Free Riding Health Care

                A claim being made against the health care system that President Obama wishes to employ for the United States is that it is unconstitutional for everyone to be forced to get their own health care and pay for it. The issue with the health care market is the existence of free-riders, which are not as large of a problem in any other market. Some people will refuse to pay for any of their health care if it is offered to them for free, which will damage the market. Even if there is universal health care, where everyone gets coverage, the U.S. still wants people to pay for extra coverage that the U.S. government does not deem mandatory.

                In general, passing the current health care mandate could be a positive for the free market of the economy, because everyone will be involved, and it will hopefully be forced to thrive, and the only people who will be harmed are those who were not paying for their health insurance in the first place. If the mandate does not pass, the people who are harmed are the people who do pay for their insurance and do not free ride on the current state of the system, as well as the workers who lose compensation because of the free riders who are abusing the system.

Tragedy of Population Growth

                The Tragedy of the commons is when people act in their own interest and use up limited resources the world has in an inefficient manner. One overlooked example of the tragedy of the commons is the literal human population. The human population has been growing at an incredibly rapid pace, doubling in the last sixty years, and is expected to reach nearly ten billion in the next forty years. Little is being done by the governments of the world to recognize how important it is to think about this growth strategically. In the current state, we do very little to deal with population growth, and it is leading to a tragedy of the commons. Millions of people are unable to do anything for the world because of their economic circumstances, and this is wasteful of them as resources. Humans have something to contribute to the quality of the world, but many are unable to gain the opportunity to do anything.

                At upcoming political summits, scientists are requesting that world governments take a serious role in helping deal with population growth. This growth is being wasted, and is contributing to the rather negative state of the current world economy. The balance between people in different parts of the world is completely out of sync, and governments need to take a step back and start working on helping to share resources that are being wasted on people that do not need them, and should be shared with those that do need them, as this could lead to total economic expansion by solving the wasting of the human resource.

Gross Domestic Prodcut news

Gross Domestic Product reports for the first quarter of the year in the United States economy were released recently, and show a mixture of positive and negative news. The negative news is that the U.S. saving rate has decreased again, which it has been doing steadily in the last few months. This is either due to optimism about the future, or a lack of choice and the latter seems to be the more likely scenario. This decrease in saving comes hand in hand with the fact that U.S. consumption is increasing, without wages or income matching that rise.

                The fact that the Gross Domestic Product as a whole increased can be seen as a positive thing, as the U.S. economy is still growing, which does not have too many drawbacks. It is also being used as a tool by the current incumbent politicians as economic expansion is a positive thing to have going for you in an election year.

                One of the biggest positives that economists have been stating with the recent news is that there are no signs that point to another economic recession occurring. Growth may not be at what is expected, but the economy seems to be working its way out of the doldrums of the last few years.

Nuclear Energy and Government Intervention

The Nuclear energy industry took a massive blow to its progress last year, when after an earthquake and tsunami, a plant in Japan took severe damage and made the surrounding area incredibly dangerous to inhabit. While this may have weakened the nuclear movement, it is not stopping it. Many countries are beginning to establish their own nuclear programs, and several countries with existing nuclear energy programs are looking to expand. 

Nuclear energy provides over 1 tenth of the world’s energy, and this number is only going to increase in the next twenty years. China and India, with their massive populations, are at the forefront of increasing nuclear energy, as it will allow them to bring electricity to the hundreds of millions in their nations that do not have it. 

One of the major problems that nuclear energy faces in its progress, is the heavy costs of producing it. Nuclear power has the capability to cause massive destruction if not monitored correctly. Transaction costs involved in allowing for nuclear energy are quite high. There are many protest groups against the use of nuclear energy, who fear nuclear disaster, and they go through the government to drive up the transaction costs involved in selling nuclear energy to the people. 

Government intervention is what can help save the nuclear industry and cause its expansion. Despite the high transaction costs, which are partially brought on by the government, the government can assist the nuclear industry in producing more efficient and numerous plants. If utilized properly, nuclear power can be a great boon to our society, and it would be in the government’s best interest to intervene so the world’s well-being can improve.

 http://www.bloomberg.com/news/2012-03-25/nuclear-industry-says-back-on-track-after-fukushima-speed-bump-.html?cmpid=yhoo

the Iran-Royal Dutch Shell Scenario

The oil industry is an immensely complex organism. Oil is one of the world’s most valuable and most limited resources. It is found throughout the world, in many different nations. These nations are not always on the best of terms, which can make negotiations over payments very tense. 

Numerous political sanctions on Iran by countries in Europe and North America are what can cause problems when dealing with Iranian oil. Right now, Royal Dutch Shell, based out of the Netherlands, owes significant amounts of money to the National Iranian Oil Company, and is struggling to pay it, because of the sensitive political climate involved.

Due to political circumstances, caused by Iran’s attempts to get a nuclear program off the ground, there are problems in trading within the oil industry. Since the government has stepped in and caused detrimental effects to oil trading, the Coase theorem cannot be applied. Transaction costs are incredibly high, so even though the property rights are relatively simple, the trading is not pareto efficient. 

In fact, the transaction costs are massive for the Royal Dutch Shell company. The company owes Iran over 1 billion dollars on a single bill, and are running out of time to pay it off. The company is stopping trade with Iran now, because they do not want the bill to get any larger. 

Shell isn’t the only company to face this problem. Just last year, a French company, Total, shut down trade with Iran  because of the issues of political sanctions making trade more difficult.

 http://finance.yahoo.com/news/exclusive-shell-scrambles-pay-huge-100856324.html

Alaska and the Oil industry

United States citizens residing in Alaska receive government money every year, but not in the traditional manners, such as social security, or tax refunds. Some of the money made in Alaska’s booming oil industry is put into a special investment account, and this account pays out dividends to the Alaska residents.

Every year, these dividends seem to be getting higher, and the Alaskan economy itself is getting stronger and stronger. This has a lot to do with the state of international trade. On a global scale, the supply of Oil is limited and always becoming more limited. In Alaska, the supply of Oil is still rather large, with copious amounts of it still yet untapped. In Alaska, due to the rather low population, the demand for Oil is rather low. It is still somewhat significant, but mostly because of the oil industry itself. The Demand in Alaska for oil is still lower than the demand in the contiguous forty-eight states, as well as the rest of the industrialized world.

One of the major results of the economic boon of the oil industry, is that the economy of Alaska has avoided the severe downturn of the economy that has so affected the rest of the nation. Expansion of the oil industry in Alaska, as currently planned, will prove to benefit the state at a great level, allowing it to grow economically, and become a larger factor in United States politics.