The interest rates rise, pressures begin to operate



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The Forever Changing EconomyHow easy is it for smaller business men to achieve the Aamerican dream.How to stop corporate domination. The question I pose to you is ” Is theAmerican Dream still achievable?” The opportunity is there but for what selectfew is the opportunity available to.

If the resources are out there but I can’ttap into the resources they rae of no use to me. (Make note of the fact that welive in a market economy.Just about every definition of the “market” in the dictionary connotesan oppurtunity as a place where goods are bought and sold.

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(cite dict.) As anabstraction, a market is the possibility of sale. Goods “find a market”, and wesay there is is a market for a service or commodity when there is a demand forit, which means it can and will be sold. Markets are opened to those who wantto sell and a convenience for those looking to purchase.(cite 2) The marketrepresents “conditions as regards, opportunity for, buying and selling”.(cite 2)The market implies offering and choice.

The way a market economy works is thatthere are market pressures that develop for different commodities. Thepressures work in one direction for a while, but at the same time pressures arebudding that work in the opposite direction. As people look forward and seethere’s going to be some profit made from their production, they’ll makedecisions to increase volume, usually hiring more people, buying more materials,often bidding up their prices. When people are competing in the same market,that tends to generate more and more pressure in the direction of expansion.

But at the same time, as costs and possibly interest rates rise, pressures beginto operate in the other direction, against profits.(cite 1) The public as awhole must get their fair share of the benefits. Macroeconomic reforms shouldtranslate into a more efficient delivery of public services, equity, socialwelfare and social security.

(cite 3)The Economic Policy Institute (EPI) has released its findings onAmerican living standards. The report, issued every other year on a declinethat begsn in the late-1970’s. The EPI’s report also contends that theAmericans are working more for less money because of slow growth in wages since1989. According to the report, wages in the bottom 80% of men have declinedsince 1989. The report also contends that 20% of women have experienced adecline in trsl esgrd dincr the 1980’s, a period in which wages fell but familyincome increased because of longer hours at work and increased participation ofwomen in the workforce. Critics assert that the report wrongly focuses ondeclining wages as a gauge to the income of the American family.

Such criticsfind spending a more appropriate means by which to measure income.(cite 4) Oneproposal would birng back the 10% income deduction for second earners that waseliminated in the Tax Reform Act of 1986.(cite 5) Under that rule, a couplewith two earners can deduct from taxable income 10 percent of the earnings ofthe spouse with the lower earnings(generally, the wife) up to 30,000 ofearnings.(cite 5) Since almost all married working women earn less than 30,000,this is equivalent to a 10 percent reduction in the wife’s marginal taxrate.(cite 5) To get a sense of how substansial this offset would be, considera typical middle-class two earner couple. The husband earns 45,000 per year,and the wife earns $15,000 per year by working 1,000 hours at $15 per hour.

They pay tax at a marginal income tax rate of 28 percent plus a payroll tax of7.65 percent.(cite 5) They also pay at a typical state income tax rate of 5percent.

(cite 5) As a result, the wife’s $15 per hour wage produces only a netof $8.90 per hour.(cite 5) If she didn’t change her work, the deduction wouldreduce her taxable earnings from $15,000 to $13,500.(cite 5) With a marginalincome tac rate of 28 percent, that would cut her tax payments by 420 peryear.(cite 5) That’s how the current method of revenue estimation wouldevaluate the revenue effect of the deduction, a $420 revenue loss. But the 10percent cut in her effective marginal income tax rate (which would result fromdeducting 10 percent of her earnings from taxable income) would raise her nethourly take-home by a little less than 5 percent, from $8.90 per hour to $9.32per hour.(cite 5) Statistical studies of the

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