Page One Economics

"The back story on front page economics." These accessible essays, written by economic education specialists, cover the basics of economic topics, with a separate version for use in the classroom. Special "Focus on Finance" essays cover personal finance.

Current Issue

  • Income Tax: Facts and Filings

    Federal individual income tax must be paid to the U.S. government, but the amounts paid vary widely. The December 2016 issue of Page One Economics®: Focus on Finance addresses basic facts about the tax"”its history, purpose, and current structure.


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  • International Trade

    As Adam Smith said, everyone lives by exchanging. They exchange—buy and sell—to make themselves better off. Does the same principle apply to international trade? Do nations benefit from importing and exporting? The November Page One Economics explains the basics of international trade and its importance to the economy.


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  • Financing Businesses and Public Projects with Stocks and Bonds

    Stocks and bonds offer potential gains for investors, but they can also help fuel the economy. The October 2016 issue of Page One Economics®: Focus on Finance explains how stocks and bonds can help companies grow, entrepreneurs start businesses, and governments fund public projects.


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  • Why Is It So Difficult To Buy a High-Quality Used Car?

    With prices of new vehicles at all-time highs, many buyers are looking for used vehicles. It can be challenging, though, to figure out what is or isn’t a good deal.


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  • Soft Skills: Success May Depend on Them

    Hopefully Booker T. Washington’s words inspire you to do your best in school, but Peggy Klaus has some sage advice as well: “Soft skills get little respect but will make or break your career.” Peggy Klaus is a leadership coach and the author of The Hard Truth About Soft Skills: Workplace Lessons Smart People Wish They’d Learned Sooner.


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  • Stock Market Strategies: Are You an Active or Passive Investor?

    If you ever ask an economist which stocks to buy, chances are you won’t get a specific answer. Instead, you might hear about the “efficiencies” of markets. In fact, there’s an old economics joke about market efficiency: Two economists walk down a sidewalk—one is older and wiser and the other is younger and less experienced.


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  • The Smart-Chip Credit Card: A Current Solution

    “New and improved” credit cards are appearing in wallets of consumers across the United States. Designed for additional security for consumers and businesses, the new cards command the attention of consumers, merchants, and financial institutions.


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  • Making Sense of Unemployment Data

    Job growth has been healthy for five years. However, many people still express concern over the health of the overall labor market. For example, Jim Clifton, CEO of Gallup, states that the “official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading.”


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  • myRA: A New Way To Save for Retirement

    “It is never too early to start saving for your retirement.” You’ve certainly heard this advice before. Is it good advice? Sure it is. Is it easy to follow? Maybe not. Many of us have more immediate expenses that get our attention and money before we think about retirement.


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  • College: Learning the Skills To Pay the Bills?

    It’s often said that a college education is the key to success. And the decision to go to college is one of the most important choices young people encounter.


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  • Peer-to-Peer Lending

    If you have ever taken a personal finance class, you likely remember that the teacher emphasized the importance of maintaining a good credit score. The teacher might have said that a good credit score gives you access to loans and credit cards with comparatively lower interest rates.


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  • What's in Your Market Basket? Why Your Inflation Rate Might Differ from the Average

    Does it feel like your dollars go as far as they used to? If not, how does that mesh when reports say inflation rates are lower than average? The October issue of Page One Economics explains the disconnect between what you might experience as a consumer and what the data show.


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  • Falling Oil Prices Create Winners and Losers

    Oil prices affect the U.S. economy in many ways. For example, fluctuations in the price of oil can influence inflation, unemployment, and disposable income. Some local economies with close ties to the oil industry, however, are affected even more directly in both positive and negative ways. This essay covers one recent example of the local impact of oil prices.


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  • From Coins to Big Bucks: The Evolution of General-Purpose Reloadable Prepaid Cards

    Prepaid cards were invented to solve a problem: replacing coin usage in pay telephones. Since then, prepaid cards have evolved into a huge competitive market for general-purpose reloadable (GPR) prepaid cards. Read more about GPR prepaid cards in the inaugural edition of Page One Economics Focus on Finance


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  • Is a Strong Dollar Better than a Weak Dollar?

    "Strong" is usually preferred over "weak." But for the value of a country's currency, it's not that simple. "Strong" isn't always better, and "weak" isn't always worse. Learn more about foreign exchange rates in the March 2015 newsletter""Is a Strong Dollar Better than a Weak Dollar?"


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  • Would a Gold Standard Brighten Economic Outcomes?

    Historically, money was made of either valuable commodities such as gold or silver coins or pieces of paper (bills) representing these commodities. The United States severed its last official monetary link to gold in 1971. The January 2015 Page One Economics Newsletter describes some of the advantages and disadvantages of the gold standard.


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  • Smoothing the Path: Balancing Debt, Income, and Saving for the Future

    The life cycle model shows that saving for the future requires people to limit consumption during their working years and save so they will have a "nest egg" to draw on during retirement. Recent changes in how people save for retirement have shifted some responsibility from firms to individuals.


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  • Economics and the Environment

    How are economics and the environment related? The quick answer is that environmental quality is a worthy goal, but there is an economic trade-off -- a clean environment does not come without costs. The September 2014 Page One Economics article, "Economics and the Environment", provides some economic strategies for protecting the environment.


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  • The Economics of Immigration: A Story of Substitutes and Complements

    America is a nation of immigrants, who currently make up about 13 percent of the overall population. The May 2014 issue of the Page One Economics Newsletter shows how immigration affects the average American. The essay weighs the costs and benefits of immigration and discusses the concept of immigrant workers as substitutes for and complements to native-born workers.


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  • Would Increasing the Minimum Wage Reduce Poverty?

    The nonpartisan Congressional Budget Office tackles that question in a new report and highlights the trade-off presented by increasing the minimum wage. This issue of the newsletter explains the debate and discusses whether other approaches may be more effective in helping alleviate poverty.


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  • The Rising Cost of College: Tuition, Financial Aid, and Price Discrimination

    The cost of a college education seems to be skyrocketing"but is it really? Learn about the concept of price discrimination and how it affects college costs.


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  • The Global Economy: It's a Small World After All

    To understand why people trade, suppose you were limited to consuming only items you could find within walking distance of your house. Or, perhaps even worse, only items you could produce yourself. For most of us, this restriction would severely diminish the variety of goods and services we enjoy on a daily basis. Therefore, the simplest answer to the question is that people (or entire countries) trade because they will enjoy a wider variety of goods.


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  • Why Scarce Resources Are Sometimes Unemployed

    The unemployment rate always seems to be in the news, but did you know there are different kinds of unemployment? There is the natural rate of unemployment; cyclical, frictional, and structural unemployment; plus underemployment. Read the October 2013  Page One Economics Newsletter, "Why Scarce Resources Are Sometimes Unemployed," to learn the differences.


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  • What Are the "Ingredients" for Economic Growth?

    Is there a recipe for economic growth? Perhaps some Miracle-Gro for the economy? If only it were that easy. While the exact recipe is a mystery, economists have identified some of the key ingredients. This month's newsletter discusses the role that economic institutions play in fostering long-term economic growth.


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  • Making Sense of the Ups and Downs of Prices

    "Back in my day, a gallon of gas cost a quarter!" Has your grandfather ever said something like this to make a point about how expensive things are now?  The price of gasoline indeed used to be much lower. In fact, the price of gasoline has risen from a little over $1 per gallon in 1992 to a little over $3.50 per gallon 20 years later.


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  • GDP: Does It Measure Up?

    How is the total value of all the goods and services produced in a country's economy measured? Gross domestic product (GDP) is one common and fairly comprehensive measure. This month's newsletter explains GDP components and how it is calculated. It also describes what GDP does"and does not"measure.


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  • Prices: The Marketplace's Communication System

    Remember when airlines started charging for checked bags? What happened to the number of checked bags after this added charge? And what happened to the availability of in-cabin storage space on planes? This month's newsletter answers these questions and discusses the pivotal role price plays in a market economy.


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  • Money and Inflation: A Functional Relationship

    They say that "money makes the world go round." Just imagine a world without money as our method of payment for everyday transactions. Without money, we would all need to barter for necessary goods and services. For example, suppose an accountant needs to have her car fixed. Under a barter system, she would have to find someone who needed some tax advice in exchange for car repairs. The search to find a barter partner is time consuming and wasteful. Money solves this problem and many others. Read more about the three main functions of money and the damaging effects of too much inflation on these functions.


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  • Investing in Yourself: An Economic Approach to Education Decisions

    "Human capital" may not be the first thing that comes to mind when we think about investments, but investing in education and training is an important economic decision. Learn about human capital and the return on such an investment in the February 2013 Page One Economics Newsletter""Investing in Yourself: An Economic Approach to Education Decisions."


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  • Choices Are Everywhere: Why Can't We Just Have It All?

    As the Rolling Stones song says, "You can't always get what you want." So we make choices. Every day, governments and individuals choose how much money to spend and what to purchase. The January 2013 Page One Economics Newsletter, "Choices Are Everywhere: Why Can't We Just Have It All?" discusses opportunity costs and scarcity and how they effect our spending decisions.


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  • The Output Gap: A "Potentially" Unreliable Measure of Economic Health?

    The output gap is one (of many) economic indicators used by economists to measure the strength of the economy. What exactly is the output gap, and how accurately does it predict the state of the economy? Read this month's Page One Economics Newsletter, "The Output Gap: A 'Potentially' Unreliable Measure of Economic Health," for an explanation of the output gap and answers to these questions.  


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  • The Great Inflation: A Historical Overview and Lessons Learned

    All inflation isn't bad"a moderate amount can signal a healthy economy. But high inflation, such as that during the Great Inflation, can lead to a viscious cycle where expectations of higher inflation lead to further increases in the price level. Read the October 2012 Page One Economics Newsletter to find out what caused the Great Inflation, how tough (and painful) policy brought it to an end, and two key lessons learned.


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  • Higher Gasoline Prices: Temporary or Time to Buy a Hybrid?

    Drivers may wonder whether the most recent spike in gasoline prices is temporary or will be longer lasting. Will prices eventually decline"maybe even to below $3 per gallon? Or is it time for drivers to alter their driving habits, maybe by buying a hybrid car? Be sure to read the September 2012 issue of Page One Economics Newsletter ""Higher Gasoline Prices: Temporary or Time to Buy a Hybrid?""for a discussion of factors that might influence that decision.


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  • The Legacy of the Olympics: Economic Burden or Boon?

    Competition, sportsmanship, and national pride are the foundations of the Olympics, but how much do the Olympics cost the host city and country? What are some of the economic benefits and costs? Is the investment in the Olympics worth it in the end? Read about previous host experiences with the economic side of the Olympics in this month's Page One Economics Newsletter "The Legacy of the Olympics: Economic Burden or Boon?" (see related graph: "Olympics-Related Temporary Increase in Employment"


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  • "Wait, Is Saving Good or Bad? The Paradox of Thrift"

    The average saving rate for the typical American household before the recession started in 2007 was 2.9 percent; since then it has risen to 5 percent. Uncertainty about the future was the primary driver for the increase. More saving is a good thing, right? Well, some economists argue it might be detrimental to the overall economy. Given the benefits to individuals, how could this be? This month's Page One explores this "paradox of thrift."


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  • "Dewey Defeats Truman": Be Aware of Data Revisions

    The famous"Dewey Defeats Truman" headline illustrates the importance of timely and accurate data. Agencies that compute economic indicators for the $14 trillion U.S. economy face a tough challenge: providing up-to-the minute results and ensuring the reliability of the data. This month's Page One newsletter, "Dewey Defeats Truman": Be Aware of Data Revisions, explains why there is often a trade-off between these two factors and discusses the importance of data revision.


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  • Gini in a Bottle: Some Facts on Income Inequality

    Income inequality has been rising in the United States and other developed countries. The March 2012 Page One Economics Newsletter discusses income inequality, its causes, and some possible policy solutions.


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  • Traditional Versus Shadow Banking

    Modern economies rely heavily on financial intermediaries to channel funds between borrowers and lenders. In the first edition of the Page One Economics Newsletter, the role of traditional banking is outlined and a parallel system"shadow banking"is explored.


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  • What Do Financial Market Indicators Tell Us?

    To those unfamiliar with financial and economic lingo, the terms bandied about in the news can sometimes make no sense. The January 2012 Liber8 Newsletter, "What Do Financial Market Indicators Tell Us?" offers some help with explanations of common terms. The essay is accompanied by a table of terms, definitions, and the significance of each to the broader economy.


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  • Then and Now: Fed Policy Actions During the Great Depression and Great Recession

    Although the recent Great Recession was severe, its financial impact never paralleled that of the Great Depression. The November Newsletter compares these two economic downturns and shows how lessons learned in the Great Depression helped current Federal Reserve policymakers stabilize the economy during the recent economic crisis.


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  • Natural Disasters: From Destruction to Recovery

    Natural disasters often cause extensive loss and damage, yet post-disaster reconstruction may create opportunities that bring long-term economic benefits. Read the October 2011 Newsletter "Natural Disasters: From Destruction to Recovery" for details.


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  • Time Inconsistency: Today's Actions = Tomorrow's Regrets

    Have you ever bought something you really couldn't afford? You simply swipe your credit card and leave the store with something shiny and new. That instant gratification overpowers any thought of the regret you'll have when you must start paying off your accumulated debt. Economists call this phenomenon time inconsistency. Read the September 2011 newsletter for some ideas on how to prevent time inconsistency for yourself and your government.


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  • Is a College Cap and Gown a Financial Ball and Chain?

    The cost of a college education continues to rise.The Project on Student Debt estimates that a typical 2009 college graduate accumulated $24,000 in student loan debt. Is a college degree worth the cost? Read the August 2011 Newsletter for the latest data on college versus high school graduates' earnings and employment prospects.


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  • Financial Regulation: A Primer on the Dodd-Frank Act

    Last July, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 brought the most sweeping financial regulatory reform since the Great Depression. The May 2011 Liber8 newsletter outlines key provisions of the Act intended to prevent or lessen future financial crises and enhance consumer protection.


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  • Quantitative Easing Explained

    "Quantitative easing" has been in the headlines a lot from 2009 to 2011. First there was QE and then QE2. What exactly is quantitative easing, who does it, and how does it affect the economy? This month's newsletter has the answers.


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  • Fiscal and Monetary Policy in Times of Crisis

    To find out more about fiscal and monetary policy" who conducts them, how they work, and their roles during economic downturns" read this month's newsletter.


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  • Deflation: Who Let the Air Out?

    Inflation, deflation, disinflation. They affect the prices of everything we buy. To find out how and what's happening in today's economy, see the February 2011 newsletter, "Deflation: Who Let the Air Out?"


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  • Financial Crises, Reform, and Central Banking: Establishing the Federal Reserve

    Financial crises and recessions have often led to significant financial reform. Perhaps the most noteworthy financial reform of the past century was the formation of the Federal Reserve System in 1913. This month's newsletter provides historical details of events leading up to the founding of the Federal Reserve.


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  • The Ins and Outs of Unemployment Insurance

    Although the economy is rebounding, the unemployment rate remains high and private sector job gains remain weak. economists debate whether extending unemployment benefits keep unemployment artificially high by discouraging work.


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  • The Environment Is About Economics, Too

    The cleanup cost of the April 2010 BP oil spill in the Gulf of Mexico is estimated at $6 billion, not including the economic damage to the fishing and tourism industries, which will likely add several billion more. Proponents of stricter environmental regulation believe such catastrophes could be prevented at a reasonable cost. Opponents argue that many preventive procedures are too costly to justify, given the rarity of such incidents. Determining the right balance between preserving the environment and controlling costs is a difficult job for government regulators. Read the October 2010 Newsletter for a look at the economics behind the regulations.


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  • State Pension Plans in Peril: The Need for Reform

    State and local government employees have long enjoyed the perk of a guaranteed pension in retirement, but that may no longer be the case " because of the recent recession, state budgets are in trouble. Many states have under-funded their pension plans to pay current expenses, and many pension plans have also incurred huge investment losses due to the financial crisis. How can states remedy this problem? The September 2010 Newsletter, "State Pension Plans in Peril: The Need for Reform," offers possible solutions.


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  • Sovereign Debt Crises: It's All Greek to Me

    Greek's current sovereign debt has reached crisis levels. Should the United States expect something similar? Probably not. Read the August 2010 Newsletter to learn why (or why not).


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  • Patents: Protecting Inventors and the Public Good

    Patent rights are becoming increasingly controversial in areas such as pharmaceuticals and genetics. Should the public good come before the private gain of new product inventors or developers? The May 2010 Newsletter tackles this issue.


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  • Exploiting Exportation: Why Foreign Exchange Rates Matter

    The emphasis on global economics is here to stay, but how does it affect the average citizen? The April 2010 Newsletter examines the links between foreign exchange rates and global trade and explains the effect on U.S. prices and import/export trading.


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  • The U.S. Deficit Outlook March 2010

    For years, economists have debated the wisdom of increasing government spending during recessions. On the one hand, increased spending adds to budget deficits, but on the other, increased spending can stimulate the economy during a downturn, thus speeding recovery. Deficits topped $1.4 trillion in the latest recession"which raises two questions: "How big is 'too big' in terms of spending?" and "What are the long-term consequences?" The March 2010 Newsletter offers some insights into this timely topic.


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  • Executive Compensation and Market Risks

    Some U.S. taxpayers were angry and felt betrayed when financial company executives received large bonuses in the midst of the 2008-09 financial crisis. These executives headed some of the same firms whose risky practices contributed to the crisis"and then later received billions of dollars in government bailouts. Who makes the changes in executive compensation policies and regulations to avoid such risks in the future? Read the February 2010 Newsletter for answers and interesting insights.


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  • A New Trend for U.S. Household Spending

    Holiday sales are expected to be weak again this year even though the economy and financial markets are improving. Shoppers are especially reluctant to use credit cards for holiday purchases. According to the National Retail Federation's 2009 Consumer Intentions and Action Survey, only 28.3 percent of holiday shoppers will use credit cards; this is 10.6 percent lower than one year ago. Why are shoppers so hesitant to use their credit cards this year? Many factors are involved. Read the January 2010 Newsletter for the answers.


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  • How Would Modern Macroeconomic Schools of Thought Respond to the Recent Economic Crisis?

    What would some of the most famous economists, such as John Maynard Keynes, Milton Friedman, and Adam Smith, and their followers say about the current financial and economic crisis? The November 2009 newsletter essay by Michelle Armesto outlines their probable responses.


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  • Early Childhood Education

    Which public investment offers greater returns"a subsidy for a sports stadium or early childhood education? It might surprise some, but the answer is an investment in early childhood education. A research study from the Federal Reserve found a 16 percent return on such an investment, with 80 percent of the return going to the general public. The October 2009 Newsletter explains the lifelong benefits of early childhood education.


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  • Retraining Displaced U.S. Workers

    When the current U.S. recession ends and recovery begins, many pre-recession jobs, such as some in financial services and the automobile industry, will not return. So what are the options if jobs in your chosen industry no longer exist? The September 2009 Newsletter focuses on job retraining programs and lists some areas of projected job growth for the near future.


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  • Education and Earnings

    According to the Bureau of Labor Statistics (BLS), achieving a higher level of education is one way to guard against unemployment and increase earnings: A 2008 report found that workers with a bachelor's degree earned 65 percent more than workers with only a high school diploma and nearly 130 percent more than workers without a high school diploma.


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  • A Crack in the Nest Egg: Are Americans Doing Enough to Save for Retirement?

    Before the current recession, soaring stock prices and housing values made many Americans feel well off, and thus many were lax in saving for retirement. The current financial market downturn has erased much of the previous gains, leaving many workers unprepared for retirement.


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  • What Does Foreclosure Entail?

    The FDIC estimates that an additional 4 to 5 million mortgages could enter foreclosure over the next two years. How did this happen, and what can be done to improve the situation? The April 2009 Newsletter offers some insights and further resources on the foreclosure situation.


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  • What's Under the TARP?

    The new economic terms and programs"from TARP to TALF to COP"are important, but trying to keep track of it all can make your head spin. Read the March 2009 Newsletter for a clear, concise explanation of the Treasury's Troubled Asset Relief Program designed to help alleviate the nation's financial crisis.


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  • What Is a Recession?

    The past year has seen much debate about whether the United States is officially in (or not in) a recession (it is). But just what is a recession? Who decides that fact and how? Or, in other words, what actually makes a recession a recession? Read the February 2009 Newsletter for all the details.


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  • Season's Greetings and Seasonal Adjustments

    Have you every wondered what the term "seasonally adjusted" means in relation to economic data? What does the change of seasons have to do with economics? The January 2009 Newsletter explains the term and shows its effect on economic data.


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  • U.S. Health Care Insurance and the Uninsured

    With continuing increases in both health care spending and the number of Americans who are uninsured, everyone seems to have an opinion on how to rein in costs and provide better coverage. This month's Newsletter offers an overview of why costs are so high and what can be done to improve the situation.


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  • China's Uncommon Emergence: Still Under Way

    China has emerged as a global player both socially and economically. What's behind China's great strides in economic performance? This month's Newsletter details some of the reasons for China's growth.


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  • U.S. Farm Subsidies

    Why should the average American care about the 2008 Farm Bill and farm subsidies? Farm subsidies can affect the price of food and can influence the amount of taxes we pay. This month's Liber8 newsletter explains why farm subsidies were originally used, spotlights the debate about their continued use, and points out some changes to the 2008 Farm Bill.


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  • School Vouchers: The Right Choice or Wrong Policy for Improving Our Schools?

    August is back-to-school time, but for many families that means a return to poor-performing schools. The perennial question is how to improve performance. The use of school vouchers is one proposed but highly debated solution. This article examines the history of school vouchers and the major arguments for and against them.


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  • The Economic Cost of War

    It is difficult to measure the cost of the Iraq war and related expenses; it is at least as difficult to decide exactly what costs to measure. The May 2008 issue compares the two most widely cited estimates: one from the Congressional Budget Office and the other from researchers Joseph Stiglitz and Linda Bilmes. The newsletter also compares these estimates to U.S. GDP over the same time frame to get a better sense of the war's cost in relation to the entire U.S. economy.


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  • Ethanol: Is Corn the Golden Fuel?

    With oil prices well over $100 per barrel, policymakers are considering everything from new fuel efficiency standards to biomass in an effort to reduce U.S. gasoline consumption. High oil prices, global warming, and the vitality of the American farm have introduced words such as "ethanol," "E85", and "flexible-fuel vehicle" to American households. However, the potential costs and benefits of ethanol production should be considered objectively.  This month's newsletter explores the costs and benefits of America's golden fuel"ethanol.


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  • Baby Boomer Retirement

    Over the course of the next two decades, an average of 10,000 baby boomers per day will reach retirement age. Their retirement will cause a surge in federal spending. This month's Newsletter shows how the retirement of the baby boomers will affect government programs such as Social Security and Medicare and the federal budget.


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  • The Economic Impact of an Influenza Pandemic on the United States

    They have been known to be deadly, disorderly, and expensive. Influenza pandemics occur 3 to 4 times every century, and many health experts believe another U.S. pandemic is unavoidable. How would a modern-day influenza pandemic affect the U.S. economy? Predictions include $700 billion in economic losses and a 5.5 % drop in GDP the year a severe pandemic occurs.


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  • Big-Box Retail and Its Impact on Local Communities

    What is the local impact of big-box retail? Some states have begun to reconsider whether the benefits of such development are worth the costs to local communities.


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  • Economic Globalization

    Globalization has been covered heavily in the news recently, with special focus on the rise of China in the global economy and the sense of more job insecurity in the United States.


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  • The U.S. Personal Saving Rate

    This month's newsletter focuses on the low and declining U.S. personal saving rate. As measured by the Bureau of Economic Analysis (BEA), the U.S. personal saving rate fell into negative territory during the third quarter of 2005 and has remained close to zero since then.


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  • Subprime Mortgage Lending

    This month's newsletter covers the topic of subprime mortgage lending, with data and explanations you may find useful. The subprime market has been a closely covered news topic of late.


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