Tag Archives: Economy

12-Year-Old Philanthropist Saves House from Foreclosure

The cost of home renovations  brought a Wisconsin woman perilously close to eviction, until her twelve-year-old grandson stepped in.

“I wasn’t even sure I was going to make it,” Noah Lamaide said of his fundraising effort.

The budding philanthropist raised $10,500 in a month, saving his grandmother’s home from a scheduled auction date of February 15.

Janice Sparhawk fell behind on mortgage payments in 2010 after taking out money to put a new roof on her home, which was partly built by her grandfather.

“My Grandma incase you don’t know her has a heart of gold. She has given so much to our community since I can remember!!!” Noah posted on his website.

Ms. Sparhawk, a foster parent to hundreds of children, was unable to work after complications from eye surgery and asthma, making it difficult to pay what she owed.

“It means a lot to be here in my house” she said. “[Noah] is a special boy.”

Noah said he was just following the example set by his mother and grandmother.

“He’s always putting others before himself, even as a little child,” Noah’s mother, Jill Sparhawk Lamaide, said.

When Noah was nine years old, his mother presented him with a challenge: do one community service project each year. With the help of his mother, Noah created a website to help raise money for the budding philanthropist’s projects.

Noah fell short of his goal last year to send a family friend with cancer, her husband, and daughter to Disneyland. The friend’s mother died before the family could make the trip. The girl left on the trip with her father two weeks ago.

The budding philanthropist said he has yet to find his next project but promised to keep making a difference. “It just makes me feel happy and like I did something to help the world,” he said.

Via ABC News.

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Facebook Files $5 Billion IPO

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Facebook files to raise $5 billion in an initial public offering of stock.

In 2011, Facebook earned $1 billion on sales of $3.7 billion. As of December 31, Facebook had 845 million daily active users.

The majority of Facebook’s revenue comes from advertising, a combination of search and display ads.

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Obama: “Defining Issue of Our Time” Is Keeping the American Dream Alive

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In his third State of the Union address, President Obama said the “defining issue of our time” is how to keep the American dream alive:

We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.

What’s at stake are not Democratic values or Republican values, but American values. We have to reclaim them.

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IRS Audits Targeting Millionaires

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The tax collector likely won’t be knocking at your door if you make less than $1 million.

In 2011, the U.S. Internal Revenue Service audited 12.48% of people who made upwards of $1 million, according to data the agency released Thursday.

That’s up from the 8.4% audited in that bracket the previous year and well above the 5.87% average examined from 2004 to 2009.

The audit rate for millionaires contrasts that of people making less than $200,000. Only 1.02% of that income group was audited last year, relatively unchanged from 2010.

For those making more than $200,000 the odds of being audited increase slightly to 3.93 percent, up from 3.1 percent in 2010.

The agency’s tiered auditing efforts also carry over to businesses.

Of the corporations with assets greater than $10 million, 17.64% were audited in 2011, compared to 16.58% in 2010. Of the corporations with assets less than $10 million, 1.02% had their books examined, up from 0.94% in 2010.

Via Dayton Business Journal.

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Rush Limbaugh: Poor Kids Shouldn’t Get Fed in School

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The School Meal Program feeds millions of kids every year. Statistics show that kids who are hungry don’t learn as well. They have a hard time concentrating because their stomachs are screaming for food.

According to Rush Limbaugh, poor children should starve their way through school. On his radio show, Mr. Limbaugh whined about poor students being on the School Meal Program, saying that feeding them instead of letting them starve turns them into “wanton waifs and serfs dependent on the state.”

He continued, “If you feed them, if you feed the children, three square meals a day during the school year, how can you expect them to feed themselves in the summer?”

How, exactly, does Mr. Limbaugh think children who are not part of the school meal program manage to feed themselves during the summer? I have a sneaking suspicion that, poor or not, children across the board are not providing their own food.

Via Addicting Info.

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Unemployment Rate at Lowest Point Since March 2009

In the midst of the European debt crisis, instability in the oil-rich Middle East and concerns about a Chinese economic slowdown, the American unemployment rate dropped last month to 8.6%, its lowest level in two and a half years.

The nation’s employers added 120,000 jobs in November, and job growth for the previous two months was better than expected. The numbers look like good news for President Obama as he heads into the 2012 Presidential election.

Even so, economists worry that a default of Greece or Italy could plunge Europe into a depression, which could send a shock wave across the ocean to throw the American economy off course. This year, higher oil prices, the Japanese earthquake, and the stalemate over the United States debt ceiling managed to drain the energy from the recovery.

November’s drop in unemployment was a welcome relief, given that the jobless rate held at 9% for most of 2011. It is at the lowest level since March 2009.

The share of workers who were unemployed fell in November partly because some people found jobs and partly because some discouraged workers quit looking for work.

A separate survey of employers, which economists pay more attention to than the unemployment rate, found that companies added 120,000 jobs last month.

Companies have taken on more temporary workers. Help-wanted advertising, retail sales, and auto sales have risen; jobless claims have fallen; and businesses seem to be getting loans more easily. Most encouraging was a recent survey of small businesses that found hiring intentions to be at their highest level since September 2008.

On the issue of government action to stimulate the economy, there has been some movement in Washington toward extending the payroll tax cut, which will expire at the end of this month. Economists have said that allowing the tax cut — which lets more than 160 million mostly middle-class Americans keep two percentage points more of their paychecks — to expire could be a drag on job creation and output growth.

An extension would probably lead to 600,000 to one million more jobs. The other stimulus program scheduled to expire by 2012 is the extension of unemployment insurance benefits, allowing some jobless workers to continue collecting for as long as ninety-nine weeks. Millions of people have exhausted their benefits. Failing to renew the extensions will cause five million more people to lose benefits next year.

Unemployment benefits have one of the most stimulative effects on the economy, because recipients are likely to spend all the money they receive quickly and pump more spending through the economy.

Via The New York Times.

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S&P to Review Eurozone Countries for Possible Downgrade

Standard & Poor’s said Monday that it placed fifteen members of the euro currency union on review for a possible downgrade as the debt crisis in the eurozone worsens.

The blanket warning applies to AAA-rated nations such as Germany, France, the Netherlands, Austria, Finland and Luxembourg.

The review does not change anything for two members of the union. Greece’s credit rating reflects a high risk of default, and Cyprus was already under review.

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Stock Markets Soar after Central Banks Announce Investment Plan

Stock markets soared today after the U.S. Federal Reserve and other central banks announced a plan to make it cheaper for banks around the world to borrow U.S. dollars.

The aim was to not only lower the cost of short-term borrowing for troubled European banks, but also to keep the global economy out of an all-out credit crunch as in 2008.

The move gave investors hope that world leaders would continue to take necessary steps to avoid a market paralysis stemming from Europe’s government debt crisis.

The Dow Jones industrial average had its best day of 2011, rising more than 480 points, or more than 4%. The S&P 500 and Nasdaq composite jumped more than 4% apiece.

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Are We in an Education Bubble?

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Since the late 1970s, costs at four-year colleges have risen three times as fast as inflation. With savings rates dropping and state aid to colleges being cut, students have been forced to take on more debt to pay for school. Today, Americans owe over six hundred billion dollars in college debt. That’s a burden hard to carry at a time when two million college graduates are unemployed and millions more are underemployed.

Some of the boom in student debt can be chalked up to demographics: in the past decade, the number of college-age Americans rose by more than three million and the proportion of eighteen-to-twenty-four-year-olds enrolled in college went from 35% to 41%.

Still, the piles of student loans are due to the fact that the cost of a college degree has been going up faster than people’s incomes. We might be living through a “higher-education bubble,” where Americans are borrowing money to spend more on college than it’s worth.

We’ve endured two bubbles, which sent the value of stocks and homes to ridiculous levels. A college-education bubble wouldn’t look exactly like a typical bubble, because you can’t flip a college degree the way you can flip a stock or a home. Bubble believers are saying that young people are overestimating the value of going to college, and that many of them would be better off doing something else with their time and money. Wages for college graduates fell over the past decade, and the unemployment rate for recent grads is close to 10%. That’s hardly an endorsement of the economic value of education.

There’s a flaw in the bubble argument, though: things may look grim for college graduates, but they’re grimmer for people without a college degree. Though recent college grads are having a hard time finding a job, it’s much harder for recent high-school graduates, who have an unemployment rate of nearly 22%.

The over-all unemployment rate for college grads is still, at 4.4%, very low. More striking, the college wage premium (how much more a college graduate makes than someone without a degree) is at a high. In fact, the spiralling cost of education has to some degree tracked the rising wage premium; as college has become more valuable economically, people have become willing to pay more for it. It’s telling, in this regard, that the one period in the past sixty years when college-tuition costs flatlined was during the 1970s, which also happened to be the one period when the college wage premium fell.

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Silvio Berlusconi Resigns

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Silvio Berlusconi officially resigned as Italy’s prime minister today.

Berlusconi’s resignation comes after Italy’s lower chamber on Saturday approved a series of austerity measures, a move to shore up confidence in the country’s economy. The package, which includes spending cuts and proposals to boost growth, was approved by the Senate Friday, resulting in a market surge.

The prime minister, who has survived many sexual and ethical scandals, pledged to step down once the economic measures passed both houses of parliament.

Berlusconi’s departure signals the end of an era in Italian politics. The seventy-five-year-old business tycoon has been a dominant force since forming his Forza Italia party in 1994.

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