money is used to purchase goods and services. While income and wealth are valued in money units, that is their only relationship with money. Income is the annual flow of purchasing power earned by an individual. Wealth is the accumulation of past saving plus any increases or decreases.
The SEC will find itself in court much more often by pursuing cases in this fashion. And, frankly, their record of winning cases that actually go to trial is not very good.
First Lady Michelle Obama has heavily promoted healthier school lunches. This is the first regulation. Many schools (including our local high school) have signed up for this program. The school cafeteria now sells food that many students do not want to eat. Aha! An entrepreneurial opportunity. In this case the entrepreneurs are food trucks. These folks park on the street behind the high school (actually right next to the tennis courts). Students flock to them to pay for food they actually want to eat.
LASD could raise $38.6 million today. That’s a whole lot of opportunity cost. Those who believe in the economic theory of bureaucracy (including me) will despair over what this says about those voting for school board members in the Los Altos School District.
Are you unable to open a checking account? You may thank the government (as well as the media, particularly the New York Times). The two have waged a war against overdraft fees for the last decade. There have been many new regulations and actions designed to increase the cost and reduce the revenue banks receive from overdraft fees. Any economist can tell you that when you put a price ceiling in place, a shortage will develop. In this case, the shortage is expressed as fewer bank accounts being opened, particularly for people likely to re-bounce (a term I just invented).
As far as I can tell, Treasury is engaging in normal portfolio reallocation as the debt nears the limit. They are selling securities held by the government to the public. This changes the composition of the portfolio, but does not change the total. However, it does provide funds for the government to continue operations as those sales of intragovernmental holdings bring cash into the treasury.
It’s always tempting to say, “But this time it’s different. Detroit is not the same as those other places.” In fact, nearly every time it’s the same. Economists have looked at this over and over. In virtually every case we have found that using public funds to help finance a private venue is a bad deal for the taxpayers.
Remember, these employees are not covered by a retirement plan. They are mainly low-income. The reason they are not saving for retirement is that they are poor. Many are young. Many will see their incomes increase as they get older — and a few will become very wealthy. Do these folks really need to lose three percent of their pay?
My guess is that these students have entered the informal sector (formerly known as the underground economy). They get paid in cash (actual currency), do not file income taxes and (important) remain invisible to Obamacare. Since many of the Obamacare taxes and restrictions will be implemented by the Internal Revenue Service, not filing a tax return is an excellent way to avoid the whole train wreck.
The idea here is that Mitt Romney said he would have let GM and Chrysler go bankrupt during the presidential campaign. The Obama campaign promptly took credit for not letting “Detroit go bankrupt.” On the internet stuff lasts forever.