Reddit Economics Network

If you watch UK news, the economic prognosis is really grim. The economic stagnation effecting Britain since the financial crisis is set to continue. At the moment, the UK has a GDP per capita approximately the size of Mississipi, one of the poorest states in the USA.

This all sounds really bad. But from another perspective, the UK has led the way for first-world economies since the early 1800's. It was the first industrialised nation in the world and it went through the stages of economic development faster than other economies. While it is very poor compared to the US, by other metrics such as life expectancy it shoots the US out of the water (82 years versus 77 years). Something like 82% of British people think the government should prioritise health and wellbeing over economic growth (something tells me the figure is much lower in the US).

Could this actually be the next stage of economic development and the UK has beaten the rest of the world to the punch?

Will Short Selling create an Economic Collapse or Will Short Selling be banned? What do you think about Short Selling in presence and future

I do not understand much about economics at all, but Trump’s planned tariffs don’t make sense to me.

Here’s my (probably flawed) logic: If we reduce or completely get rid of income tax, the lower class, which already pays a significantly lower amount in income tax or none at all, will see the prices of consumer goods increase. I don’t understand how this is supposed to benefit the general good, but like I said, I don’t really understand much about economics.

I’m just wondering if anyone has any recommendations for books or resources about consumer theory based on a consumer’s knowledge. I think I can explain it best through the boots theory:

There are three consumers that need boots. Consumer A and B have $10/year to budget on boots, and Consumer C has $50/year. Consumer A buys a $10 pair of boots that need to be replaced once a year. Consumer B buys a $10 pair of boots and takes it to a cobbler once a year to repair them, costing $5/year. Consumer C buys a $50 pair of boots and does not need any repairs.

In 10 years, Consumer A has spent $100, Consumer B has spent $55, and Consumer C has spent $50. Consumer A and B both have lower-quality boots, but Consumer B was able to have a better financial stance because of the knowledge of the cobbler.

This may be a better question for sociology, but let me know if you have any research or book recommendations that might fit the bill! Thank you!

Jorge Paulo Lemann, a Brazilian billionaire, said he's not the richest man in Brazil, as many tell. He himself know 2 or 3 people richer than him, he declared. But those apparently are not known to the public and media.

Also many people claim Putin could be the richest man in the world.

How is that possible? How are those people not under a radar?

Instead, what ends up happening is a strong increase in interest spreads, which makes sense when you consider the risk premium. However, passive rates seem to display quite a low sensitivity when they'd serve to attract more capital.

Here is the article:

https://taxfoundation.org/research/all/federal/kamala-harris-tax-plan-2024/

The tax Foundation is generally considered respectable AFAIK, but known to have a slight right bias. They have been both critical and approving of policies from both Democrats and Republicans from what I have seen, but this article appears to pretty much against Harris' plan.

My question is what your analysis of the points made in this article would be?

Please forgive my bioscience level of understanding here, and thank you in advance for your time.

With Ray Dalio having a role in popularizing a public understanding of the concept of debt cycles, I just can't help but wonder whether it's too narrow to focus so much on consumption.

One criticism of the American populace in terms of our macroeconomic impact on ourselves is we buy too much shit. Mercantilism is centuries-outdated, but isn't it undeniable that an international trade deficit can't be sustained indefinitely without the domestic growth to support it?

There's one other perspective I see as well: now by nature I am a capitalistic pig, however I think it is inevitable that society will become more and more socialistic over time. Wi-Fi is now considered a basic human need/right, and the baseline of what a human being should rightfully have access to will only continue to expand.

I'm skeptical that high unemployment is as big of a moral and sociological crisis as people think (but that's a WHOLE other issue)...I don't think we need everyone to pull their own weight economically. We already sustain the disabled, and I don't see an issue with technological development increasing economic surplus so much to the degree where we can subsidize the living of a far larger portion of the population than what we currently term "disabled".

ANYWAY please I don't mean to discuss that topic, back to my original question. A socialist economy surely isn't going to be properly modeled by making Consumption the end-all-be all measure of an economy, right?

Also please be informed that I have absolutely NO agenda whatsoever. I am actually as politically uninformed as apathetic as you could possibly get. I AM NOT INTERESTED IN DISCUSSING SOLUTIONS TO ANY CURRENT ECONOMIC PROBLEMS, ONLY ON BEST UNDERSTANDING HOW TO UNDERSTAND OUR ECONOMY and if there's a better way than putting Consumption at the center of everything.

So the Chancellor of the Exchequer in the UK, Rachel Reeves, set out their government's budget for the next five years - https://www.gov.uk/government/speeches/autumn-budget-2024-speech

They mentioned that a levy on soft drinks, a so-called "sugar tax", initially introduced in 2018 to convince soft drink manufacturers to use less sugar in their soft drinks, didn't factor in inflation when it was first introduced, so it would be uprated in line with inflation.

They also mentioned that air passenger duty had failed to take account of inflation in recent years, so this too would be uprated in line with inflation.

Is there no underlying economic theory surrounding this? It's just the government seizing on a chance to boost tax revenue?

When a question about the LTV is brought up in this sub, the library of the sub is always brought up as reference. Almost (and maybe this word can be taken out) all of the contents accessible in the library, however, seem to deal with a simple LTV.

But...

Are you Is anyone sure this is what Marx really meant?

https://www.reddit.com/r/CapitalismVSocialism/comments/1bnch3q/marx_against_the_labor_theory_of_value/

how to mathematically prove user equilibrium does not exist for electric bus trips and diesel bus trips in terms of their respective generalized trip costs ?

If we (Britain) started an economic union and focused on strengthening it (like the European Union) with all the common wealth nations and past colonial countries; what effects would this leave of the british economy? And why haven’t we actually tried this?

According to this graph which I made, gross capital formation is almost entirely cancelled out by capital depreciation (consumption), being just 6-7% of GDP at the maximum decades ago and under 2% since 2008. This means the US is barely accumulating any capital, while GDP is still growing at a decent pace. Is this a result of deindustrialisation and more emphasis on intangible assets, or have I just missed something and this is just a statistical misrepresentation?

This may be a VERY dumb question, and I may be asking it in the worst way possible, but how do I, as a consumer, know if a product increases in price due to incurred costs to get it on the shelf, or if it's corporate purposely increasing cost due to market demand, or even just greed?
Shrinkflation seems like a pretty easy thing to see I guess, but if they shrink the product, but charge the same, how do I know if it was to increase profits, break even, or to rip me off?

This is a thread for short questions that don't merit their own post as well as career and school related questions. Examples of questions belong in this thread are:

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What are somethings I can do with an economics degree?

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You may also be interested in our career FAQ or our suggested reading list.

I get that I’m an educated novice in economics and immigration policy but solving illegal immigration feels a lot easier than the US is making it.

You can’t put up enough razor wire and walls to deter people from feeding their family. Controlling immigration across a 2000 mile border is almost impossible.

If we put in severe punishments for businesses m, individuals that hire undocumented workers the supply of opportunities would slow to a trickle and one would think most would self deport. It would have to be severe enough to discourage cheating.

At that point the country can make reasonable changes to legal immigration to fill any needed labor.

Any reason that wouldn’t be more efficient beyond political theater?

Much of the United State's infrastructure in larger cities seem to work, but they are more often than not heavily used. While they work well and have proven to work well as the American economy is constantly expanding even with older infrastructure systems, would trillions in spending to have such infrastructure up to date really increase the productivity of the United States?

I'm asking this as I feel as though we have reached capacity as far as the United States economy can grow, how much more can it grow (in terms of a rate higher than we have seen in recent years) with a 10% more efficient bridge per se? Additionally, while I'm aware the United States spends more on infrastructure each year than any OECD nation, there are still many surveyors that suggest that the government is lacking behind in terms of the quality and the up-to-dateness of our nation's infrastructure.

I really trying to understand the workings and purposes of infrastructure in regards to the economy, so any information would be greatly helpful.

Hello! What are your initials thought about this article? Is this a good thing or this would only create another burden for the Filipino consumers?

https://www.bworldonline.com/opinion/2024/09/30/624551/bangko-sentral-ng-pilipinas-declaring-independence/?fbclid=IwY2xjawFwf1hleHRuA2FlbQIxMAABHeVwcYPxdlfdf_kLJo7TrPM8kd5_I_zPl1UrQeOSVFrj9R37CpMMN5j7MQ_aem_6qLqTdfKEw73M_qkEp3Bzw

Before I start, this is not a question on whether this would be a good idea or not. It’s not a political question.

I am just asking out of curiosity from more an economic/practical feasibility side.

OK…..

So would it be possible to apply VAT rates as means tested?

Everyone carries a card with them to be scanned at checkout. Wealthy people pay an additional 15%, or 20% VAT on certain products.

Average Joe pays the standard 20%.

Poorer people pay 10% less, or no VAT at all on certain products.

I think technically it could be pulled off. Retailers already use loyalty cards as part of the checkout process.

But what impact would it have economically? Are there just too many poorer people to cover that the extra VAT the wealthy have to pay, would mean it would cost the government?

PLEASE - Im not here to argue if this is a fair or good/bad idea.

Im just interested to know what impact it would have.

This plan would include a 15 percent VAT with border adjustments. 10 percent would be for the federal government and 5 percent for the states. States would eliminate their sales tax. How much revenue would this bring in? How much economic harm. Would areas should the federal government cut taxes/ raise spending to reduce harm or increase growth if this were implemented?

If the US experiences a negative population shock of -10-20m people, wouldn’t that sharply increase wage inflation because there would be a dramatic labor shortage for workers (particularly in lower income occupations like construction laborers and farm workers)? At the same time, a decrease in the population would cause a negative demand shock for things like housing, consumer staples, and other goods, which should be deflationary.

What do you think is most likely to happen to inflation or deflation in the event of mass deportation?

This is my first post on this subreddit, I think the answer to this question is easy but somehow I don't get it...

In other words, what's the difference between polluting a river (externalities) and clean air and national defence (public good). I may be mistaken in every word I said here.

Title basically

https://www.urban.org/sites/default/files/alfresco/publication-pdfs/412062-Effects-of-Imposing-a-Value-Added-Tax-To-Replace-Payroll-Taxes-or-Corporate-Taxes.PDF

This paper states on pg. 8: "Both a consumption tax and a payroll tax are neutral between present and future consumption because they do not tax the rate of return on saving, which determines how much I can buy in the future if I sacrifice consumption today. In contrast, both the individual and corporate income taxes, by taxing returns to saving, encourage people to consume more today and save less for the future."

Is this paper correct that payroll taxes are neutral for present vs. future consumption? I don't really get this because I thought the payroll tax is a form of income tax, just collected at the employer and worker end, with both burdens ultimately falling on the worker. So how come income and payroll taxes differ in their effects on present vs. future consumption?

Basically the title. I actually wanted to study more scientific fields but here we are... I will be studying economics. I am good at maths and want to study boh economics and statistics. Is it possible? Or is it more of a social science? What should I expect?

This may sound stupid but I’m a highschooler and my girlfriend has gotten 2K in refunds the last couple years and she said she upped her income tax through her employer and she gets a large refund because of it. I was wondering if it’s actually true but what are the benefits even so?

Need career advice BADLY

Graduated in May from a state school in the North East with a Bachelor of Arts degree in Economics. Still don't have a job and honestly I still don't know what I want to do with my economics degree. I don't have a career path in mind and I can't wait much longer to figure it out. The closest I got to narrowing it down is something in corporate finance/banking. I've been applying to analyst jobs, but nothing in specific in regard to position/title. I also didn't do an internship in college so I don't have a lot of experience. My resume is more tailored to my skills, knowledge, and relevant coursework rather than direct experience. I tried to go through a recruiting agency to get some temp work to bolster my resume and gain experience, but it's not really working out because they said companies won't pay premiums for some one without experience. All I'm trying to do is find entry level positions that have a clear upwards path down the line in terms of title and salary. I have one promising opportunity that I'm waiting to hear back from, but that's really it. I'm applying to countless jobs and getting nowhere. What positions should I be applying for with an econ degree and what is a basic career path breakdown for those roles? Also I realize I'm not a top candidate or anything so how can make myself more competitive for employers and have a better chance landing interviews? Any advice would be greatly appreciated, especially from people with econ degrees or who work in corporate finance/banking. I'm just feeling really lost and need some advice badly.