(this is not an example of what your responses should be...)
(I'll write more later today about your questions on PPC's, etc)
Is it time for a new, New Deal?
Author Pat Regnier talks about the New Economy (the “Anxiety Economy”) and how, although we may have more toys & gadgets than ever, we as a society are still having a problem paying our bills, saving for retirement & the kids’ college tuition, and are living paycheck to paycheck. He suggests that the new Democratic Congress should install programs to help people out, similar to FDR’s “New Deal” to get out of the Depression.
Personally, I think this guy is a nutcase. The economy is in much superior condition to anything we saw in the 1930’s. People need education, not handouts. This ties to discussions on the class blog dealing with the question of opportunity cost and competition (from the Naked Economics book). A few people wrote in asking if we were better off than our parents, and what that has to do with competition. Perhaps competition has helped to cause some of the problems listed in the article – how many credit cards does one person need, even if they are offering free stuff or special rates? How many iPods does a person need, or TV’s, or…anything? Does competition encourage us to spend our money rather than save, which can cause the decrease in the US savings rate? (Did you know that some economists say that the US now has the lowest savings rate in the world? As a percentage of disposable income, we now save about –2%. Yes, that’s a minus. In comparison, Japan has a savings rate of about 18%, and China’s is over 30%. What’s up with that?)