Current Account Deficit Essays - National Accounts,

Current Account Deficit In 1994 the UK had a Balance of Payments current account deficit. Explain the possible effects that this deficit might have upon the economy Discuss what, if anything the UK Government could have done to reduce or eliminate this current account deficit. The balance of payments is a record of one country's trade dealings with the rest of the world. Any transaction involving UK and foreign citizens is calculated in sterling (UK pounds). Dealings, which result in money entering the country, are credit (plus) items while transactions, which lead to money leaving the country, are debit (minus) items. The balance of payments can be split up into two sections: 1. the current account which deal with international trade in goods and services; 2. transactions in assets and liabilities which deals with overseas flows of money from international investments and loans; The current account consists of international dealings in goods (visible trade) and services (invisible trade). Invisible trade includes payments for overseas embassies and military bases: interest, profit and dividends from overseas investment; earnings from tourism and transportation. The cause of a deficit was that the UK imported more visible goods than it exported and there was a net deficit on transfers, our service earnings plus overseas incomes did not exceed our service payments plus investment income paid abroad sufficiently to prevent the balance on current account being well in deficit. The state of the trade balance is extremely important since changes in imports and exports have a important bearing on the real economy and in particular on output and employment. In the longer run, a persistent deficit, if it cannot be offset by a surplus on invisibles, will have serious implications. It will handicap the conduct of the macroeconomic policy. Its effect will be to increase instability of exchange rates and/or interest rates as the UK becomes dependent on inflows of hot money to finance the deficit. Higher interest rates are also likely to cause a reduction in real investment and therefore in economic growth. The current account deficit might also be financed by increased sales of assets to overseas firms and residents, which in the long run, will lead to an increased outflow of interest, profits and dividends. The balance of payments always balances because of official financing. However, a balance of payments deficit means a persistent and large negative balance for official financing. This can be the result of excessive purchases of foreign goods and services or excessive UK investment overseas. In the short term, a balance of payments deficit can be corrected by: continued borrowing of foreign currency; increasing interest rates to attract overseas investors; imposing exchange controls; Imposing tariffs and import quotas. In the long run, the government can correct a balance of payments deficit by reducing demand in the economy for all goods including imports. Reducing UK inflation rates or encouraging a sterling depreciation will also help. The correct measures to remedy a deficit will depend upon its cause and also upon the exchange rate regime. A short-term deficit might be dealt with by running down reserves or by borrowing. Another short-term measure might be to raise interest rates to encourage the inflow money. When there is a more fundamental payments deficit, other methods will have to be taken. The following show ways in which the government can tackle the problem of a deficit in the Current Accounts. Deflation is where the demand for imports are restrained by restricting the total level of demand in the country through fiscal and monetary polices Protection is where the country cuts all trade with the outside world by cutting off all imports and therefore protecting the home market from foreign competition Devaluation is where a fixed exchange rate drops the external price of its currency, as the UK did in 1967 when the rate changed from ?1=$2.80 to ?1=?2.40, this is referred to as a devaluation which means exports will now appear cheaper to foreigners while imports will seem more expensive to domestic customers.

The Life and Health Insurance Provided by Social Security Essay Example

The Life and Health Insurance Provided by Social Security Essay Example The Life and Health Insurance Provided by Social Security Paper The Life and Health Insurance Provided by Social Security Paper I am focusing on the topic of Life and Health Insurance Provided by Social Security. Social Security benefits provides income continuation in the event of death, disability, or retirement. It also provides medical expense benefits for disabled or retired persons and specified dependents. According to the Social Security Bulletin, in 1994, 42 million people receiving benefits were receiving some type of cash benefit under Social Security. Around 71 percent of the people receiving benefits were retired or dependents of retirees, about 12 percent were disabled workers or dependents, and 17 percent were survivors of former workers. In this paper I will talk about the definition of social security, coverage requirements, eligibility for Benefits and some of the basic Types of Benefits. There are many different governmental programs designed to provide security for individuals and families. Both public assistance and social insurance programs are organized and undertaken by the government and have the broad social purpose of reducing want destitution. Social insurance is different from public assistance. Social insurance is an insurance program that is compulsory for nearly all Americans, eligibility criteria and benefits are specified by law, and financing is wholly or partially covered by the employer. Unlike public assistance, which is like welfare, employers and employees pay into the social insurance system to earn their rights to benefits. Some examples of social insurance programs include Social Security, which is workers’ compensation, and unemployment compensation. Public assistance which is welfare benefits are financed from federal and state funds that come from general revenues and are not based on any contributions that have been made by the recipients or on their behalf. Some examples of public assistance programs are like Aid to Families with Dependent Children and Medicaid, both of them pay benefits based on need. While public assistance programs have a role in providing economic security, they are not insurance programs since the insurance principles of measuring the risk of the insured or spreading the cost of losses among those exposed do not apply. While it is appropriate and necessary to include possible social insurance benefits in individual financial planning in the event of economic loss due to premature death, disability, or retirement. It is not appropriate to include public assistance, one of the purposes of financial planning is to avoid the need for public assistance. When people talk about Social Security, they are referring to a program created in 1935. This program had the appreviations of OAL standing for â€Å"Old-Aged Insurance. † As more time passed, benefits were added and the program was referred to as â€Å"Old-Aged and Survivors’ Insurance† or OASI. It was OASDI when disability benefits were added. And when it was the OASDHI, it was because it was the addition of hospital and medical benefits. It is now referred as the â€Å"Social Security† in its publications. (Social Security Handbook) Social Security cover many different types of people like employees in private industry, most self-employed persons, and members of the armed forces. Social Security taxes must be paid on their wages because coverage is compulsory for well over 90 percent of all workers in the United States. There are some exceptions, for example, railroad workers, who are covered by the Railroad Retirement Act, and federal government employees who were covered by other programs. Before 1984, state and local government’s bodies could elect not to cover certain employees not to cover certain employees under Social Security. This option is no longer allowed according to Pritchett, Schmit, Doerpinghaus, and Athearn, there are only some exceptions. Municipal government that were elected before 1984 due have the right to voluntarily join the Social Security Program. Ministers are covered automatically also. Members of religious groups whose beliefs prohibit acceptance of benefits are exempt. In order to be eligible to receive benefits, you must have insured status. With this status you may be fully insured, currently insured, or disabled insured, depending upon your work history. Most types of Social Security benefits are payable if you are fully insured. If you do not have enough work experience to be fully insured, you may be currently insured, and you would be eligible for some survivor benefits. The amount of work required to become insured is measured in quarters of coverage. According to Pritchett, Schmit, Doerpinghaus, and Athearn, in 1995, an employee earned one quarter of credit for each $630 of earnings, up to a maximum of four quarters each year. You get four quarters of coverage for $2520 , even if you earned this much in only one day. The quarterly measure of earnings is adjusted every year to account for raises in average wages. If you have forty quarters of coverage, or have a minimum of six quarters of coverage, or if greater, at least as many quarters of coverage as there are years elapsing after 1950 or after you reach the age of 21. For example, A person at age 25 who has six quarters of coverage is fully insured, as when a person who is 40, he needs 19 quarters of coverage to be fully insured. You are currently insuredif you have at least six quarters of coveragein the thirteen- quarter period ending with the quarter of death. Disability insured status is gained by having twenty quarters of coverage in the forty quarters ending when disability begins. If you are under the age of 31 and your blind, less rigorous disability requirements apply. There are many types of benefits available from Social Security with are abbreviated by OASDHI. First there is old age or retirement. Then there is survivors’. Also there is disability and health or Medicare benefits. The insured status of a worker decides if the himself or who in his family is entitled to collect from these benefits. For retirement income benefits, you have to be a fully insured worker. You are more than eligible to receive most of these benefits. A spouse or a divorced spouse has the right to receive these benefits if is atleast 62 years of age, caring for a at least one child of the retired worker, or a dependent child, grandchild or great-grandchild of the retired worker who is under 18 , a full time students when he is 18 or 19, and disabled which began before he was 22, he is entitled to benefits. Normal retirement age has been 65. A fully insured worker can receive full retirement benefits at 65 reduced benefits at 62. Due to financial pressures according to Pritchet, Schmit, Doerpinghaus, and Athearn, the Social Security system Amendments of 1983 redefined the age of full benefits eligibility. It will be in a later age by the year 2022 to be able to get Social Security benefits. Survivors’ benefits protect the surviving dependents of a fully or currently insured deceased worker. A surviving spouse if has a child under the age of 16 can receive monthly benefits to take care of the child. Also the child is disabled under the age of 18, or a full time student attending elementary school he is eligible. Also if the surviving spouse is entitled to monthly income payments if was dependent on the deceased worker and is not married. In addition to these monthly benefits, a small amount of a death payment of $255 is made upon the death of a worker who is fully or currently insured. It is paid to the spouse living with the worker at the time of death, or a spouse that is entitled otherwise, or children entitled. If there is no children or a spouse, the death benefit is not paid. It is the only benefit that has not raised since the Social Security legislation was passed in 1935 (Pritchett, Schmit, Doerpinghaus, and Athearn. ) A fully insured worker who has a mental condition that prevents any substantial gainful work which is earning $500 or more per month are considered substantial is entitled to disability benefits after a waiting period of five months. This occurs if he or she has been disabled for 12 months and under 65, or has a disability to result in death. Disability benefits may be stopped if the disabled worker refuses to participate in rehabilitation. They may be reduced if disability benefits are received from workers’ compensation or under federal, state, or local law. ( Pritchett, Schmit, Doerpinghaus, and Athearn) There are many more types of benefits that are still at hand like health or other type of Medicare benefits. There are so many requirements each person has to full fill in order to get some type of Social Security Benefit. These are great benefits that provide income in the event of death, disability, or retirement. This helps a person be dependent the case of an emergency when one is no longer to work anymore and can’t have any other form of cash giving. Whether the objective for Social Security is to provide a protection for some people, reform, however, â€Å"will require agreement by politicians and public on the benefits people are entitled to but what benefits taxpayers are willing to fund. †( Pritchett, Schmit, Doerpinghaus, and Athearn)

Ancient Greece Essay Example | Topics and Well Written Essays - 500 words

Ancient Greece - Essay Example Some of the most significant Cultural Accomplishments during the Ancient Greek Civilization were as follows; one of the most noticeable accomplishments was in the field of Philosophy, many philosophers exhibited their talent in the field of Philosophy and gave rise to creativity by their influential philosophies. There were many temples built during this time but the most important of them all being the Parthenon "The classic Greek temple built on the Acropolis in Athens to honor the goddess Athena" (Ancient Civilization, 29 September 2008). These are just handful accomplishments which took place during the Ancient Greek civilization in the field of culture. During this time, Ancient Greek Economy was regarded as one of the best compared to the other Economies which prevailed at that time. In the section of religion, the Greek mythology is regarded as one of the best in the world; it provides rich history about the Gods and heroes which existed at that time. With regard to the Politi cal Accomplishments, the most significant of them all was Democracy which is followed by so many countries these days. People were free to vote and choose their representatives. When we look at the cultur