Understanding Economics David Horner Ph D Chief Economic

Understanding Economics David Horner, Ph. D. Chief Economic Advisor | Fixed Income Academy Susan Munson, CFP Founder & CEO | Fixed Income Academy

Objectives Provide answers to commonly asked questions to provide a basic understanding of often misunderstood economic theory. *** Our goal is to provide a foundation to enhance the ability to evaluate the news and debates in political and economic circles.

Goal: Minimize Spin Reasons for Spin Examples of Spin �Incentives �Financial Firms �Official Effect �Ben Bernanke �Lack of �Rick Santelli Knowledge �Ideology �Steve Forbes/Fox News/MSNBC

John Maynard Keynes (1883 – 1946) �British Economist whose revolutionary ideas serve as a benchmark by which we define economic thought today. �Keynes was not a Keynesian! �Keynes was a monetarist who advocated a strong dose of fiscal policy in times of financial crisis.

Zandi/Blinder Study Results �Saved 8 ½ million jobs �GDP would have been 11. 5% lower �Total cost was approximately $1. 6 billion. (i. e. : Much of TARP was recovered) �Note: Authors’ best guesses. The counterfactual is not observable. To view report: http: //www. economy. com/markzandi/documents/End-of-Great-Recession. pdf

Cause for Concern? Fed Reserve Balance Sheet It’s an Asset!! Fed Debt as % GDP

Simpson/Bowles Proposals �Sizeable cuts in growth of entitlement programs �Cuts in both defense and other discretionary spending �Increase in tax revenue �Moderate tax reform that would maintain incentives �Limited increases in spending for investment would have a beneficial return Report was bipartisan and attempted to “share the pain” For Report Summary: http: //tpmdc. talkingpointsmemo. com/2010/11/deficit-

Questions? Topics/Video Discussions in the Works… §Tax Reform §Plusses and Minuses of Consumption Tax §Importance of Private/Public Partnerships §Underfunded Pensions §Effect of Globalization on Wages §Emerging Pressure on Public Wage

“Ask the Economist” Meet Ups Today at 5: 15 – 5: 45 PM Importance of Public/Private Partnerships Tomorrow at 7: 30 – 8: 00 AM Emerging Pressure on Public Wages Stop by the Fixed Income Academy Table near Registration for details. To Reach Us: www. fixedincomeacademy. com 800 -243 -5097