A guide to personal or national finances

Heading to Bankruptcy: Consumption greater than income, leading to debt-driven consumption. Safe growth:  Less consumption than income, and invest the savings. Risky growth:  Borrow to invest, betting that the investment return is greater than the cost of servicing the debt. Safe haven:  Store savings in sound money. Running your personal finance is in many ways similar to running a company or an economy. For individuals:  You sell your time, skills, and energy to cover your needs and wants, hoping to […]

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Tolls on the U.S. economy

The U.S. economy is losing its global competitiveness due to the following policy errors: 1.  High Taxes and Labor Unions are making manufacturing uncompetitive in the global market, resulting in a shift of the economy towards more driven by service & consumption.   Engineering jobs are now replaced with sales and customer service agents, making science, math, and engineering unattractive subjects in college. 2. Stringent immigration laws are driving science, math, and engineering foreigners trained in U.S. universities (often on […]

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Milton Friedman and Big Companies

Milton Friedman had pointed out that socialism and dictatorship is the natural tendency of human societies.  He had also observed that free market capitalism and the subsequent prosperity is the exception rather than the norm in human history. In fact, we can generalize the above conclusions to all human organization.   And such tendency is what drives big companies to failure.  These companies once had all the resources to maintain their market dominance.  Unfortunately, sooner or later the succumb to […]

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