ray

One of my projects for this quarter is a paper on any Macroeconomic issue. Our professor has given us a list of sample issues we could draw from, but quite frankly I'm tired of the ones listed. The only one I am considering from the provided list is #2.

So, I decided to post on here to see if anybody had something a little more interesting. The issue can be US-related or international, or some interaction of both.

Here are the ones that our professor gave us:

1) Supply side economics - ie: Do tax cuts result in increased revenue to the government.

2) Immigration reform - what is the effect on immigrants on the economy.

3) Weakening US Dollar - why and will it rebound soon

4) Subprime problem - what is it, why did it happen.

5) Subprime problem 2 - who is responsible.

6) Recession - is a recession on the way for the US economy.

ShawnLee

Just thinking, wouldn't 4 answer 5?

I wish I could come up with one, but the only thing I can think of is a variant of problem 3.

Is the weakening of the US dollar an appropriate revaluation of the currency against foreign currencies, especially considering the long period of non-sustainable growth after the dot-coms, dot-bombs, and real-estate bubble?
Or perhaps restated - could you consider the weakened US dollar a reaction to an over-inflated US economy?

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VTGreg

How about taxes? Would a national sales tax (you use the Fairtax as a model) work if it replaced the current payroll taxes?

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zippyjuan

If you take an issue like immigration, you will of course need to condsider both the positive and negative impacts. I assume you are talking about illegal immigrants?
Figures may be hard to find. One factor is the impact on labor costs. In agriculture, cheap labor for planting and harvesting crops helps keep the prices for our food lower than they would be if the industry had to try to pay competitive wages to do work that most current residents would be unwilling to do at any price. Some states like Colorado considered using prisoners to help with harvests due to immigrant worker shortages.

Construction work is another field imigrants tend to go into- it is a fairly unionized industry demanding higher wages and the use of illegal workers tends to try to drive down the wages for current citizens or even completely replace them. Is this good? That means that the residents have less money to spend on other things in the economy and in turn support other jobs.

What are the costs of illegal imigration? Do they collect on social services and fill up the prisons as some claim? Are they scared to use such services because they fear being discovered to be here illegally and then deported? Do they offer benefits- I mentioned a few on lower wages for others but cheaper food. Immigrants can have fake social security numbers to allow them to take jobs. If they are not being paid in cash. their paychecks are having money deducted for taxes and social security collected but they will not collect on things like social security so that helps our budget. Even if they are paid in cash, they are still purchasing things in our economy and helping contribute to other jobs.

What about money they send home? Some work here to help support families at home. Is this money leaving here good or bad? Sending money home can mean that fewer need to leave and come here to try to seek their own jobs. It can help to improve their economy at home leading to more stability there and increase job opportunities there thus decreasing the need for more to leave.

Some of these effects will be small, others will be larger. Decide which will be the most important.

How about the impact of China on the US economy? They are providing us with cheap goods and buying our bonds to suppport our borrowing. Their demand for inputs like cement, steel, oil, gas, and coal are driving up the prices on them meaning our costs of producing goods is going up and we need to buy even more from them. What impact does that have on jobs here? Prices are rising in China too- their price advantage will shrink over time.

What about biofuels? Is a greener economy a good thing? Will it cost money (yes) but will it create new jobs and thus benefit the economy? What is the impact of ethanol (driving up the costs of food items without decreasing our need for fossil fuels since it does not have much net gain of energy- requiring about as much energy to produce as it yields)?

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mcs328

Flat tax? Pay Day Loans Cap? Dollar Coins replacing Dollar Bills?

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Maarchk

Does a country need to have a constantly growing GDP to avoid recession? People always talk about how the economy didn't grow fast so we are screwed. But if the # of people in the country doesn't change, can't we be happy with where we are at? Maybe thats more philosophical than economical.

If the US economy goes into recession or depression, what will happen to the world, i.e. trading partners and then partners or those partners.

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