Private means of controlling external costs do seem like an interesting alternative to government regulation. While I do know some people who are dedicated on this front, the vast majority of people don’t care enough to do anything about it. I don’t think enough people could collectively get together and influence anything but a few token issues. It’s a nice idea in theory, but I haven’t seen it applied too well in practice.

Richard.

I know I probably don’t have the luck in the world to win this, but I’m still anxious to find out who it’s going to be!!!

Good luck to all, I’m crossing my fingers for me though

The FED effectively controls the money supply through the interest rate. By increasing the interest rate it encourages savings, and reduces the amount of money readily available; furthermore by reducing the interest rate it encourages people to take out loans, and increases the money supply.

Inflation in its most commonly accepted terms is an overall increase in the money supply. This causes an overall devaluation if you will of every dollar in the money supply. This helps those who are in debt by making the “real” value of their debt less, and hinders those who are saving by devaluing what they have saved.

The United States is one of the best examples of a free market. While a few other countries may be a better example with less regulation, the United States has the most comprehensive history of a Free-Market state. An economic boom is a overall increase in level of economic output and aggregate demand (not just quantity demand) rising employment and regretfully inflation. While inflation is not always bad and it is unavoidable this is one of the major contributors to the economic bust and thus the cycle.

Fiat currency in its most simplistic terms is money that is accepted because the government says it must be accepted. The gold standard meant that every dollar represent gold, however this was abandoned due to its problematic nature with crisis often arising.

All is not exactly peachy for me. I admit to not being a wise money manager, and find it difficult to get into good habits with regards to finances. The economy, as everyone has pointed out (and experienced firsthand), is not treating me well either; my attempts to earn some money for savings do not get me very far. Perhaps it is a good thing to experience difficulties early in life, rather than run into them later.

My personal experiences with inflation are two-fold. First is in my day-to-day life. When you go grocery shopping on a regular basis, you start getting a feel for how much things cost. And it’s clear when things increase in cost, especially when you don’t see the corresponding increase in wages. The other instance when I come face-to-face with inflation is when I travel to visit my family in China. Not only is the increasingly less dictatorial government allowing the Chinese yuan to slide rise against the dollar, but China’s economy is operating at breakneck speed, with corresponding rises in princes. It’s very interesting; watching a third-world country attempt to be a first-world power, a Communist government and society wrestle with the best (and worst) of a free-market economy.

In terms of who benefits from inflation… As a student borrower, I can say that I benefit. With the low (or nonexistent) interest that lenders often charge students, it seems to me that I am coming out on top, since I pay back money that is worth less than it was when I borrowed it. I’m sure others benefit too, and in perhaps more insidious ways, but that’s all I can think of for now.

@ Richard

Government regulation is one alternative to internalize negative externalities in the marketplace (such as pollution), but it is not the only solution, and it certainly is not always “needed.”

The free-market can, in fact, internalize these through private means. For instance, if a corporation is polluting a river, consumers may punish said corporation and lower their profits by simply not buying their product. The “free-rider problem” sometimes renders this approach ineffective, but it is not correct to marginalize, or outright ignore, this alternative.

Moreover, I would contend that the stringent regulation of businesses inadvertently increases the political power of certain large corporations. If the government did not hold sway over certain industries, corporations would have no need to send lobbyists to Washington to, in affect, buy politicians.

- Jared

I’m sorry, I have to be the antagonizer (Is that a word?), Its just how I am..

You can blame many things on the president. He is the leader of the country, and assumes all responsibility for it when in term. He is the one who didn’t deal with the economy, even after it went in the crapper. I don’t really want to get into what he can be blamed for (war, taxes, education problems, etc. etc. etc. (still not getting into it.)) I blame him for things that I find justifiably right to be blames for. Your actions speak louder than your words. I believe that everyone should speak up and and not make a fool of yourself, do whats better for everyone, not just yourself.

My name is Barbara (from Texas). I am 34 and a mother of three awesome kids (aged 15, 6 and 5). I have a wonderful husband who supports and stands behind me as I am working towards my Bachelors degree in Computer Science (multimedia). I am holding strong with a 3.5 GPA…sure, it could be better, but with 3 kids, a husband and typical house duties…I do the best I can in giving shared time between all my activities.

Right now our debt is horrible and we are struggling more than ever before. My husband is the only one that works because about two years ago my daughter was abused at a daycare. I had never put my kids in any type of daycare prior to this event (it was on the second day of ever attending). I decided earlier and had discussed it with my husband about taking classes at our local college. Because of what she went through I had to drop all the on campus classes and go for online learning so that I could tend to and take my daughter (just 2) to the doctors on a weekly basis, the psychologist ever couple of weeks and other treatment therapy needed. She is now 5, I’m still taking online courses and tend to my baby girls medical needs. She will be continuing therapy until age 9. Since my daughter needs a lot of attention and I couldn’t see anyone other than me providing this for her, I cannot find a job that is willing to work with the hours I would need to take off in order to care for and take her to therapy when scheduled. As much as I hate that this has happened to our family, we are strong and are getting through it together. We don’t have a fancy car (we don’t even have one period). I walk two miles a day to drop off and pick up my girls from school. On appointment days, a friend of mine shuttles me around. During the hours my kids are at school, I work on the internet by means of studying (entering contests to help with things we would otherwise never afford to have) and helping my husband at the shop.

I want to get out of the rut we’re in but know that it’s going to take some time…that’s why if I can help out with other things; I do what I can to make it happen.

Thanks so much for the opportunity to enter this giveaway for a chance to win something that would be very useful in our home. You all are wonderful and I just want to thank you for this!!!

“I may not be answering a specific question but, I would like to tell you how and when my life changed by learning how to empower my self to change my financial future.

I am 19 years old and I have been on a quest to improve my financial literacy. I found a book call Rich Dad Poor Dad By: Robert Kiyosaki when I was in the 8th grade and ever since I have been devouring all the financial information I can get my hands on. I have read all of his books and many others that involve business, real state, stock market, and accounting. I read tons of blogs and magazines and attend seminars in my local town like real state government, and community conferences.

I agree that schools does not teach this subject and many cases that is why many Americans make bad financial decisions.This year I will be joining the Air Force as a apprentice contractor. I sought this to learn not earn. Then while in the Air Force I will be attending a college for my MBA. I only tell you this so you can see my future goals and just by saying them out loud motivates me to continue my learning. Thank you for your time and wish me luck.”