What are some continuing

uncertainties for the us economy?

Content

1. Immigration problems

2. Stock market bubble

3. Obama Care

4. Income and wealth distribution

Immigration problems

The U.S. Department of Homeland Security (DHS) estimates that there were 11.5 million undocumented, or unlawful, foreign-born persons in the U.S. in January 2011.

These estimates are based on the fact that the number of foreign-born persons appearing in U.S. Census surveys is considerably greater than the actual number of foreign-born persons who are permitted to reside lawfully in the U.S. according to immigration records

Lost jobs, depreciated wages, stolen taxpayer resources, and increased numbers of crimes and domestic terrorism.

Illegal immigrants are stealing over 125 Billion dollars worth of American taxpayer resources each year.

They are breaking our laws and yet as taxpayers we are forced to pay for their education, their healthcare needs, increased infrastructure to handle their presence in our land, and increased costs in our courts and prisons

Immigration problems

Immigration problems

Illegal immigration costs U.S. taxpayers about $113 billion a year at the federal, state and local level. The bulk of the costs — some $84 billion — are absorbed by state and local governments.

Stock markets bubble

Stocks are getting to their maximum record (JP Morgan, Citi group, etc)

economy has been growing frustratingly slowly for almost five years, stocks have been rising 

e.g.: nvestment in the Standard & Poor 500-stock index would have doubled from early 2009 through early 2013 and then gained an additional 18 percent over the last year.

stocks have been more expensive only three times over the past century than they are today (1920, 1990 and 2007)

Stocks seem more appealing than safe, low-return investments. 

“There is no way to predict the future”, but the fact is stock prices are historically high

Advise: be conservative investi in a diversified index funds.

Income inequality and wealth distribution

Income inequality in OECD countries is at its highest level for the past half century. The average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25 years ago. Only in Turkey, Chile, and Mexico has inequality fallen, but in the latter two countries the incomes of the richest are still more than 25 times those of the poorest.

The economic crisis has added urgency to the need to address inequality. Uncertainty and fears of social decline and exclusion have reached the middle classes in many societies. Arresting the trend of rising inequality has become a priority for policy makers in many countries.

Income and Wealth Distributions The U.S. poverty rate in 2011 was higher compared to all other

OECD countries other than Israel, Mexico and Turkey.

Gini coefficient: measures income inequality, 1 means 1 person possess al income and 0 that income is equally distributed among all individuals

Obama care

Background information

Prior to the passage of Obamacare, many people felt that the US health care system was too expensive giventhe slightly higher quality of care providedin the US compared with other countries. They asserted that something like 40 million people in the US did not have healthinsurance

What?

New health care reform law in America

Goals of obamacare: Goals:(1) to extend insurance to a much larger group of peoplethan what existed before, (2) to make insurance more affordable and bend the cost curve, (3) to improve the qualityof health care in the US and make it more readily accessible.

E.g. of measures: expand coverage (ends Pre-Existing Condition Exclusions for Children, ends Arbitrary Withdrawals of Insurance Coverage, Guarantees Right to Appea, Covers Preventive Care, increase choice of doctor)

Obama care

Cons of Obama care:

Threatened the flexibility and freedom of choice for millions of healthcare consumers and providers by interposing the federal government between many people in the private health care market.

Placed severe burden on older Americans to fund extended benefits to younger low income Americans.

Forced healthy Americans to subsidize the costs of taking care of still other people who have pre-existing medical conditions.

Obama care

Approval rate:

Obama care

Economic problems

Business which employs 50 or more full time workers will be required to buy federally qualified health insurance plans for them or suffer a penalty

 

There will be greater taxes: 20 new or higher taxe, e.g. taxes paid on high level expensive health insurance premiums paid by the rich, new wealth gains tax, payroll tax for Medicare to rise, taxes on medical devices and expensive pharmaceuticals.

Conclusion

Immigration, income and wealth distribution, health care and stock markets are long term structural problems for USA economy

Problems cannot be solved in short term but need be addressed with a holistic view where all socio-economic actors are involved