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Contents contributed and discussions participated by tiffany danielle

tiffany danielle

Global poverty: A fall to cheer | The Economist - 0 views

  • The new estimates show that in 2008, the first year of the finance-and-food crisis, both the number and share of the population living on less than $1.25 a day (at 2005 prices, the most commonly accepted poverty line) was falling in every part of the world.
  • The estimates for 2010 are partial but, says the bank, they show global poverty that year was half its 1990 level.
  • A lot of the credit goes to China. Half the long-term rate of decline is attributable to that country alone, which has taken 660m people out of poverty since 1981.
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  • The world reached the UN’s “millennium development goal” of halving world poverty between 1990 and 2015 five years early. This implies that the long-term rate of poverty reduction—slightly over one percentage point a year—continued unabated in 2008-10, despite the dual crisis.
  • Most of the progress has been concentrated among the poorest of the poor—those who make less than $1.25 a day.
  • All this is good news. It reflects the long-run success of China, the impact of social programmes in Latin America and recent economic growth in Africa. It is also a result of the counter-cyclical fiscal expansions that many developing countries, notably China, embarked on in response to the 2007-08 crisis.
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    This article talks about the decline in global poverty and China being a major contributor or factor to this improvement. From data collected by the World Bank's Development Research Group, new estimates of the population living on less than $1.25 a day has been decreasing in every part of the world. Data shows that even when the world has experienced the worst economic crisis since the 1930s and the biggest food price increases since the 1970s in the past four years, the population of people living in poverty has declined starting in 2008.
    Most of the credit for the improvement of a decline in global poverty goes to China. It's extraordinary economic progress has eradicate many poverty in their nation. In 2008, China's population living on below $1.25 a day drops to 14% from 77% in the early 1980s. Without China, global poverty wouldn't decrease as much. While China counts as the biggest contributor to the long-term improvement, Africa has also seen its largest decline in poverty. Africa's poverty used to increase every three years from 1981 to 2005. Its poverty even doubled from 1981 to 2005, however in 2008, its number of poverty decreased by 5%. The world is seeing a great improvement in decreasing global poverty.
    Through this improvement, we can see the long-run success of China, the impact social programs in Latin America and economic growth in Africa. Fiscal expansions also help eradicate the number of people in poverty.
tiffany danielle

South Korea's economy: What do you do when you reach the top? | The Economist - 2 views

  • For most poor countries, South Korea is a model of growth, a better exemplar than China, which is too vast to copy, and better, too, than Taiwan, Singapore or Hong Kong. All three are richer than Korea but all are, in different ways, exceptions: Singapore and Hong Kong are city states, while Taiwan’s disputed sovereignty makes it sui generis.

  • South Korea has not merely grown fast. It has combined growth with democracy.
  • At the same time Korea has combined growth with equity.
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  • Now Korea can add resilience to its roster of achievements. It was walloped during the global financial crisis, but recovered faster than any other rich country.
  • Yet in 2010, GDP grew by 6%. This year’s expansion is likely to be 4%. The unemployment rate is now a covetable 3%. Some of the recovery is the result of Korea’s happy dependence on China: it exports more capital goods to China relative to the size of its economy than anyone else, even Germany.
  • The government also initiated a public-works scheme that is mopping up over 2% of the labour force. It introduced an old-age pension and began, then expanded, an earned-income tax credit.
  • If the Korean economy goes on growing at 4.5% a year and America’s at 2.5%, Korea would overtake America (in PPP terms) only a few years later.
  • The Korean model had four distinctive features: a Stakhanovite workforce; powerful conglomerates; relatively weak smaller firms; and high social cohesion. All these are either coming under strain, or in need of reassessment, or both.

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    South Korea is a nation that has grown so much economically from its past. An example of its growth is the recreation of Cheonggyecheon. Twenty years ago, the river had dirty and hidden waters that were trapped beneath highways. It was full of poverty, slums and no fisherman would even bother to fish there. Nowadays, the river has become the opposite. It's surrounded by the bustling and industrializing city that's constantly building the new financial district. Fishermen go to Cheonggyecheon stream to catch fishes. Another example is their vast economic growth from 1960. After the war in 1960, South Korea was one of the poorest countries in the world, with an income per head on the same level with the poorest parts of Africa. Surprisingly by the end of 2011, it will be richer than the EU average, with a GDP per person of $31,750.
    South Korea's capability to economically rise is a perfect role-model example for poor countries. It is a better example than China, which is too vast to copy and better than Taiwan, Singapore or Hong Kong. South Korea didn't only grow at a fast pace, it also combined democracy and equity with its growth.
    Not only has South Korea's economy vastly grown, it also bounces back from its crisis very fast. South Korea's fast recoveries are a result of Korea's dependence upon China. Korea exports the most capital good to China relative to the size of its economy than any other countries. Another reason for its fast recoveries is the government's public works scheme. The scheme introduced an old-age pension which expanded an earned-income tax credit. South Korea is expected to overtake America (in PPP terms) a few years later if its economy keeps on growing at 4.5% and America's at 2.5%. Korea now needs a new or change in tactic to keep growing from its impressive growth.
tiffany danielle

Taxation and class war: Hunting the rich | The Economist - 0 views

  • Recent austerity budgets in France and Italy slapped 3% surcharges on those with incomes above €500,000 ($680,000) and €300,000 respectively.
  • Barack Obama has produced a new deficit-reduction plan that aims its tax increases squarely at the rich, including a “Buffett rule” to ensure that no household making more than $1m a year pays a lower average tax rate than “middle-class” families do (Warren Buffett has pointed out that, despite being a billionaire, he pays a lower average tax rate than his secretary). Tapping the rich to close the deficit is “not class warfare”, argues Mr Obama. “It’s math.”
  • The maths says deficits could technically be tamed by spending cuts alone—as Mr Obama’s Republican opponents advocate.
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  • We reject the notion, implicit in much of today’s debate, that higher tax rates on the wealthy are justified because of the finance industry’s role in the crunch: retribution is a poor rationale for taxation. Nor is the current pattern of contribution to the public purse obviously “unfair”: the richest 1% of Americans pay more than a quarter of all federal taxes (and fully 40% of income taxes), while taking less than 20% of pre-tax income.
  • High marginal tax rates discourage entrepreneurship, and no matter how much Mr Obama mentions “millionaires and billionaires”, higher taxes on them alone cannot close America’s deficit.
  • But there are three good reasons why the wealthy should pay more tax
  • First, the West’s deficits should not be closed by spending cuts alone.
  • Second, there is a political argument for raising this new revenue from the rich.
  • So far most governments have focused on raising marginal income-tax rates, something most rich people respond to quickly (see article). Capitalists shift their income into less-taxed forms, such as capital gains; they move; they work less; they take fewer entrepreneurial risks. Even if it is hard to be sure how big these effects are, the size of the very top level seems to matter, so Britain’s 50% rate is more dangerous than Mr Obama’s proposal to raise America’s top federal income-tax rate from 35% to 39.6%.
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    This article is telling the readers that Obama has planned to impose higher taxes on the wealthy people only. He thinks it's reasonable to do so simply because it's math (wealthy people earn more money than the poor, so they shouldn't pay less taxes than the poor.) His goal in doing so is to counter the U.S. deficit. However, his opponents think that imposing higher taxes on the rich will not fully help the U.S. deficit. The deficit can be reduced by only cutting down expenses.
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