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asked ago in Current Economic Issues by (2.3k points)
edited ago by
I'm reading this work by Paul Krugman and I find it very interesting. Considering that I was born in Spain though I'm an American citizen working in the previous country, I haven't been up-to-date with American politics and issues until a few years ago. I think that his columns are very humane and it can turn economist into a more humane human beings. I started reading it yesterday and I'm going deep into Health care system. In my opinion economists have to reach an intermediate point in economics. Everytime you study an economic issue there are two extreme sides. For example, if you tax too much corporations you can decrease investment and innovation and if you tax too much high wages you desincentivate hard work among young people, which is the wheel of prosperity. Military spending is very necessary because the world if full of danger (In Spain the Airforce is close to suffer from technical obsolescence). On the other hand you can't let people without medical assistance because it's immoral and American people don't deserve that suffering. Regarding the first chapter I think that if privatization of Social Security was unrisky, it would be an incredible idea. So it is a terrible idea if we take into consideration slumps in economic activity and the repoblation rate is over 2.1. I'll keep reading this great book while working here in Spain because it's making me focus on economics. This is because real problems in people's life is what has to motivate an economist. Any thoughts about this book?           PD : I found an obstacle while calculating capital gains for private retirement insurances. How do you calculate the Present Value of a series of payments which increases it's amount over time? I worked on it just a few free minutes and I don't find the solution.
commented ago by (2.3k points)
edited ago by
I found this.  |A - Q[1-(1+r)^t+1]/r| (actually to get the present value you have to add the total amount without interest at the end and substract the second term to the first one) (But this modification is quite useful to calculate the total value) (I think that years should be 21 for a investment of 40 years because it's the average profit through 40 years investing the total amount year by year)

Q is the first payment. And t+1 considering that the first payment is the result of multiplying A (inicial investment) by the interest rate (first payment).          Thinking of private security system or social security system invested in national bonds with a 0.77% of interest (10 years) a retired worker would have 227 extra dollars during his retirement age (20 years) plus 500 from his 250 (40 years). It's not a horrible idea if you improve social security buying national bonds or set a mixed system (where people can invest more money than the legally stablished if they want like right now) . But the question is. Who pays the first retired workers?                PD: No way. People would buy more than 80 trillion debt with an interest of 40 trillion. Unfeasible.
commented ago by (2.3k points)
I finished reading "Arguing with Zombies". I liked it because I'm not used to American politics but I find sad that politics are so partisan in my country. It doesn't focus on economics too much but it's an opinion written about Economic Policy hot news what I find interesting.

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