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Blog Post 4

Blog Post 4
One of the biggest things that college students have to deal with is management; management of whatever – school studies, socializing, exercising, etc. Time and money are basically the two major areas that most college students, and adults for that matter, have to manage. While I was on the Finance section of Yahoo’s website, I found the article “What I Wish I Had Known About Money When I Was 21” by Gerri Detweiler. At 21 years of age, many people begin the transition from college to the “real world” and begin to take up a new priorities, concerns, and responsibilities. While many at that age are focused on starting a successful career, some face the problem of not managing their money effectively and efficiently early on, which consequently affects them later on. This is what the Yahoo article observes, and it offers tips for 21 -year olds that will assist them financially now and in the future. One of the most prominent tips I saw in the article was to start saving young. The article quoted financial columnist and author Kathy Kristof, who explained how impactful important compound interest is, and why you should start saving at a younger age. As the article mentions, by starting young you allow compound interest to save you a lot of money by the time you are ready to retire. Also, as your financial obligations increase with your age, having savings from an early age helps you to not stress as much over those finances. This is what Kristof was quoted as saying:

…by starting young, you let compound interest do most of the work for you. Consider….if you saved $250 a month starting at age 25, when you’re 65, you would have $1,581,000 (and change). The total amount that you saved was $120,000. If you wait until you’re age 35, your nest egg will be one-third as large — $565,000. In fact, if you save from 25 to 35, you could stop saving completely and still be better off than the person who started at 35 and saved for the rest of their career. That’s compound interest for you….Einstein reportedly called it the most powerful force in the universe.

Other tips they offer include: learning to cook can allow you to make tasty and nutritious meals yourself and save money while doing so; live with roommates; and don’t buy a car unless you live in a city where it is a necessity; don’t buy a house unless you are sure you will want to live there for at least five year; don’t spend too much on happy hour or casinos; and, you need a budget.

As far as credit cards go, here is some credit advice they presented: “Don’t charge anything that will be gone when the bill arrives — dinners out, concert tickets, etc…Yes, we know about rewards cards, but if you’re new at handling your finances independently, it’s smart to establish the habit of paying the balance in full every month before applying for a card that incentivizes spending.” Of course, people do not have to save every penny now and wait to enjoy it later. People should be able to enjoy their earnings in the present, but to do so they need to have taken proper care of their money. It is imperative to think about how to spend your time and money, “…even when you have plenty of the former and not so much of the latter.” You need to know what your main priorities are, and do not be afraid to spend money on the things that are most important to you.

Detweiler, Gerri. “What I Wish I Had Known About Money When I Was 21.” Yahoo. 4 May 2014. Web. 5 May 2014.

Research Paper Draft 3

Daniel Kaljaj
English 201
Prof. Papaioannou
April 21 2014
Research Paper 3rd Draft

Each year the United States government presents a document of their proposed revenues and expenditures for the financial year – the federal budget. The two key components of the budget are revenues and expenses. Most U.S. residents know that the taxes they pay go to the government; and those taxes are the source of government revenue. While information about the federal budget is made available to the public and demonstrates how the government spends money, it can be quite complex and difficult to comprehend. Many people have probably wondered what happens to the money they pay the government each year. Where does it go? Since it is the money of the nation’s people, they should be aware of how their money is being used, and hopefully I can help to convey a clearer depiction of the budget. Government expenses consist of paying for current goods and services, government investments (such as infrastructure investment or research costs), transfer payments (such as unemployment or retirement benefits). Furthermore, the government expenditures can be broken down into three groups: mandatory spending, discretionary spending, and interest on debt – all of which have groups or causes that receive funds from the government. One of the larger recipients of federal money is the military. Spending on the military has been a topic of heated debate, and numerous controversies have surrounded it. Looking at the big picture, there may be reason to believe that portions of military funds should be redistributed in order to finance other sectors.

First, before getting into all the military talk, it is essential to have some form of understanding about how the federal budget and its components work, and that will help to really gauge the level of military spending and put it into perspective. Recall that the federal budget is divided between mandatory spending, discretionary spending, and interest on debt. Sure, those are what the types of spending are called, but now what specific forms of spending consist within each of them? Let us begin with the smallest of the three categories, interest on debt. (Well, according to the website of the National Priorities Project, the federal budget for 2015 is expected to spend $251 billion on interest on debt – so much for being small!) The National Priorities Project is a nonprofit, non-partisan federal budget research organization aiming to make the multifaceted federal budget transparent and accessible to the American public. According to the Federal Budget 101 webpage on their website, interest on debt “…is the interest the government pays on its accumulated debt, minus interest income received by the government for assets it owns.” While the 2015 budget calls for $251 billion to be spent on debt, that amount is only 6.3% of the total spending the U.S. government will do (www.nationalpriorities.org). Therefore, it is imperative to look at the other two categories, which make up a bulk of the government’s spending.

When it comes to mandatory spending, it makes up approximately two-thirds of all federal disbursements. It principally consists of earned-benefit or entitlement programs. The biggest mandatory program is Social Security, which encompasses over a third of mandatory spending and about 22 percent of the total federal budget (www.nationalpriorities.org). The spending for those programs is decided through eligibility rules instead of the appropriations process. To grasp how this works, consider this example: “…Congress decides to create a program like the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. It then sets criteria for determining who is eligible to receive benefits from the program. The amount of money spent on SNAP each year is then determined by how many people are eligible and apply for benefits” (www.nationalpriorities.org). Consequently, Congress is not able to decide each year whether or not to increase or decrease the budget for food stamps; however, it can evaluate the rules in order to be eligible and may modify them in order to exclude or include a greater number of people. According to the National Priorities Project website, the spending of the approximately $2.4 trillion on mandatory programs is divided as follows: social security, unemployment, and labor (51 percent of mandatory spending); Medicare and health (36 percent); transportation (5 percent); veteran’s benefits (3 percent); and food and agriculture (5 percent).

Moving on, the next part of the federal budget is discretionary spending. It constitutes the portion of the budget which, unlike mandatory spending, does go through the yearly appropriations process. This means that Congress directly establishes the level of spending on programs which are discretionary (in other words, optional; flexible). The government can elect to raise or reduce spending on any of the discretionary programs in a given year. The proposed discretionary budget for 2015 is projected to amount to about $1.16 trillion, and it is within this part of the federal budget that funding for the military is categorized into. Of the $1.16 trillion dollars, total military expenditures for 2015 are expected to be over 55 percent of that. Along with military spending, other programs include education (6 percent of proposed 2015 discretionary budget), energy and environment (3 percent), government (6 percent), transportation (3 percent), labor (2 percent), veteran’s benefits (6 percent), housing and community (5 percent), science (3 percent), health (5 percent), international affairs (3 percent), and food and agriculture (1 percent). (www.nationalpriorities.org).

Now that the basic composition and functions of the United States’ federal budget has been established, we are better equipped to delve into the topic of military expenditures. For the fiscal year 2015, which begins in October 2014, the Obama Administration requested $495.6 billion for the Department of Defense base budget, as well as $26.4 billion for the “Opportunity, Growth and Security Initiative” (OGS), an initiative intended to invest additional funds “…in readiness, accelerate procurement of major weapon systems and military construction to improve facilities” (www.nationprioprities.org). Furthermore, this budget request also consists of funding for nuclear weapons, military assistance to foreign militaries, and wars overseas. Excluding war funding, the budget contains $549 billion for military programs. However, once projected war costs are factored in, the 2015 budget proposal would aim to spend a total of $648 billion on all military programs. Again, that $648 billion would be approximately 55 percent of discretionary spending, and 16 percent of all federal spending for 2015. Since the military budget is so massive, it is no wonder that it has drawn a great deal of attention, and consequently a lot of criticism. So what makes the military spending so controversial? What have pundits been saying about it in recent years?

There are various reasons that the United States military budget has been the topic of heated debates. One of those reasons is the sheer magnitude of funds the military receives. While taking up over half of the discretionary budget might seem excessive to some, proponents of that level of spending claim that the amount of money being used on the military is appropriate. Some reason this stance by claiming that the budget needs to be high in order to keep the nation safe from and to deal with terrorism, war, and threats created by the constant uncertainty in the world. The United States has, however, sought to make some form of cuts to the military budget (minor as they may be), and that has further fueled the debate over whether the budget should be cut back or not. In the piece “The Force” from the New Yorker, author Jill Lepore includes examples of people who presumably support maintaining the level of military spending: “General Peter Pace, of the Marine Corps, insisted that it was inappropriate to look at defense ‘from a dollar-and-cents perspective.’ Better to count risks and threats: Iran, North Korea, and, looking ahead, China.” Lepore also included the following statement from General Richard B. Myers of the Air Force, “‘…the world is a more dangerous and uncertain place today than it has been for decades’”. There are increasing levels of instability in Russia, Ukraine, and Korea, as well as continuing concern about the potential of foreign countries developing nuclear weapons and the risk that those weapons could fall in the wrong hands. In addition, given that many nations across the globe have rather hostile views of the United States, it is understandable that many Americans will feel unsettled and edgy. In fact, there has apparently even been some change of opinion among the U.S. populous regarding military spending. In his article “Americans Divided in Views of U.S. Defense Spending”, Jeffrey M. Jones examines the results of a Gallup poll that was based on telephone interviews conducted from February 7 through 10 in 2013, with a random sample of 1,015 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. The results indicated that 36 % of the participants claimed the U.S. spends the right amount on the military and national defense, while 35% believed it spends too much, and 26% said it spends too little. There did not seem to be a clear consensus among those polled. Furthermore, there appears to have been a shift in recent American views between believing the country spends an excessive amount on the military and believing it spends the right amount. The last few years saw a majority of Americans in such polls indicate that too much was being spent on the military, yet this 2013 poll exhibits approximately equal percentages of Americans holding each view. Perhaps the recent developments of conflict in nations worldwide – Korea, Syria, and Russia to name a few – have brought ominous feelings among some U.S. residents. Some question, however, if this worry may be a bit irrational, and if cuts to the defense budget should really alter people’s views on the military budget.

Opponents of the United States’ military spending derive part of their criticism from the amount of money spent on the military in the United States in comparison to other countries. In the online piece “U.S. Defense Spending vs. Global Defense Spending”, author Laicie Heeley observes data from the United States 2012 military budget. The amount that was approved for defense spending for the 2013 fiscal year, according to Heeley’s article, was $645.7 billion. She writes that this amount is “…six times more than China, 11 times more than Russia, 27 times more than Iran and 33 times more than Israel.” Consider the nations she includes here – China, Russia, Iran, and Israel. These are considered among the United States’ largest real or potential enemies, and the amounts they spend on military pale in comparison to the United States. The article also offers some interesting information through visuals. A pie chart in the piece reveals that the United States accounted for approximately 40% of all military expenditures in the globe as recently as 2012. Furthermore, a diagram shows that in 2012, the United States spent more on their military than the next 15 countries. What does all of this imply? That the United States remains the world’s most dominant military power, and evidently it is not even close. During a recent interview I had with Joan Katen, a professor at Pace University, we discussed military spending, along with thoughts related to it. I asked Professor Katen why she believes so many people are reluctant to have military expenditures reduced, to which she exclaimed: “People have a natural fear they won’t be protected, I believe. They don’t see we overspend. We should spend on the military, but only what we really need to spend. We should reevaluate our expenditures.” I also asked if she believes cuts to the military budget would make the U.S. more vulnerable to threats and danger; Professor Katen stated that she believes “We need to have a sleek, efficient military”, however, “the budget is so extensive that I don’t think that, if we took out military spending in a smart way, it would make us vulnerable”. From the Generals mentioned in Lepore’s “The Force” to the ideas shared to me by Professor Katen, these examples of differing perspectives are one reason why the debate of defense cuts has generated so much heat. On one hand, the current instability in the world may have caused fear and worry to rise among Americans, and so many feel that maintaining the high military budget is not only appropriate, but necessary to keep the nation safe. On the other hand, advocates for cutting the defense budget argue that, since the U.S. is so far ahead of every other nation in the strength of their military, cutting a small percentage of military funds would not weaken the U.S. military so severely that the country would be at a major risk. This side of the debate would seem to believe that a recent rise in fear among the American public, as presented by the Gallup poll, is unnecessary and even irrational given the nation’s military expenditures in comparison to other nations. also

The controversy regarding military expenditures does not end there. The state of the economy has been a point of interest for both proponents and opponents of military deductions. Veronique de Rugy writes, in his article “Six Degrees of Military Spending”, that the Department of Defense is the single biggest employer in the U.S. with 2.3 million workers. Rugy further states that “The defense industry, which is the main private-sector recipient of defense dollars, directly or indirectly employs another 3 million people”. With such levels of employment, it likely makes cutting military spending difficult. In his article, Rugy highlights the issue – in relation to military funding – of lobbyists and the arms industry. First, to specify what the arms industry is, it is a global business that produces weapons, technology and equipment typically used by the military. Arms producing companies, also called defense contractors, manufacture arms mainly for the armed forces of states. Departments of government operate in the arms industry as well, buying and selling products that include guns, ammunition, missiles, military aircraft, military vehicles, ships, electronic systems, and more. The arms industry also conducts significant research and development. Now, returning to Rugy’s article, he writes “The money blasting out from Washington is notoriously — and predictably — misspent. Congress reliably fails to apply any kind of meaningful oversight over military spending… Individual members of Congress make things worse by pushing for whatever weapons system or aircraft engine that can be produced in their district, regardless of whether the Pentagon wants it” (Rugy). This seems to indicate that the choices members of Congress make with regards to how military money is spent (which weapons and equipment are purchased) are being influenced by factors that may be more in line with their own personal or political agendas. Rugby mentions, referencing the Center for Responsive Politics, that the U.S. defense and aerospace lobby gifted $24 million to political campaigns and committees during the 2008 campaign cycle, while in 2011 it used close to $60 million on lobbying. To illustrate this further, consider this example given by David R. Henderson (The Hoover Institution economist) from a July 2012 Mercatus Center working paper which Rugy brings up in his piece: “House Speaker John Boehner (R-Ohio) pushed to fund an alternate engine for the F-35 joint strike fighter over the objections of Defense Secretary Robert Gates (who said it ‘would be a waste of nearly $3 billion’), simply because the engine’s manufacturer had ‘about 1,000 employees working on the engine in a facility near Cincinnati’ at the time”. To add to all this, Rugy claims that “In order can gain better access to their regulators and government funds, companies hire lobbyists who used to work for Congress or government agencies. Of the 408 lobbyists employed by the military industry to apply pressure on Congress, 70 percent used to work on Capitol Hill”. There seems to be something irregular occurring here, which is yet another reason why so much criticism and commotion has been caused by military spending. Defense lobby groups appear to be operating in a conniving manner, and perhaps even in a way that is a conflict of interest seeing as the lobbyist employees may be more interested on getting their hands on federal funds and pushing for excessive and unnecessary the sale of some of the arms industry products.

I even came across this specific topic in my sit down with Professor Katen. During our discussion, she mentioned, with regard to military funding, that “We should have enough to protect ourselves, but we tend to spend too much on military hardware that we don’t use or is too expensive”. That ties into to what we just observed – that being potentially corruptive lobbyists influencing government to spend more than is necessary on products for the military. In fact, when I asked Katen why she thinks the U.S. spends as much as it does on the military, she answered: “I think part of it is that the producers of military equipment have very good lobbying organizations working for them. There are lobbyists in the Congress, and they lobby the congressman and senators so that they will OK more equipment. We need to have a strong military, but I believe the lobbyists are pushing the Congress to get more military equipment than we need”. I also asked her if and how military spending could be improved, to which she offered the following: “I think we have to really take an unbiased look at where we are spending the funds allocated for the military, and we have to somehow remove ourselves from the lobbyists. Not let the lobbyists have the last word on what we should buy, or get, or do. They have a tremendous influence on the government”. It is evident that the work done by these defense lobby groups has stuck out, and in a controversial way indeed. Earlier, we observed how much federal money is planned to be allocated towards for military purposes in 2015. After taking into consideration the influence of lobbyist groups, one wonders how much of that budget is caused by the work of lobbyists and is really unneeded. There is clearly reason for people to be angered when billions of excess dollars go to the military, when they could be put to better use elsewhere.

Research Paper 2nd Draft

Research Paper 2nd Draft

Each year the United States government presents a document of the government’s proposed revenues and expenditures of the financial year – the federal budget. It is also referred to as the Annual Financial Statement of the country. The two key components of the budget are revenues and expenses. When it comes to the government, revenues originate mainly from taxes. Most United States residents know that the taxes they pay go to the government. I would assume that many of those people have probably wondered what happens to all that money. Where does it go? Since it is the money of the nation’s people, they should be aware of which causes the government funds go to. Government expenses consist of paying for current goods and services, government investments (such as infrastructure investment or research costs), transfer payments (such as unemployment or retirement benefits). Furthermore, the government expenditures can be broken down into three groups: mandatory spending, discretionary spending, and interest on debt. A topic of great debate pertaining to the government budget and its expenditures has been spending on the military. What are some of the controversies regarding military spending? Looking at the big picture, why should portions of military funds be redistributed in order to finance other sectors?

First, before getting into all the military talk, it is essential to have some form of understanding about how the federal budget and its components work, and that will help to really gauge the level of military spending and put it into perspective. Recall that the federal budget is divided between mandatory spending, discretionary spending, and interest on debt. Sure, those are what the types of spending are called, but now what specific forms of spending consist within each of them? Let us begin with the smallest of the three categories, interest on debt. (Well, according to the website of the National Priorities Project, the federal budget for 2015 is expected to spend $251 billion on interest on debt – so much for being small!) The National Priorities Project is a nonprofit, non-partisan federal budget research organization aiming to make the complex federal budget transparent and accessible to the American public. According to the Federal Budget 101 webpage on their website, interest on debt “…is the interest the government pays on its accumulated debt, minus interest income received by the government for assets it owns.” While the 2015 budget calls for $251 billion to be spent on debt, that amount is only 6.3% of the total spending the U.S. government will do (www.nationalpriorities.org). Therefore, it is imperative to look at the other two categories, which make up a bulk of the government’s spending.

When it comes to mandatory spending, it makes up approximately two-thirds of all federal disbursements. It principally consists of earned-benefit or entitlement programs. The biggest mandatory program is Social Security, which encompasses over a third of mandatory spending and about 22 percent of the total federal budget (www.nationalpriorities.org). The spending for those programs is decided through eligibility rules instead of the appropriations process. To grasp how this works, consider this example: “…Congress decides to create a program like the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. It then sets criteria for determining who is eligible to receive benefits from the program. The amount of money spent on SNAP each year is then determined by how many people are eligible and apply for benefits” (www.nationalpriorities.org). Consequently, Congress is not able to decide each year whether or not to increase or decrease the budget for food stamps, however, it can evaluate the rules in order to be eligible and may modify them in order to exclude or include a greater number of people. According to the National Priorities Project website, the spending of the approximately $2.4 trillion on mandatory programs is divided as follows: social security, unemployment, and labor (51 percent of mandatory spending); Medicare and health (36 percent); transportation (5 percent); veteran’s benefits (3 percent); and food and agriculture (5 percent).

Moving on, discretionary spending constitutes the portion of the budget which, unlike mandatory spending, does go through the yearly appropriations process. This means that Congress directly establishes the level of spending on programs which are discretionary (in other words, optional; flexible). The government can elect to raise or reduce spending on any of the discretionary programs in a given year. The proposed discretionary budget for 2015 is projected to amount to about $1.16 trillion. The discretionary spending budget is where the funding for the military is categorized into. Of the $1.16 trillion dollars, total military expenditures for 2015 are expected to be $648 billion – over 55 percent of the discretionary budget. Along with military spending, other programs include education (6 percent of proposed 2015 discretionary budget), energy and environment (3 percent), government (6 percent), transportation (3 percent), labor (2 percent), veteran’s benefits (6 percent), housing and community (5 percent), science (3 percent), health (5 percent), international affairs (3 percent), and food and agriculture (1 percent). (www.nationalpriorities.org).

Now that the basic composition and functions of the United States’ federal budget has been established, we are better equipped to delve into the topic of military expenditures. For the fiscal year 2015, which begins in October 2014, the Obama Administration requested $495.6 billion for the Department of Defense base budget, as well as $26.4 billion for the “Opportunity, Growth and Security Initiative” (OGS), an initiative intended to invest additional funds “…in readiness, accelerate procurement of major weapon systems and military construction to improve facilities” (www.nationprioprities.org). Furthermore, this budget request also consists of funding for nuclear weapons, military assistance to foreign militaries, and wars overseas. Excluding war funding, the budget contains $549 billion for military programs. However, once projected war costs are factored in, the 2015 budget proposal would aim to spend a total of $648 billion on all military programs. That would be approximately 55 percent of discretionary spending and 16 percent of all federal spending for 2015. Since the military budget is so massive, it is no wonder that it has drawn a great deal of attention, and consequently a lot of criticism. So what makes the military spending so controversial? What have pundits been saying about it in recent years?

There are various reasons that the United States military budget has been the topic of heated debates. One of those reasons is the sheer magnitude of funds the military receives. As has been mentioned, military expenditures take up over half of the discretionary budget. Yet proponents claim that the amount of money being spent on the military is appropriate; some reason this stance by claiming that the budget needs to be high in order to keep the nation safe and deal with terrorism, war, and threats created by the constant uncertainty in the world. The United States has, however, sought to make some form of cuts to the military budget (minor as they may be), and that has further fueled the debate over whether the budget should be cut back or not. In the piece “The Force” from the New Yorker, author Jill Lepore includes examples of people who presumably support maintaining the level of military spending: “General Peter Pace, of the Marine Corps, insisted that it was inappropriate to look at defense ‘from a dollar-and-cents perspective.’ Better to count risks and threats: Iran, North Korea, and, looking ahead, China.” Lepore also included the following statement from General Richard B. Myers of the Air Force, “‘the world is a more dangerous and uncertain place today than it has been for decades.’”. There are increasing levels of instability in Russia, Ukraine, and Korea, as well as continuing concern about the potential of foreign countries developing nuclear weapons and the risk that those weapons could fall in the wrong hands. In addition, given that many nations across the globe have rather hostile views of the United States, it is understandable that many Americans will feel unsettled and edgy. In fact, there has apparently even been some change of opinion among the U.S. populous regarding military spending. In the article “Americans Divided in Views of U.S. Defense Spending”, Jeffrey M. Jones examines the results of a Gallup poll that was based on telephone interviews conducted from February 7 through 10 in 2013, with a random sample of 1,015 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. The results indicated that thirty-six percent claimed the U.S. spends the right amount on the military and national defense, while 35% believed it spends too much, and 26% said it spends too little. There did not seem to be a clear consensus among those polled. There has been a shift in recent American views between believing the country spends an excessive amount on the military and believing it spends the right amount. The last few years saw a majority of Americans in such polls indicated that too much was being spent on the military, yet this 2013 poll exhibits approximately equal percentages of Americans holding each view. Perhaps the recent developments in places like Korea and in Russia have brought ominous feelings among some U.S. residents. Some question, however, if this worry is irrational and if cuts to the defense budget should really alter people’s views on the military budget.

Opponents of the United States’ military spending derive part of their criticism when looking at the amount of money spent on the military in the United States in comparison to other nations worldwide. In the online piece “U.S. Defense Spending vs. Global Defense Spending”, author Laicie Heeley observes data from the United States 2012 spending. The amount that was approved for the 2013 fiscal year, according to Heeley’s article, was $645.7 billion. She writes that this amount is “…six times more than China, 11 times more than Russia, 27 times more than Iran and 33 times more than Israel.” Consider the nations she includes here – China, Russia, Iran, and Israel. These are considered among the United States’ largest real or potential enemies, and the amounts they spend on military pale in comparison to the United States. The article also offers some interesting information through visuals. A pie chart in the piece reveals that the United States accounted for approximately 40% of global military expenditures as recently as 2012. Furthermore, a diagram shows that in 2012, the United States spent more on their military than the next 15 countries. What does all of this imply? That the United States remains the world’s most dominant military power, and evidently it is not even close. This is one reason why the debate of defense cuts has generated so much heat. On one hand, the current instability in the world may have caused fear and worry to rise among Americans, and so many feel that maintaining the high military budget is not only appropriate, but necessary to keep the nation safe. On the other hand, advocates for cutting the defense budget argue that since the U.S. is so far ahead of every other nation in the strength of their military that cutting a small percentage of military funds would not weaken the U.S. military so severely that the country would be at a major risk. This side of the debate would seem to believe that a recent rise in fear among the American public is unnecessary and even irrational given the nation’s military expenditures in comparison to other nations.

Blog Post 3

The other day, I read an interesting article on http://www.cnn.com titled “’Buy local’ campaigns can actually supercharge sales”, by Julia Lyon. The article appeared in the CNN money section under the subsection small businesses. The piece focuses on a growing trend in the past six, seven years that has seen a growth in the number of small, local businesses.
Betsy Burton is a co-owner of The King’s English Bookshop in Salt Lake City. The article quotes her as saying “‘People thought we were a bunch of whiny little businesses,’” and “‘Now, they see the devastation that’s been wreaked not just by the chains, but by the Internet — which is far more letha.l’” In 2005, Betsy helped found Local First Utah. In 2013, the local business teamed with the American Booksellers Association to conduct economic impact study. The findings showed that 55.3% of revenue from locally-owned businesses goes back to the local economy, whereas for national chains that number is 13.6%. Burton states that the message she wants to send is that “We are the backbone of the community.”
Ranging from Austin, Texas, to Portland, Maine, over 150 businesses groups advocate people in the community to purchase from independent, locally-owned businesses. The article also brings up Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance, who claims that there is a growing belief that the big corporate economy no longer works. “There is this larger, cultural shift … to buy local,” she said.
The movement to buy locally really interests me. It seems like a more sustainable method of production and consumption. Society needs their products, why not get it from your own community? When it comes to food and produce, I would assume that the freshest and least genetically-modified-foods would result from being locally grown and sold. This would give community members healthier food options than big supermarkets offer.
I also imagine that local businesses would aid the economy of the nation as a whole. Rather than attempting to create one big solution, perhaps it is ideal to start from small. Start from the inner workings of the economy. If local small businesses and their communities begin to thrive, I think it may lead to a surge in the overall well-being of the nation.
The article demonstrates that it is during the recession that this movement to buy locally may have been really ignited: “Since Chris Lampen-Crowell joined the West Michigan Local First organization, he saw sales at Gazelle Sports increase an average of 8.3% annually between 2007 and 2012. Though he doesn’t credit Local First solely for the success, he thinks it was a key piece at a time when buying habits were changing.”
Of course, it is not enough to just be a local business; to be successful, the company must prove to have quality products, service, and customer experience in general – otherwise it will not matter if you are local or not. If successful local businesses continue to grow nationwide, I believe they have the potential to improve the economic well-being of the nation by increasing local jobs. They may also improve the well-being of the environment and the people, because local businesses could result in better and healthier products, as well as less environmental damage caused by large factories that big businesses tend to have.

Research Paper 1st Draft

Daniel Kaljaj
English 201
Prof. Papaioannou
March 31 2014
Research Paper 1st Draft
Each year the United States government presents a document of the government’s proposed revenues and expenditures of the financial year – the federal budget. It is also referred to as the Annual Financial Statement of the country. The two key components of the budget are revenues and expenses. When it comes to the government, revenues originate mainly from taxes. Most people know that the taxes they pay go to the government. Have you ever wondered what happens to all that money? Where does it go? Since it is the money of the people, everyone should be aware of what causes the government funds go to. Government expenses consist of paying for current goods and services; government investments (such as infrastructure investment or research costs); transfer payments (such as unemployment or retirement benefits). Furthermore, the government expenditures can be broken down into three groups: mandatory spending, discretionary spending, and interest on debt. A topic of great debate pertaining to the government budget and its expenditures has been spending on the military. What are some of the controversies regarding military spending? Looking at the big picture, why should portions of military funds be redistributed in order to finance other sectors?
President Barack Obama proposed a 2015 federal budget with a total of $648 billion dollars in military spending. $648 billion dollars is a staggering amount however way one puts it. However, before getting into all the military talk, it is essential to have some form of understanding about how the federal budget and its components work, and that will help to really gauge the level of military spending and put it into perspective. Firstly, recall that the federal budget is divided between mandatory spending, discretionary spending, and interest on debt. Sure, those are what the types of spending are called, but now what specific spending consists within each of them? Let us begin with the smallest of the three categories, interest on debt. (Well, according to the website of the National Priorities Project, the federal budget for 2015 is expected to spend $251 billion on interest on debt – so much for being small!) The Federal Budget 101 webpage on the National Priorities Project website states that interest on debt “…is the interest the government pays on its accumulated debt, minus interest income received by the government for assets it owns.” While the 2015 budget calls for $251 billion to be spent on debt, that is only 6.3% of the total spending the U.S. government will do (www.nationalpriorities.org). Therefore, it is imperative to look at the other two categories, which make up a bulk of the government’s spending.
When it comes to mandatory spending it makes up approximately two-thirds of all federal disbursements. It principally consists of earned-benefit or entitlement programs. The biggest mandatory program is Social Security, which encompasses over a third of mandatory spending and about 22 percent of the total federal budget (www.nationalpriorities.org). The spending for those programs is decided through eligibility rules instead of the appropriations process. To grasp how this works, consider this example: “…Congress decides to create a program like the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. It then sets criteria for determining who is eligible to receive benefits from the program. The amount of money spent on SNAP each year is then determined by how many people are eligible and apply for benefits” (www.nationalpriorities.org). Consequently, Congress is not able to decide each year whether or not to increase or decrease the budget for food stamps, however, it can evaluate the rules in order to be eligible and may modify them in order to exclude or include a greater number of people. According to the National Priorities website, the spending of the approximately $2.4 trillion on mandatory programs is divided as follows: social security, unemployment, and labor (51 percent of mandatory spending); Medicare and health (36 percent); transportation (5 percent); veteran’s benefits (3%); and food and agriculture (5 percent)
As for discretionary spending, it constitutes the portion of the budget which does go through the yearly appropriations process. This means that Congress directly establishes the level of spending on programs which are discretionary (in other words, optional; flexible). The government can elect to raise or reduce spending on any of the discretionary programs in a given year. The projected total for discretionary spending in 2015 amounts to about $1.16 trillion. The mandatory spending budget is where the funding for the military is categorized into. Of the $1.16 trillion dollars, military expenditures for 2015 are expected to be $640 billion – over 55 percent of the discretionary budget. Along with military spending, other programs include education, energy and environment, government, transportation, labor, veteran’s benefits, housing and community, science, health, international affairs, and food and agriculture.
In fiscal year 2014, the federal government will spend around $3.8 trillion. This money makes up a significant portion – about 22 percent – of the United States economy, which is measured by Gross Domestic Product (GDP). That means that federal government spending makes up a substantial quantity of all money spent in the United States every year.