The cost of weapons

US decreasing spending on new weapons, cutting military costs including personnel cuts, internal cost-cutting redirect money to the war in Afghanistan. After a decade of ever-rising defence spending, “the gusher has been turned off”; now his greatest fear is that defence spending will be cut to curb the budget deficit. Europe cutting defence spending too and China rising in economic strength: concern for west?The beginnings of a sound policy today, he argues, might be for America to withdraw from a costly war in Afghanistan and pull forces out of Europe. But what about those who look to US for military aid? Military as a part of spreading American influence has led us to an influx of commitments. Military goals now are to become better at fighting insurgencies; to preserve enough might to protect allies from, say, North Korean aggression or Chinese hegemony; and also to maintain “all options” for dealing with Iran’s nuclear programme. That means finding new money within constrained budgets. Costs for increacing weapons, military innovations, and training and highering personnel are too high to build up military.

Should US government debt be rated junk?

This article makes the argument that US backed debt is not as strong and reliable as it once was. The author even goes as far as to compare US and Greek debt and deficit structures. Is this really a fair comparison? Was or is the U.S. economy likely to default on any debt they have ever issued? I agree that the deficit the U.S. government is running is excessive. I also believe that the U.S. should borrow the EU's ideas for reform and cut public spending and raise the age people start to receive social security. I do not believe the US debt is ever in any risk of be defaulted on.

Behind Stimulus Argument, Debate on Causes of Joblessness Grows

This article provides two arguements for the continued high rate of unemployment. One of the arguements goes along with the standard reasoning behind unemployment. Demand is down, people are not spending money, businesses are not growing and investing. The other arguement is a little more interesting. Unemployment can be curved if people could figure out a way to sell their house and move to where to work is. If this is the case, is there anything the government can do to fix this disparity or will the job market just have to take care of itself?

Brazil's Bolsa Família & its Limitations

In its effort to reduce poverty and child labor, Brazil created a welfare program in 2003 called Bolsa Família (family grant). Participating households get a monthly stipend of about 22 reais ($12) as long as their children stay in school and get regular medical check-ups. This program has been acclaimed for being responsible for 1/6 of Brazil’s poverty reduction and for reducing Brazil’s Gini index from 0.58 to 0.54. The article I have linked deals with the limitations of this program, most notably about its ineffectiveness in cities versus its significant impact in rural areas. Out of all the possible causes explained in the article, I think the most notable reason why the program might work less in cities is because the costs outweigh the benefits. The jobs kids hold in cities pay a lot more than rural jobs like farming, which most children do essentially for free. The monthly stipend given through Bolsa Família may often be less than a city worker’s wage. If Brazil is really looking to further increase the number of participating families, a program needs to be designed uniquely for city living conditions. Even so, the article also makes a good point that Bolsa Família has done an outstanding job at helping reduce rural poverty, malnutrition, and the absence of clean water in Brazil.

Growth in Jobs, Beats Concerns

In this article it is said that our economy has possibly avoided a double dip recession and the private sector has added 67,000 jobs in August, with some of the strongest in health care, food service, and temporary help. On the other hand there was an overall loss of 54,000 jobs. With indicators showing a gradual increase in consumer confidence and a growth of employment in manufacturing could be signs of the economy moving out of the recession. The Federal Reserve is said to continue providing help if the economy is still showing a stagnant recovery. Overall I think the economy will not have a double dip recession, however it will take time to recover. As mentioned in the article it took awhile to create the problems which caused the current recession and experts fear it will take a while to repair the damage. Do you agree with the prediction that we will not have a double dip recession? why or why not?

Trade Gap in U.S. Probably Narrowed on Falling Imports as Economy Slowed

In July, the U.S. trade deficit narrowed as a result of Americans buying less goods - and many of these goods are imported from abroad. Many economists would say the economy is steadily recovering, but consumers and businesses in the United States spent less in the month of July compared to other months. This trend is expected to continue into the coming months.

The United States plays a huge role in the recovery of global economies. Being the number one consumer in the world, the U.S. needs to increase consumption to alleviate economies around the globe. Many foreign businesses rely heavily on U.S. consumption to maintain a successful business. It appears the U.S. needs to finish what it started - the global recession.

India's disappointing government: Much less than promised

This article is related to my previous post about the potential of India becoming a global power in the future. Yet this article showed us that Indian government is not doing such a good job as it's supposed to which largely hinder the country's growth. Other than output had grown by 8.8% in the second quarter compared with the same quarter last year and a strong growth of 12.4% in job-creating manufacturing, almost everywhere else the results are disappointing.

Food Prices Hit Ramadan

In the close of the month of Ramadan, the holy month for Muslims around the world, observed through fasting from dawn till dusk, food prices have risen exceptionally. It is relatively common for food prices to inflate at this time of the year as Muslims tend to gather more often for large family meals. However, the exception this year is that due to a shortage of meat, the cost of meat products such as beef and mutton have gone up almost a third. Meat prices have soared throughout the Middle East causing alarm for people throughout the region. Essentially, this article illustrates a very simple demand and supply problem where high demand and a shortage of resources has caused a tremendous price increase.

The reason why I chose this article was to illustrate that even though one can easily assume that the demand for food would mostly decrease in a month where fasting is observed for almost twelve hours (in some cases more), it is the opposite. Furthermore, in a region where the poverty and unemployment rate is pretty high, this is a very alarming situation.

Why Coffee Is Getting More Expensive.

This is simple economics. Supply decreases, demand increases and you experience a price increase. Columbia is such a huge supplier of the worlds coffee that a couple slow grow seasons can seriously effect the market. It can be interesting to see a market price shift due to increment weather.

Where the jobs are now, and where they'll be next

This article deals with the unemployment rate and jobs. It described that though the unemployment rate rose, there was a rise in private sector employment over the year. The article also mentioned that the unemployment rate will most likely continue to rise before it ever gets better. After reading the article where do you think the jobs will be after the unemployment turnaround and recession? How far out do you feel we are from a turnaround and full recovery?

Obama Backing research Tax credits

In this article Obama is set to outline a 100 Billion dollar proposal for research and development tax credits. This is going to be a first of many steps to "jump start" the economy. Obama also wants to extend credit options to businesses from 14% to 17%.

"That's where U.S. competitiveness lies in high-technology industries," Laura Tyson, a member of Obama's Economic Recovery Advisory Board"

Now im all for research and development and continuing to develop better products and helping businesses. But what would you do to so call "jump start" the economy? Do we need more tax breaks? With unemployment so high there needs to be something done about our unemployment rate.

Chinese billionaire on success, equality

This is a video interview between CNN correspondent Fareed Zakaria and Zhang Xin, a Chinese real-estate investor worth around$2 billion. Zhang Xin talks about the discontent that the Chinese people feel and express through social media networks such as Twitter. Even though GDP may be high, the people are feeling social discontent. She also discusses the state-run government operations in relation to her field of business and the effects of planned versus market economies. "We have no strategy.", she says of future business plans. The government sets a strategy and the market follows. "As imperfect as the market economy is, we still do not have a better system."
In response to relations with the US she says,"American glory is fading a bit." The job opportunities are better in China for graduates than in the US.
In China, women are experiencing higher levels of equality. She mentions the higher number of women CEO's than in other countries.

Great Recession was emotional ‘roller coaster’

I found this article to be very interesting from an economic standpoint. The effect of such high employment has forced millions to take drastic measures to find new jobs, some even switching job fields or relocating across the country. From an economic standpoint, it will be interesting to see how certain fields demand grows while other decline and the effects of such movement.

CEOs lay off thousands, rake in millions

This article talks about the massive payouts that CEO's are receiving when they leave a company. The companies that were laying off the most workers in the recent years were giving there CEO's the biggest packages. Where as they should of kept some of the employees on board and just gave smaller packages. This article says that the top 50 companies gave out an average of $12 million to there CEO's. I just can't believe how selfish people are and how some companies don't manage there money better. That money could have given many people jobs that are now currently out of work and collecting money from the government. In the past CEO's would receive k prices. stock options which would not be that risky for the corporation. This also gave incentives to drive up the companies stocThe total number is estimated to be $598 million awarded in compensation to the top 50 CEO's. For how bad huge corporations have been performing in the "Great Recession," they are handing out a lot of money to there top employees.

Cash-strapped schools turn to volunteers to fill budget gaps

After having listened to EconTalk with Paul Romer, I found this article to be very interesting. Paul Romer said our nation's growth comes primarily from our educational institutions. This article explores problems in our educational systems, which may or may not have future impacts on our nations growth if they are not solved.

Can Chinese media rule the airwaves?

The government-owned Chinese media is expanding rapidly to include more non-government run TV stations, radio stations, and newspapers. One station, Blue Ocean Network, is a Chinese network aimed at international audiences. "At the very beginning, we realized that is probably our lifeline -- to be totally independent and non-government funded," Justin Ku, co-founder of BON TV said.
Does this change bring up the larger issue of how China is percieved by foreigners? Li Cheng, the director of the National Committee on U.S.-China relations at the Brookings institution stated that the Chinese government believed that their international image was becoming a problem. Of 28 polled nations, only countries within the Middle East polled to view China positively.
"They believe part of this misunderstanding is the lack of knowledge of China, and the Chinese," Li said.
"And they also believe as China's economic power continues to grow, it should also have cultural and political influence as well. That is the mindset."

China and India: Contest of the century

I found this very interesting article. It's exciting to see which of these two Asian giants, new rising powers will prevail in the end and possibly over take the United States. China has already officially become the world’s second-biggest economy, overtaking Japan just a couple of weeks ago.

The Layoff Kings: The 25 Companies Responsible for 700,000 Lost Jobs.

Unemployment is a major topic for today's economist and this article should help spark some conversations. Millions of jobs were lost with current recession. Although some company's were coming close to the end of thier lifetime anyways the recession definantly helped speed up the process. It does not make economic sense for a store like Circuit City, #4 in cuts, to remain in business with Walmart and Best Buy being able to offer lower prices. However it does make sense, when a increased number of unemployed workers, who are now saving their money, slow sales for consumer products and the materials used to make those products . Ultimately the effects are felt in the companies that turn commodities into a finished product, and companies like Alcoa (#14), DuPont (#16), and Dow Chemical (##15) had real problems. This article helps put a number to some of the companies we have heard having huge layoffs.

Departing White House Economists Wants More Stimulus

Departing White House economist Christina Romer wants the government to increase stimulus spending and decrease taxes in order to lower the unemployment rate and improve the U.S. economy. The consequence of increasing spending while lowering taxes would be an increase in the deficit, which could destabilize the economy in the future. According to the article, there is a debate going on in the White House over whether to increase stimulus spending or to focus on decreasing the deficit. Politically, many Americans don't like the idea of more stimulus spending, especially because the original stimulus was not large enough to have a sustained positive impact on jobs recovery. Obama's point that the stimulus saved many more jobs that could have been lost without it may be true, but the Republicans are taking advantage of the fact that most Americans are preoccupied with the current high unemployment rate and not concerned about the hypothetical alternative that the unemployment rate would have been higher without the stimulus.

Why some rich-world economies are stronger than others?

This is a very interesting article that features some theories on why some developed economies are doing much better than others in this slow economic recovery.

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AMERICA is used to making the economic weather. It has the world’s largest economy, its most influential central bank and it issues the main global reserve currency. In recent months, however, some rich-world economies (notably Germany’s) have basked in the sunshine even as the clouds gathered over America.

On August 27th America’s second-quarter GDP growth was revised down to an annualised 1.6%. That looked moribund compared with the 9% rate confirmed in Germany a few days earlier. America’s jobless rate was 9.5% in July (figures for August were released on September 3rd, after The Economist went to press). But in Germany the unemployment rate is lower even than before the downturn. Other rich countries, including Britain and Australia, have enjoyed sprightlier recent GDP growth and lower unemployment than America.

This unusual divergence within the rich world has fostered many competing theories to explain it, including differences in fiscal policies, exchange rates and debt levels. Most of these do not quite fit the facts. On one account Germany and, to a lesser extent, Britain have been rewarded for taking a firm grip on their public finances. In this view, the promise to tackle budget deficits has had a liberating effect on private spending by reducing uncertainty. In America, by contrast, anxiety about public debt is making businesses and consumers tighten their purse strings.

The theory is a little too neat. Although credible plans to curb deficits are helpful to medium-term growth, they are unlikely to explain sudden spurts. Britain’s budget plans were announced towards the end of the quarter, on June 22nd. Germany’s were set out two weeks earlier. They could scarcely explain why GDP growth was strong. Indeed for most of the second quarter, fiscal uncertainty hung over both countries: in Britain because of a close election, in Germany because of commitments to help Greece and other countries. And the immediate impact of austerity is to dampen growth: witness the slump in Greece.

Perhaps the explanation is found in currency movements. One effect of the euro-area crisis was to push the euro down against the dollar in the early months of this year—helping German firms but harming American exporters. Much of Germany’s second-quarter GDP growth came from trade, even as a wider trade gap sapped America’s economy. A weak pound could also explain Britain’s renewed economic strength, much as a surge in the yen has increased worries about Japan. On August 30th Japan’s central bank said it would offer banks ¥10 trillion ($118 billion) of six-month secured loans at its benchmark interest rate of 0.1%, on top of the ¥20 trillion of three-month loans it had already pledged. It hopes that this flood of money will push down borrowing costs, cap the yen’s rise and help exporters.

The currency theory also has holes in it. The yen’s surge is too recent to explain why Japan’s GDP barely rose in the second quarter. Net trade added almost nothing to Britain’s GDP growth in the last quarter. Indeed America’s export growth has been much stronger (a sudden surge in imports was behind the second-quarter trade gap). And demand for the sort of exports Germany has done well with, mostly luxury cars and specialist capital goods, tends to be insensitive to shifts in the exchange rate.

Britain is an awkward challenger to another theory: that a debt hangover is holding back consumers in countries that had housing booms. Consumer spending in Britain (and in America) rose at about the same rate as in thriftier Germany during the second quarter.

Britain stands out in another respect, too: its unemployment rate has risen by far less than in other places that had also racked up big mortgage debts. Divergent trends in unemployment may be better explained by the sort of recession each country had than by variations in jobs-market flexibility, says Kevin Daly at Goldman Sachs. In America, Ireland and Spain, the collapse of labour-intensive construction swelled the dole queues. Britain also had a housing boom but its tight planning laws kept its construction industry small, so fewer jobs were lost when the bust came. The downturns in Japan and Germany, deeper than America’s (see chart), were mainly caused by the collapse in world trade. That hurt capital-intensive export industries—which were also more likely to rebound quickly—so fewer jobs disappeared.

Some think America’s slowness to create new jobs is leading to undue pessimism about the rest of the world’s prospects. “If US growth is not enough to give us a big payrolls figure, it’s deemed a disaster,” says Marco Annunziata at UniCredit. But fast-growing emerging markets, such as China, have kept the world economy ticking over. Germany has done well because its exporters have made headway there. China’s vibrancy also explains why Australia’s GDP rose at its fastest rate for three years in the second quarter.

The best explanation for the uneven pattern of rich-world activity is also the most prosaic: America’s recovery is more advanced and its firms have rebuilt their stocks sooner. Europe’s business cycle tends to lag America’s by a quarter or two. Recent indicators point to greater convergence. The index of American manufacturing published by the Institute of Supply Management unexpectedly picked up from 55.5 to 56.3 in August. The corresponding indices for the euro area and Britain fell back, to 55.1 and 54.3 respectively. America’s economy may have some unique troubles, but its fortunes are still strongly tied to the rest of the rich world.

Plus one country

This article compliments Becky's article on labor unrest in China. The article talks about labor issues in Vietnam and claims that it will become "China's plus one country". The article shows through graphs how the labor in Vietnam is cheaper than in China or in any other surrounding nations, claiming that this could provide a large boost to the Vietnamese economy. The country is showing progress in the garment export industry and the labor unrest in China is helping Vietnam come into the forefront. However the article continues to discuss that the gains in GDP over the years combined with the growth in garment exports is still not sufficient for the country.

Russia extends its grain export ban

Russia, one of the world's biggest producers of wheat, barley and rye has decided to lift its wheat export ban. The ban was imposed due to the drought in most parts of Russia which tremendously affected its grains production. However, this lift will facilitate decreasing the wheat prices which have risen by 1.4% over the last month. Even though this export will help in the reduction of the commodity prices of US Wheat stocks, it will solve a bigger crisis at hand- that of hunger and riots due to hunger. Developing countries like India, Mozambique and Zimbabwe are bearing the brunt of high bread prices and this is severely affecting the pockets of the lower middle class families of these countries. Mozambique witnessed second day of riots due to increase in prices of wheat related items such as bread. This brings us to a different question. Should Russia- the largest producer of wheat, undergo a ban on the most basic food item of the poor? Does it not realize the impact it has on the functioning of the different countries of the world due to the ban?

Oil Rig Exploded in Gulf, Coast Guard Says

An offshore oil rig exploded in the Gulf of Mexico this morning at 9:30 CDT just west of the location of the blast in April that caused a massive oil spill. All 13 crew members have been rescued with only one who was injured. According the the Coast Guard the rig, owned by Mariner Energy, was not currently producing however it is not clear whether or not there is an oil leak. What will this second explosion mean for the oil industry? Will there be any economic backlash even if the blast has not caused a second oil leak?

Increase in Spending on US Autos

In the month of August consumer spending on Automobiles was the highest its been in years. This led to an overall increase of consumer spending in the economy, which economists see as hopeful. Economists had expected Consumers to spend much less because of unemployment and underemployment. Saving rates are still low, but much higher than they were in the 2007 recession and were about what economists expected. Although increased spending is greater than expected, growth in the economy has still been too slow to account for job growth and we could we are no where near out of the woods on this recession. If saving rates don't start rising, we could slip back into recession.

Burger business: BK going private

Firstly, I didn't know there was such a difference in types of consumers that McDonald's and Burger King target. I guess intuitively there should be a disparate for both of them to strive in the same market. It is interesting how McDonald caters to more than one customer class by having varying products. Secondly, I think it is a good approach to make BK private again to reduce effect of market fluctuations and allow the private-equity firms that control it come up with better strategies to beat the competition-rather than just copying .

How to help homeowners who want to sell? Should we keep helping?

I think this article from Fortune compliments the article posted by Andrew on whether it is better to buy or rent. Dean Baker, an economic policy researcher suggests that the market should dictate prices, and that no help should be given to keep people in homes they really can't afford. Baker says that people in this housing crunch should be given the option to stay in their homes by renting for up to five years. In the "buy or rent" article by Andrew, the author says that after six years, it is better to buy than rent a home. That being said, maybe this option proposed by Baker makes sense, that in the short term renting is a good option (for everyone) but eventually people will want to buy (and there will be sellers) and the prices that the houses sell for is dependent on willingness and ability to buy. This may be a tough lesson for Americans to learn when it comes to the housing market.

Debate on combatting high US unemployment may be misguided

Much of the debate today about combating the US' high unemployment rate of 9.5 percent centers on how to get the economy back to full strength. Thus, the discussion focuses on an additional stimulus and other ways to encourage demand to take hold again in the economy. These assertions are based on the assumption that full-employment in the US is 5 to 6 percent in the US. This assumption forces us to think of the high unemployment rate as being caused solely by a negative cyclical turn in the economy. However, more attention and validity needs to be given to the assertion that, as a result of the weak financial and housing markets, the US economy is not as efficient and adaptable as it once was. And, that full employment in the present circumstances may mean an unemployment rate of up to 7 percent. Thus, even though much of the high unemployment rate today is due to a negative cyclical turn that needs to be combated, the Obama Administration may need to consider a more structural solution to the US economy's lack of efficiency in the recession.

Is it better to Buy or Rent?

For many who are not able to land in a home, a new debate his risen over whether it is better to buy or rent homes. Right now, many who cannot afford to buy a home can rent one for little cost, yet the study shows it only takes about 6 years for buying a home to be worth it. With the current recession and the economy recovering, would you consider buying a home instead of renting? Or Wait?

Japan Offers New Stimulus Plan

As a way to curb its faltering economy, the Japanese government has planned to create new stimulus plans to stop the heavy inflation of the Japanese Yen. Though the Yen has been generally strong over the past decade, the country's econonmy has been struggling with deflating falling prices, and the inflated currency has brought the country into an intriguing dillemma. The Japanese government has now allowed banks to increase the flow of the money supply from 20 trillion yen to 20 trillion yen, while also allowing loans more loans to occur as well. Many critics believe that this new plan will actually not cause much change towards the economy, "The government talks of the need for fiscal reconstruction, but then tries to construct an economic stimulus package with tiny fiscal measures and minor, uncoordinated structual reforms," stated by Japanese economist Richard Jerram. Overall I believe that this economic plan is more of a political stunt enacted by the Japanese government, in the near future there probably won't be that much change, but long term positive effects could occur.

China "Reversing reform"

The Chinese government, since 1978 has experienced a rather planned economy which, has been moving towards a more of a capitalist approach in recent years. China has always made sure that they had a majority share of the firms which are established in their country. This article is addressing how China, now, is contemplating wether to get more government control in the economy once more. One problem is for companies who wish to enter the market have to compete against government run firms, which is rather challenging for a company facing bias from the government. Chinese companies who have the benefit of being state-run also as the, "third danger: the growth of a wealthy, state-supported oligarchy creates a powerful constituency against reform."

Which leaves the speculation if China will stay where it is currently in its reform or go more liberal with their policies or even more conservative.

No Decision on Reviving Homebayer Credit

The Obama administration has not decided whether it should resurrect a popular tax credit for first-time homebuyers.Those opposed to bringing back the homebuyer tax credit say it would blow a bigger hole in the federal deficit, while supporters see it as key to stabilizing a pillar of the economy that faces headwinds despite low mortage interest rates.I said bring it back , but that it just me...

Public sector job cuts 'to hit Wales and North'

An economic think tank has made a forecast that one in every ten people in the UK will be unemployed due to the cut in public sector jobs in Wales and Northern UK.

"According to the Centre for Economics and Business Research (CEBR), the unemployment rate will exceed 10% in Wales and the North of England."

Fortunately, London, South East and South West England will not suffer as bad because of the growing financial sector in those regions. "London is expected to account for 20% of the economy by 2015, thanks to the expected continued growth in financial services."

Since many of the jobs available in Wales and the North and public sector jobs, the cut back in government spending will hit them hard not to forget the private sector, which relies on many public sector contracts.

Small Businesses Fear Hit From Rise in Tax Rates

This is an article about how Obama want to raise taxes for small business owners. The going rate right now is 33% to 35%, which are the tax cuts that President Bush made while in office, will go to around 36 to 39%. Especially in these tough time's this would be a terrible time to make this decision. With small business once you start taking more money away from the company and its owner, the only way business owners can cope with that change is to make cut backs. With the US at 10% UE and small businesses employing like 80% of the American work force, you could bet that UE would rise as a result for these increase in taxes.

Obama: GOP should let small business bill through

Today it was released that Obama "exhorted Congress on Monday to make passage of a long-languishing small business aid package its first order of business when it returns next month from its summer break." Obama plans on extending Bush's tax cuts for households making under $250,000 a year, upping the nation's investment in clean energy, rebuilding more roads and highways and tax cuts designed to keep jobs in the United States. Also, Obama plans to "...target measures designed to spur the economy and create an environment conducive to hiring." Do you think this will help the economy any more than the last package Obama put into place? Being that the package won't be as major as last years stimulus package do you think the package will have much leverage on the economy and job market?

Consumer Spending Picks Up

Consumer spending increased about .4% from June to July, a slight increase that may be linked largely to car sales. The report also asserts that consumers are saving less. Could this be linked to the decreased credit card debt - is it likely that consumers are saving less but using that money to pay down debt?

The article ends with a quote that claims the economy cannot rely on households to improve the situation - do you agree that further government intervention is necessary or beneficial?

US wasted billions in rebuilding Iraq

KHAN BANI SAAD, Iraq – A $40 million prison sits in the desert north of Baghdad, empty. A $165 million children's hospital goes unused in the south. A $100 million waste water treatment system in Fallujah has cost three times more than projected, yet sewage still runs through the streets

As the U.S. draws down in Iraq, it is leaving behind hundreds of abandoned or incomplete projects. More than $5 billion in American taxpayer funds has been wasted — more than 10 percent of the some $50 billion the U.S. has spent on reconstruction in Iraq, according to audits from a U.S. watchdog agency.

There are success stories. Hundreds of police stations, border forts and government buildings have been built, Iraqi security forces have improved after years of training, and a deep water port at the southern oil hub of Umm Qasr has been restored.

Things to question?

Was going into Iraq worth it?

How has the War impacted our economy? Positively or Negatively? Why?

Lowest credit card debt level in past eight years

With the U.S. economy in shambles for the few years and more and more credit card debt building with the innovation of credit and online shopping, credit card debt has become a real problem in today's society. However, there is hope. With credit card debt falling under $5,000 for the first time in eight years and people making more timely payments, people and their debt look to be correcting themselves. This 13% decrease, from the national average of $5,719 last year, shows great improvements in the saving power that Americas were thought not to have.

UK economy grew 'more than first thought'

The UK economy grew 1.2% in the second quarter, the fastest rate of quarterly expansion since 2001. This expansion occurred at the same time the US had to revise its annual growth estimates down to 1.6% from 2.4%. The Office for National Statistics in the UK feels that the growth in the UK was boosted by the increase in construction output and that the overall effects of quarter were 'very positive'. However, many business leaders have warned that the "strong pace of growth would not last". One business leader argues that the US is a major driver of the global economy and that "we've got to ensure equally that growth in the US will get back on track" since any weakness in the US economy will ripple through to other countries, including the UK. So now it remains to be seen whether the current pattern of growth will remain or be reversed, as well as how the growth or decline of the US economy will effect that of the UK and other countries around the world.

Housing's new nightmare

Despite the continuous improvement in previous months on GDP and unemployment rates (3.2% GDP growth rate on the 1st Q 2010 and lowest jobless claim in April), the reversal shift is becoming the new trend. Currently, the jobless claims remains high (473,000 filed) and the new home sales drop 12.4% to a record low (from 315,000 in June to 276,000). Worse yet, some 3.51% of borrowers were 30 days late in their loan payments in the second quarter of 2010, up from 3.31% at the end of last year, according to new data from the Mortgage Bankers Association.

The economic atmosphere remains gloomy. It will be a a while yet before the US is going to get back on its feet.

Strikes in China Unprecedentedly Successful

China is not precisely well known for having a sincere regard for human rights. This naturally translates to labor rights within the economy. However, this disregard is starting to have repercussions for Chinese businesses. A series of strikes in southern Guangdong province  by mostly migrant workers at factories for Japan's Honda and Denso Corporation have set a precedent that offers hope to many human rights advocates interested in the Chinese economy. State-ownership and limited media rights to coverage mean that heretofore strikes have been remarkably unsuccessful. The recent strikes have been shockingly successful in making gains for workers. These strikes were likely met with success in part because the factories are Japanese-owned and thus the media was allowed to cover the events. Eventually, Honda and Denso employees were able to obtain pay increases and limited benefits. This may mark a slight shift in the structure of China's economic system. This is the first breach of their absolute ban on independent unions and collective bargaining. Such a shift would give workers significantly more power but may also raise costs in what in generally known as the "Workshop of the World."