RS5 - GDP

The term GDP is a term that most economists know very well, the three letters GDP stand for Gross Domestic Product.  The whole calculation in and out of itself is one giant mess and can cause a great controversy. Economist use GDP to determine how the economy is doing as well as to determine how happy a person might be due to a high GDP.  The difficult part about using GDP is that its a national average and does not speak for people individually because the equation becomes skewed and makes it seem like the economy is doing a lot better then it actually is.    

GDP calculates the United States total output and it breaks it down to sections, but one section that really stands out is defense spending.  The United States spends about 711 billion dollars on the countries defense department while China who is ranked number two is at 143 billion dollars in spending on defense department.  The United States spends almost five times more then China does. And the United States makes up forty percent of the worlds total spending on defense.  It is just hard to imagine why we need so much money to finance the defense of our country.  To me it seems overdone but this is a huge reason as to why our total GDP is so high.  If you lowered the spending on our countries defense we wouldn’t have such a high GDP. 

People argue that a high GDP will create happiness for the people, but how could this be true if we are spending 7% more on health care then western European countries while their life expectancies are all greater then the United States.  We also value our money a lot more then Europeans do as we work more hours then they do while they average 4-6 weeks of vacation. Europeans buy homes the same size as someone making more money over here in the United States because they don’t value their money as high as we do in the US. So you cant say the GDP proves how happy someone is because Europeans are just as happy with less money but equal assets.  So ultimately they have less funds. To me Gross Domestic Product can only be valued so much, but at a certain point, it becomes simply opinionated and as the article stated, “GDP per capita can cause a bar fight.”

RS4 - Would You Let a Coin Toss Decide Your Future?

While listening to the podcast from Freakonomics titled "Would You Let A Coin Toss Decide Your Future?" I began to think about what they were talking about in the beginning of the podcast when they were talking about a prior podcast they had that dealt with people quitting things that they have been doing for a long time but just are not sure about anymore.  They interviewed people and asked what they had quit, and there were some decisions you just do not understand.  The first one they mentioned was a man who was a professional car racer who decided to quit because it was not something for him.  Now that same guy uses a coin to make decisions in his life that dont have a lot banking on it.  For instance he uses a coin flip to decide which restaurant he would like to go to.  Another woman quit her job to become a escort. A very strange decision that she thinks fits her.  Life is honestly about how you personally feel and if you are not enjoying something then you can just step away and not think about it anymore because it is just not a factor in your life anymore.

Life comes with many choices and every choice you make will affect your future.  You may regret some decisions and you may love some decisions but in reality you cannot go back and change them because what is said is done and it is set in stone.  But im a firm believer in every decision you make will eventually pay off in some way.  Whether it is a small decision or a decision that is life altering, there will be some sort of good that comes out of it. But as the podcast focuses on the fact that life is all about decisions, some people have used their podcast and took it to their life and applied it.  It made people think, one man said he has quit everything he is bad at.  He told his kids to quit things that they were not good at.  

Freakonomics has created a webpage where you can go to with decisions of all kinds.  You go through a series of questions that you ask yourself and think about and if you still are not sure then you can actually flip a virtual coin that is 100% real in the aspect that it can land on either side and there is an option where you can do the best 2 out of 3 to determine things if you are just really on edge about. To me this is really cool and maybe its something i would consider using.  But only for decisions that are small and would not affect me either way the coin landed. But I feel as though this site could also be dangerous because what if someone had a serious question regarding life or death and they let a virtual coin flip make the decision for them.  So in some instance this site could be harmful.  As you go through life make sure the decisions you make are thought out and is made for all the right reasons. 

RS3 - A New Mom And The President of Iceland

Listening to Planet Money's podcast "A New Mom And The President of Iceland," I had several things run through my mind.  One being why would people from England and the Netherlands trust a random bank from Iceland with their money when they probably have never even heard of them. And two when the financial crisis occurred why did the people of England and the Netherlands think they were entitled to get their money back when they took a gamble and lost.

The fact that there was a vote on whether they should pay back England and the Netherlands or not to me is just ridiculous.  It should have been a unanimous decision to not pay England and the Netherlands back.  I don’t know why people would be scared that it would go to court because in my eyes, as I already stated, the people took a gamble and ultimately lost.  Obviously the bank is going to take care of the people in its own country.  They are their main clients, not the people of England and the Netherlands.  It would just be a generous thing to do to pay the people of another country back their money, it’s not an obligation unless they signed some sort of contract when they opened the savings account with the bank in Iceland.

The vote ended up being sixty percent with the no don’t pay them back and forty percent yes pay them back, so the governments of England and the Netherlands took it to International Court.  The courts final decision was that Iceland did not have to pay back either nation and they won, they were victorious.  They considered this a major plus, they called it their second win when it comes to war.  The only other was the cotton war where there wasn't even armies involved they joked about.  All in all in my personal opinion it should have never came to the point where the international court had to get involved because it is not the job of Iceland to pay the countries of England and Netherlands their money back because they had a financial crisis.

Although I sided heavily on the vote of not paying back England and Netherlands there very well could have been some bad side effects.  They ultimately could have been shut out of the world economy resulting in complete disaster.  If your country is not able to be part of the world economy they would not be able to trade goods, so ultimately Iceland would become a place where no one could possibly live.  The country would have to make everything, from clothing to all types of food.  And judging by the name of the country, the climate just wouldn't support that.