangled US financial sector while policy options are running out. The weak external sector will impede a faster recovery, and the lower commodity prices are not helping either. Banks are becoming more cautious as bad loans could rise soon, limiting the flow of funds to firms. The services sector will be the pillar of strength amidst a glum manufacturing sector. It is certain that Malaysia's growth will slide into a technical recession in the first half of '09, as it takes the hit from the knock-on effects of a flagging global economy. Malaysia may not regain more strength until the global economy is back on track, which is going to be at a disappointingly slow pace.

In view of the deep declines in macro indicators, the fragile business and consumer confidence, and the still dismal sectoral indices, we have revised Malaysia's growth forecast for 2009 downwards to -4.2 per cent, from -2.2 per cent earlier. If exports and FDI shrink severely, the downturn could be more damaging. We have also downgraded the 2010 growth forecast to 2.8 per cent, from 3.3 per cent previously, in anticipation of a gradual or a ''u-shaped'' global recovery.

source:Malaysian Institute of Economic Research

There are several key elements affecting the overall economy, and the stability or otherwise of each can be integral to your business’s viability for the year ahead. JAMES THOMSON surveys the likely scenarios.

Australian entrepreneurs have started 2009 with one word ringing in their ears: Recession.

Last year we watched as financial markets across the globe went into freefall, but this year the real economy looks set to suffer, as households stop spending, workers get the sack, and businesses are pushed to the brink of collapse.

It’s going to be rough; but there are still some bright spots for canny companies. Export markets should hold up well, the housing sector looks set for modest growth, and interest rates will keep falling.

To help you steer through the mire, SmartCompany has compiled the 10 crucial economic forecasts for your business in 2009.

1. Economic growth

So will we actually fall into a recession as defined by two periods of negative GDP growth? Almost certainly. Most economists believe the economy contracted in the December quarter of 2008 (we’ll get the official confirmation of this in February) and is also likely to contract in the first three months of 2009.

AMP Capital Investors chief economist Shane Oliver is tipping a mild recession as households in Australia and around the world stop spending and reduce debt. But he leans towards an improvement in the second half of 2009 or early 2010.

“Global recession during the next six to nine months (will be) made worse as households in rich countries reduce debt levels. However some sort of recovery should start to become visible during the second half, or at least in 2010. Some of the conditions for global recovery are falling into place, such as falling oil prices, falling inflation, falling bond yields and fiscal and monetary stimulus.”

Most economists are expecting Australia’s GDP will grow between 0.2% and 1.5% in 2009, compared with growth of around 2.25% in 2008. The outlook for 2010 is somewhat better, with economists tipping GDP growth of between 1.7% and 2.5%.

2. Unemployment

The biggest question mark over these economic growth forecasts is the unemployment rate. If unemployment were to rise sharply from the current level of 4.4%, then households will be hit hard and the recession could be deeper than first expected. Stephen Walters, chief economist at JP Morgan, describes households as the Achilles heel of the Australian economy.

“After an extended spending splurge, households embarked on a period of austerity in early 2008. Confidence since has collapsed, owing to plunging equity prices and the onset of global recession, [and] the main headwind for households currently is rising unemployment.”

Walters expects the unemployment rate to double to 9% by the end of 2010, while Westpac chief economist Bill Evans is far more optimistic, forecasting the unemployment rate will rise to 5.3% by the end of 2009 and 6.1% by the end of 2010.

3. Business investment

The key to just how far the unemployment rate rises will be whether businesses are willing to continue to invest and employ. While most economists agree business is far better placed (mainly thanks to lower debt levels) than in previous recessions, difficulties in securing credit and falling commodity prices have severely dented confidence.

“If, as we expect is happening in the US, businesses change their operating model from profit maximisation to debt minimisation and cash hoarding, then Australia's growth prospects are precarious,” Evans says. “Businesses would persist in delaying investment and hiring, which would in turn intensify households' concerns about job prospects.”

Evans is predicting business investment growth of -6% in 2009 and zero in 2010, while Walters is predicting a fall from 11.4% in 2008 to -5.1% in 2009 and -7.8% in 2010. But it is worth noting that there are clear risks that the slump in business investment could be far greater – as Evans points out, business investment fell by 20% in 1990 and 1991 during the last recession.

4. Public sector spending

Governments around Australia have valiantly attempted to pick up the slack from the fall in household and government spending. “We anticipate a nearly 7% rise in public spending in real terms in 2008 as the central Government deploys the federal budget surplus,” Walters says.

As well as direct handouts and tax breaks for individuals, governments around the nation are set to launch aggressive infrastructure spending plans to stimulate activity and create jobs. But that won’t necessarily be easy, as Stephen Halmarick, managing director of economic and market analysis at Citi Australia, points out. “The challenge will be to have the projects up and running as soon as possible – this won’t be easy – (and) ensure the projects are ‘worthwhile’.” Another challenge for state governments will be getting funding for projects given the tight credit markets.

5. Interest rates

The big question with interest rates is; how low can they go? The Reserve Bank of Australia cut rates hard over the final few months of 2008, taking the official cash rate from 7.25% to 4.25% between September and December.

Most economists are tipping the official cash rate will be cut to 3.5% by March 2009 (which implies cuts are likely in February and March) although it is clear that the official rate could fall further. “Given that the flow of economic data for the global economy continues to deteriorate, and our forecast of recession in Australia, we expect the Australian cash rate to be lowered to 3% by March 2009,” Citi’s Halmarick writes.

6. Housing market

The housing market should get some sort of boost from sharply lower interest rates and the stimulus created by the beefing up of the first home buyers’ grant. On top of this, it’s worth noting that Australia’s housing market remains clearly undersupplied, with Westpac’s Evans estimating the shortage has reached around 140,000 dwellings – almost a full year's production.

“While Westpac's forecast of a solid recovery in dwelling investment in 2009 may prove to be over optimistic, there seems little chance that the style of collapse in residential investment that we have seen in previous recessions will occur in 2009 or 2010.”

JP Morgan’s Walters is tipping a 2% rise in dwelling investment in 2009.

7. The Australian dollar

The rapid fall in the dollar has put huge pressure on Australian business, with a recent survey from Dun & Bradstreet revealing 70% of firms have been negatively affected by the dollar’s slide. Unfortunately, the Aussie dollar looks set to fall further as the RBA cuts rates. ANZ chief economist Saul Eslake expects the dollar to be trading at around US55c by the end of 2009. That could force many Australian companies to put their prices up even further in 2009.

8. Trade

While the dollar will help exporters, the onset of a global recession and lower demand for Australian commodities (particularly resources) will result in exports falling but not collapsing –Walters is tipping a 4% fall in export volumes. On the flip side, imports are likely to fall as a result of sagging consumer spending. Import prices are likely to rise due to the falling Australian dollar.

9. Inflation/deflation

The war on inflation appears to be well and truly won, with most economists predicting inflation will fall rapidly, hitting the RBA’s target band of 2% to 3% by the middle of 2009. In fact, AMP’s Oliver believes deflation may be more of a problem, as he explained in this SmartCompany article. If the global recession is particularly deep and prolonged, Oliver may just be right.

10. China

Many of the forecasts outlined above will depend on what happens to the global economy, and particularly the economy of China, Australia’s largest trading partner and second largest export destination. If China’s economy is to slow dramatically, Australia’s economic downturn could be far worse than first thought.

Then again, if China can rebound, Australia will be a key beneficiary. Su-Lin Ong, senior economist and fixed income strategist at RBC Capital Markets, expects the authorities will have little choice but to stimulate the economy and prevent a rise in Chinese unemployment and social unrest.

“The challenges are considerable, but China ultimately remains on a long run upward trend as it urbanises, industrialises, and lifts its living standards,” she says. “Resource-rich Australia remains a key beneficiary.”

China’s rapid growth propelled Australia’s economy to great heights in the last decade. Let’s hope there is some fire in the dragon yet.

Abstract

This paper examines whether the climate policy options policymakers are contemplating are compatible with core principles of the world trading system set forth in the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), and Appellate Body decisions. The authors argue that border measures—both import restrictive measures and export subsidies—contemplated in US climate bills and the climate policies of other countries stand a fair chance of being challenged in the WTO. Given the prospect of foreseeable conflicts with WTO rules, the authors suggest that key WTO members should attempt to negotiate a new code that delineates a large “green space” for measures that are designed to limit GHG emissions both within the member country and globally. By “green space,” the authors mean policy space for climate measures that are imposed in a manner broadly consistent with core WTO principles even if a technical violation of WTO law could occur. To encourage WTO negotiating efforts along these lines, the authors recommend a time-limited “peace clause” to be adopted into climate legislation of major emitting countries. The peace clause would suspend the application of border measures or other extraterritorial controls for a defined period while WTO negotiations are under way.

source:http://www.economics-ejournal.org

WASHINGTON – Using better-than-expected jobs numbers to press his top domestic priority, President Barack Obama is arguing that overhauling the health care system is essential to the country's economic well-being.

Republicans countered that the high unemployment rate — 9.4 percent in July — shows how families and businesses are struggling and that Obama's reliance on a large government role in expanding health coverage is the wrong approach.

A net total of 247,000 jobs were lost last month, the fewest in a year and a drastic improvement from the 443,000 that vanished in June as the U.S. tries to pull out from the worst recession since World War II.

"We've begun to put the brakes on this recession and ... the worst may be behind us," Obama said in his weekly radio and Internet address Saturday. He cited Friday's Labor Department report that showed a dip in unemployment, but said, "We must do more than rescue our economy from this immediate crisis. We must rebuild it stronger than before."

He added: "We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform."

It's a pitch that comes as the Democratic-controlled Congress struggles to write a health care plan that meets Obama's goals of expanding coverage to millions of uninsured while reining in exploding costs.

"So far they have produced a measure that they cannot sell even to their own members," Senate GOP leader Mitch McConnell said in a jab at majority Democrats. "The only thing bipartisan, so far, is the opposition."

With lawmakers embarking on a monthlong summer break, opponents and supporters of various proposals under consideration are waging fierce campaigns. Obama is redoubling his effort to explain his positions to a public that polls say is becoming increasingly wary he can deliver on his promise to revamp health care.

The president argued that Congress was close to finalizing "real health insurance reform" but, as he has for weeks now, he warned against listening to opponents who he said were spewing misleading information and outlandish claims to defeat "the best chance of reform we have ever had."

Obama was getting a boost from Secretary of State Hillary Rodham Clinton, who as first lady led the failed effort in the 1990s to overhaul health care.

In an interview with CNN set to air Sunday, Clinton called Congress' latest work on the issue "a very healthy process," though she acknowledge serious differences in viewpoints that must be bridged.

Even so, she said: "I actually agree that at the end of the day, with all of this negotiation and back and forth, you know, we're going to come up with something" and "my hope is that it's going to be meaningful enough to make a difference ... on the cost side."

Countering the Democratic position, Bob McDonnell, the Republican nominee for Virginia governor, argued that the new Labor Department report was "yet another reminder that families and small businesses are struggling as unemployment remains high."

In the GOP's response address, McDonnell sought to draw distinctions between Republicans and Democrats on economic and health care policy.

"As Republicans, we believe you create jobs by keeping taxes and regulation low, and litigation at a minimum. Americans succeed when government puts in place positive policies that encourage more freedom, and more opportunity," he said.

McDonnell also said that, unlike Democrats, Republicans are committed to helping the uninsured — "not through nationalizing the system with a costly government-run plan, but rather by supporting free-market incentives and helping small-business owners make coverage more accessible and affordable, and ensuring that Americans can keep their individual private policies."

source:http://news.yahoo.com/s/ap/20090808/ap_on_go_pr_wh/us_obama_health_care

HONG KONG, Aug. 8 (Xinhua) -- Leading indicators suggest that the global recession is coming to an end and the world economy is on the road to a policy-induced recovery, a senior economist of the Moody's Economy.com said in a latest report.

"The OECD's composite leading indicators signal that the worst is over," Tu Packard said in the global outlook report released Friday by Moody's Economy.com, the research unit of Moody's Corporation, which is independent of Moody's Investors Service.

The OECD refers to the Organization for Economic Cooperation and Development.

Packard said he saw significant improvement in the world economic map in July, as compared with that in January.

Ample liquidity provided by central banks has helped stabilize the financial markets and credit conditions and bank liquidity has been improving, he said.

In Asia, China and India are again picking up growth momentum and are the first to recover from the impacts of the global financial turmoil and economic slowdown. Indonesia and Bangladesh are still members of the expanding growth club.

Turkey and South Korea, which enjoyed broad-based growth in the second quarter, are projected to have an early recovery. South Korea and other industrialized Asian economies are also benefiting from a strong recovery in the electronics industry.

But Japan remains in the slowdown phase, still troubled with high unemployment and massive overcapacity in manufacturing.

In the Middle East, Egypt and Syria are still growing.

In Latin America, the recession will be brief and mild thanks to the help of monetary expansion and increased government spending on infrastructure.

The Eurozone gross domestic product is forecast to contract by over 4 percent this year, but the seasonally adjusted pace of decline will slow in the second half.

Most notably, China has been trying to shift its growth drivers and deploying vast resources to strengthen domestic demand and further develop infrastructure, including green technologies. Household spending is holding up well, with retail sales growth averaging about 15 percent year on year.

The import composition also shows China's effort to shift to domestic demand-led growth. Moreover, it is also contributing to the recovery of other economies with its demand for raw materials resulting from increased spending on infrastructure.

"This ... also helped spur industrial production" in Taiwan as well as South Korea, Japan and Germany, Packard said in the report.

The Chinese locomotive will help shore up the world economy for a time. Nevertheless, a strong global recovery will only take place when the United States economy starts to grow again in earnest, which will depend on easing credit conditions.

Packard said the main downside risks have to do with the still fragile financial sector, especially non-performing loans extended by Europe to East Europe, and that the influenza A/H1N1 was also a source of further uncertainties.

The first economist in the true meaning of the word was the Scotsman Adam Smith (1723-1790). He defined the elements of a national economy: products are offered at a natural price generated by the use of competition - supply and demand - and the division of labour. He maintained that the basic motive for free trade is human self interest. The so-called self interest hypothesis became the anthropological basis for economics. Thomas Malthus (1766-1834) transferred the idea of supply and demand to the problem of overpopulation. The United States of America became the place where millions of expatriates from all European countries were searching for free economic evolvement. In Europe wild capitalism started to replace the system of mercantilism (today: protectionism) and led to economic growth. The period today is called industrial revolution because the system of production and division of labour enabled the mass production of goods.


source: wikipedia.org

Dark Victory
Walden Bello with Shea Cunningham and Bill Rau
Third World Network
ISBN: 983-9747-10-X 148 pages 14x21.5cm
Third World: US$6.00
Others: US$9.00

Hunger and malnutrition stalk the countries of the South. Over the last twenty years, as the populations of Third World countries have increased, so too has mass poverty on a grotesque scale.

In this fiercely critical study of Western aid giving. Walden Bello offers a persuasive argument that recolonisation of the Third World has been carried out through agencies of the international Banks. Bello argues that the Reagan administration came to power with an agenda to 'discipline the Third World' and the consequences of such a policy has resulted in lower barriers to imports, the removal of restrictions on foreign investments, privatisation of state owned activities, a reduction in social welfare spending, wage cuts and devaluation of local currencies. Recipients of any lending from the World Bank, or any other Western agency, have been forced to accept such policies, with disastrous consequences.

Contents

About the Author and his Associates
Acknowledgements
Foreword by Susan George
List of Acronyms

1 Introduction: the Great Reversal Springtime of Freedom.....or Time of Troubles?
Global Rollback
Conspiracy or Ideology?
Dismantling the Activist State
Barbarians at the Gates

2 Challenge from the South Southern Sunrise
State and the Market in the Third World
Diversity and Unity

3 Liberalism and Containment
Liberalism and Anti-Communism: the Peculiar Mix
The Collapse of Containment Liberalism

4 Reaganism and Rollback The Worldview of Reaganism
The Reaganite View of the South
The Vulnerable South
Harnessing the World Bank
Selling SALs
The Debt Crisis and the Globalization of Adjustment

5 Adjustment: the Record A sorry Record at Best
Explaining Stagnation: 'Macro-Shocks' or Structural Distortions?
The Southeast Asian Case
Prescription for Stagnation
Mexico: Model Reformer?
Chile as an Economic Laboratory
Ghana: Beacon for Africa?

6 Adjustment: the Costs Misery: a Global Survey
Questionable Evidence
Adjusting the Environment
Intensified Resource Extraction in Chile
Adjustment and Deforestation in Costa Rica
SAP and Ghana's Environment
Intesifying the Philippine Environment Crisis

7 Adjustment: the Outcome
Ending the Creditors' Crisis
The New South

8 Resubordinating the NICs
From Allies to Targets
Penalizing Success: the Case of South Korea
Unilateralism
Universalized GATT as a Weapon
'The One and Only Path'

9 Adjusting America
Political Economy of the New Deal
State Collapse of the Social Contract
Reaganism: from Ideology to Policy
The Coming of the 'Service Economy'
NAFTA: Securing a Cheap Labor Preserve
The Third Worldization of America
Accelerating Decline
The 'Human Capital' Question
US Capital and Global Adjustment

10 The Dark Victory
Shutting out the South
Protracted War
The 'Islamic Threat'
Heading off Disaster

11 Epilogue: the Battle for the 21st Century
The Faces of Barbarism
No Room for Nostalgia
Checking Capitalism's Logic
Cooperation and Competition
Internationalizing Cooperative Organization
The Struggle for the Future

Notes and References

Appendix: Tables
1: IMF and World Bank Stabilization and Structural Adjustment Loans, 1980-1991
2: Rates of Poverty and Indigence in Selected Latin American Countries
3: External Accounts of Selected Third World Countries, 1982 and 1991
4: Voluntary Export Restraints and Related Measures Imposed by the US, 1980-1991
5: Shares of US Family Income Going to Various Fifths, and to Top 5% 1973-1991
6: Changes in Distribution of US Net World, 1962-1989
Glossary
Selected Readings
Index

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults.^[1][2]

Many economists have offered theories about how financial crises develop and how they could be prevented. There is little consensus, however, and financial crises are still a regular occurrence around the world.

Keys to Financial Success

The birth of a child is an occasion of extreme happiness for the family. However, it comes along with an additional responsibility for the parents, which is not just physical and mental, but also financial in nature. It is the wish of every parent to provide the best possible upbringing, which among other things would include quality education and financial security.

Most parents today want to start planning for their child's future as soon as the child is born. Financial planning for children entails the creation of a corpus for expected future expenses such as higher education and marriage, and also ensuring that there is an adequate security cover during their growing years.

The first important step in planning for a child's future is to determine the amount of expenditure which would have to be incurred in future on different goals such as education, marriage etc. Since these goals may be in the distant future, you must consider the impact of inflation. For example, if the cost of higher education is Rs 15 lakhs today, assuming an inflation of five percent, this cost will rise to Rs 31 lakhs after 15 years.