Readers Question: How Much Loss Can A firm Make before going Bankrupt? Firms who make a loss, will not necessarily close down. There are various ways that firms can keep going Borrowing from Bank. Bank will offer loans if it considers the firm is likely to make a profit in the future. Selling shares. A …
There is speculation about how long interest rates will stay at zero. – See: – How long will interest rates stay at zero? Another issue is the limitations of zero interest rates. There is much hope / expectations that fiscal austerity can be offset by loose monetary policy – i.e. if we cut government spending …
There is often much discussion about the impact of tax and benefits on the distribution of income. This is an interesting graph which shows the impact of different taxes and benefits on income distribution. As expected, direct taxes (like income tax) are progressive – i.e. they take a bigger % of income from high earners. …
In the past few years, we have had a bewildering array of different crisis – credit crunch, financial crisis, fiscal crisis, banking crisis, economic crisis, depression economics, oil price shock, currency crisis, housing crashes and more. Arguably, we should be calling continued mass unemployment a crisis. In many ways, it is more serious than a …
A casual observer may have been led into thinking that the recent credit crunch and recession were caused by profligate governments, with Governments spending and borrowing too much. Much attention has been focused on the need for fiscal austerity and less on ways to maintain recovery and help reduce unemployment. Governments are not entirely blameless, …
Readers Question: How can the U.S. economy be growing, even at 2%+, when the unemployment rate is so high. The unemployed don’t pay taxes, and obviously can’t spend their earnings. The US economy may be growing by 2%, but, it is still along way below potential output. It is merely recovering from a deep recession. …
Brief History Of UK Pensions Pre 1908, provision was patchy, based on charity or ‘poor laws’ which could see old people sent to workhouses. 1908 Pensions Act introduced first general old age pension paying a non-contributory amount of between 10p and 25p a week, from age 70, on a means-tested basis from January 1 1909 …
Readers Question: My question is if some many people are aware of this debt and credit problem, why are governments continuing this policy? Debt is nothing more than future taxes which has a crowding out effect. It is a statement that says, government is a more efficient player in the market than individuals. (from Rapid …