...To scrutinize the many aspects of the current “generation debt”, we have to, firstly, utterly understand the concept of “generations” and what the older generations left or not left for the young. We use the word “generation” often in our lives and we are familiar with terms such as “G.I. Generation”, “Baby Boomers”, “Millennials” and so on and so forth. Essentially, there are two purposes of using the notion of generation: to distinguish different aging groups in general and to attribute individuals into a particular category. Thus, to distinguish the 20 something or 30 something young people today, we best refer them to “Millennials” who are known as in birth rates in the 1980s and 1990s. in addition, to find out the reason why the “Millennials”...
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...Student Loans, Debt, and Retirement Letter the Editor on Student loans, Debt, and Retirement I am writing in response to an article written by Mason Braswell’s “Generation W(on’t be Able to Retire” featured in On Wall Street. It is clear that generation “X” will face a new set of challenges with their future plans of retirement. The large amount of student debt they accumulate will have worse affect’s on their financial future’s than the baby boomers before them It is noted that students now should see student loan repayments as a part of their financial obligations after receiving their degree in the same manner as buying a car or a house. It is questionable if this generation will even be able to retire with such costly commitments they have incurred. Supporting this authors position research reflects the impact of these high debts will collide with financial futures reaching even into the retirement plans of generation “X”. This letter will present some facts on the financial issues they will encounter as they plan for their “golden years”. First, student debt has become a huge problem for many individuals. For generation “X” student debt is one of life’s realities that will end with an unpleasant consequences. Studies are showing the boomer’s children will be the first generation of individuals to experience the perils of debt and its effect on their lives and retirement plans. Mason writes that “80 is the new 65” (Braswell, para 2). Retirement planning is going to...
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...The U.S. National Debt Econ Problems & Issues: ECO405 Professor Myung Han Alex R. Scales June 10, 2012 The national debt is the total amount of money the United States Treasury Department has borrowed and currently owes to the federal government's creditors (Sylla). These creditors are mostly comprised of the public, including individuals, corporations, as well as state, local and foreign governments. They also consist of various government trust funds, such as Social Security and Medicare. Additionally, they include the Federal Reserve, mostly in the form of treasury bonds, bills and notes. Currently, the U.S. national debt is estimated to be $8.5 trillion (ZFacts). This ever-growing figure brings with it several social and economic implications. Therefore, the national debt is a frequently debated topic that has over the years produced various schools of thought on how the U.S. government should manage it. In order to understand how the national debt could ultimately affect future generations of the United States and the different ways the government can best deal with it, it is first necessary to discuss its’ history. The origin of the national debt dates back to the War of Independence. In 1775, the Continental Congress authorized an issue of $2 million of bills of credit called Continentals to finance the war. At the end of 1779, $241.6 million of Continentals had been authorized in addition to several U.S. loan certificates, foreign loans, and state-issued...
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...are necessary to rejuvenate the economy. Overall, the huge debt it creates for the government, as well as the impact it has on future generations make deficit spending a practice that can seriously cripple the country’s government. The initial issue deficit spending causes is a large increase in the country’s debt. By definition, deficit spending is spending more money than is being taken in. This will cause even greater debt, as deficit spending is most commonly used in times of recession. In fact, deficit spending with the Recovery and Reinvestment Act in 2009 resulted in over 500 billion more dollars in debt for America. This money has to come from somewhere, and since America already had debt, they had to get loaned more money from other countries. Deficit spending does the exact opposite thing of its purpose: it increases debt. Deficit spending increases an already enormous debt, and its repercussions last for several generations. After long periods of deficit spending take place, the debt accumulates to huge levels, and as a result, it is left for future generations to manage and eventually pay off. The ever growing debt will ruin many positive relations the US had with other countries, and will have lasting effects about the credibility of the US. The debt may also lead to devaluation of the US dollar and inflation, creating even more problems to be fixed. All of these problems leave the next generation with a...
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...Whether the National debt creates a burden to future generations, it depends. Who believe National debt is a burden because future generations have to repay taxes for present spending. Who believe National debt is not claim that every debt is also credit, government debt is not in itself a burden to future generations unless it is largely owed to foreign creditors. It is relatively easy to calculate currency government debt burden. Inheritance and succession credit debt is not evenly distributed. Bondholders assumed strict credit inheritance, and strictly taxpayers debt inheritance. Everyone has a different burden equal to their tax expense, minus their income from government spending. Firstly, foreign banks are a real currency debt burden, because interest payments constitute a genuine money transfers out of the nation. Second, although it may have little or no as a whole country's debt burden, the interest of the nation constitute a transfer of wealth among the citizens, especially as future taxpayers transfer payments to the creditors. Thus, although technically possible intergenerational burden countries add up to zero, it is not personal. The real burden is enormous shift from those who pay taxes, who received consumption, and those who charge interest. Keynesian economists object and say that debt does not hurt future generations, provided that "we owe it to ourselves." A large debt could make, the Keynesians acknowledge, for an unequal and inequitable society, by...
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...Anna Kimmet Mrs. Murphy Eng 1050 Sec. 13 Essay 1 The Challenges of Generations throughout history. History is marked with each generation having had to deal with their struggles in respect to social and economic development. In a book entitled Generation Debt, author Anya Kamenetz discusses some of the struggles that her generation is facing in an economic setting infinitely different from the one that her parents dealt with, merely one generation before her own. Kamenetz outlines how her generations struggles with retrospect to that of her parents and shows the impending graveness of what the future has to hold for future generations. The author defines “generation” as, people within a defined population that during a given time period experience the same important events. Kamenetz compares “human life stages as natural demarcations of growth, like the rings on a tree” (Kamenetz 329). Kamenetz also writes that social and economic structures also decide the divisions between infancy and old age. The author intentionally goes through chronologically and outlines the birth of the term childhood and its effect on people, socially and economically through the centuries. With this timeline given Kamenetz brings the concept of a new life stage forming as a result of the birth of childhood. This new life stage has forced children to go to school longer and seek additional education in order to obtain a job that really does not need further schooling to do. The example...
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...Professor John Hullar, MPA September 7, 2009 Capital Budgeting Paper The paper discusses how the debt capacity of a governmental entity is determined. The paper after that evaluates the impact of refunding existing debt obligations. The paper after that analyzes the various funding alternatives which can be used to support debt obligations followed by a description of how rating agencies evaluate governmental risks. The conclusion comes in the last section of the paper to summarize the findings of the paper. Determination of Debt Capacity of a Governmental Entity In determining the debt capacity of governmental entity, debt capacity must be identified within an organization. According to Dias, et al. (1995), “project debt capacity is defined as the maximum amount an owning company can borrow in a perfect capital market in order to fund a project” (p. 408, ¶12). In the City of Oasis scenario, the City of Oasis wants to fund the project of building a main bridge over the Tamarra River. The new project will costs $5 million for the new bridge that will be built within 6 months. For the City of Oasis this means that the city needs to create a Capital Projects Fund along with a Debt Service Fund. The City of Oasis also needs to create budgets and issue bonds for public debt. The City of Oasis must determine any restrictions that exist under state law. The City of Oasis must also identify their short and long-term...
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...Public Debt? Public debt is also sometimes referred to as government debt. It is a term for all of the money owed at any given time by any branch of the government. It encompasses public debt owed by the federal government, the state government, and even the municipal and local government. Public debt accrues over time when the government spends more money than it collects in taxation. As government engage in more deficit spending, the amount of public debt increases. Public debt can either be: 1.1External debt 1.2Domestic debt or Internal Debt 1.1External debt: Public debt can be made up of all sorts of different types of debt. A great deal of public debt is external debt, which is money that is owed by the government to foreign lenders, either in the form of international organizations, other governments, or groups like sovereign wealth funds which invest in government bonds 1.2Domestic debt or Internal Debt: Public debt is also made up of internal debt, where citizens and groups within the country lend the government money to continue operating. In some ways, this is a lot like lending to oneself, since ultimately the responsibility for public debt falls back on the very people lending money. 2.0Benefits of Public Debt * It is an alternative for financing fiscal budget deficit * Deficit budget raise the recession and public borrowing help the economy not to be fall in recession * Public debt refers...
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...analyze, and utilize financial information for decision making. In this course financial ratio analysis is a very important term what helps us to find out the real condition of any company's. Here we are going to find out the financial ratios of GENERATION NEXT FASHIONS LTD from . We will use the time series to compare of GENERATION NEXT FASHIONS LTD's ratios. 1.2 Objectives of the project paper: The traditional financial statements that comprise of the balance sheet and profit and loss account do not give enough information related to financial operations of the company. These financial statements prepared as per the statutory requirement of law need to be analyzed in order to evaluate the past performance of the company and the future prospects. Our perspective to do this project paper are giving below: * To gather practical knowledge about ratio analysis. * How do the time series work to do the internal comparison? * What types of solution GENERATION NEXT FASHIONS LTD can take to improve its future condition. * We want to see the past and present condition of the GENERATION NEXT FASHIONS LTD. * How efficiently it used its fixed and current assets. * How quickly it can convert its inventory. * Showing Debt providing time, payable time, receivables time, operating profit, market price, book value to see the average condition of the...
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...the prudent regulatory measure of the central bank including guidance regarding prudential norms of capital adequacy, classification of loans, on-site and off- site super vision have made the PCBs sound in Banking operation. For these reasons, they are found profitable in their business. Their exposure in respect of the cost of debt helps them to ensure higher profitability and their potentiality in the banking industry. An effectively functioning financial system requires a banking system that can earn a reasonable return by taking an acceptable level of risks. 2.0 Statement of the problem In order to survive in the long run, it is important for a bank to find out what are the factors influencing cost of debt so that it can take initiatives to increase its profitability and performance. Bank performance is also vitally important for all stakeholders, such as the owners, the investors, the debtors, the creditors, the depositors, the managers of banks, the regulators and the government. In this study the research question is “What are the factors that influence cost of debt of private commercial banks in Bangladesh Capital is an important and critical resource for all companies. The capital resources can be divided into two...
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...This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: G7 Current Account Imbalances: Sustainability and Adjustment Volume Author/Editor: Richard H. Clarida, editor Volume Publisher: University of Chicago Press Volume ISBN: 0-226-10726-4 Volume URL: http://www.nber.org/books/clar06-2 Conference Date: June 1-2, 2005 Publication Date: May 2007 Title: The Dot-Com Bubble, the Bush Deficits, and the U.S. Current Account Author: Aart Kraay, Jaume Ventura URL: http://www.nber.org/chapters/c0124 11 The Dot-Com Bubble, the Bush Deficits, and the U.S. Current Account Aart Kraay and Jaume Ventura 11.1 Introduction Since the early 1990s, the United States has experienced steadily widening current account deficits, reaching 5.7 percent of gross national product (GNP) in 2004 (see top panel of figure 11.1). These deficits are large relative to the postwar U.S. historical experience. With the exception of a brief period in the mid-1980s where current account deficits reached 3.3 percent of GNP, the U.S. current account has typically registered small surpluses or deficits averaging around 1 percent of GNP. As a consequence of the recent deficits, the U.S. net foreign asset position has declined sharply from –5 percent of GNP in 1995 to about –26 percent by the end of 2004 (see bottom panel of figure 11.5). The goal of this paper is to provide an account of this decline that relates it to other major macroeconomic events and helps us to...
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...Default of 1998 Abbigail J. Chiodo and Michael T. Owyang currency crisis can be defined as a speculative attack on a country’s currency that can result in a forced devaluation and possible debt default. One example of a currency crisis occurred in Russia in 1998 and led to the devaluation of the ruble and the default on public and private debt.1 Currency crises such as Russia’s are often thought to emerge from a variety of economic conditions, such as large deficits and low foreign reserves. They sometimes appear to be triggered by similar crises nearby, although the spillover from these contagious crises does not infect all neighboring economies—only those vulnerable to a crisis themselves. In this paper, we examine the conditions under which an economy can become vulnerable to a currency crisis. We review three models of currency crises, paying particular attention to the events leading up to a speculative attack, including expectations of possible fiscal and monetary responses to impending crises. Specifically, we discuss the symptoms exhibited by Russia prior to the devaluation of the ruble. In addition, we review the measures that were undertaken to avoid the crisis and explain why those steps may have, in fact, hastened the devaluation. The following section reviews the three generations of currency crisis models and summarizes the conditions under which a country becomes vulnerable to speculative attack. The third section examines the events preceding the Russian default...
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...Student Loan Debt” author Malcolm Hadley describes the difficulties young Americans facein this day and age because of the cost of education and how it’s affecting their outlooks on life and their goals. In his article, Hadley iterates what is holding this generation back:the “tens of thousands of dollars in student loan debt” (Hadley); As a result, they cannot afford to have what is commonly associated with being an independent adult. Many millennials find themselves dreaming of living independently, marrying, or being able to buy an apartment. The author continued to expand his argument by delving further into the lives of millennials who do choose to start families and lead traditional lives and how their student loans continue to burden them; often couples both have debt and are reluctant to go into that next phase of their lives while so indebted. Essentially, what Hadley argues is that being chained to their student debt is making young Americans strive for more simplicity than the traditional...
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...deficit, as well as the second highest debt to GDP ratio in the EU. The paper uses insights from the literature to offer an analytical treatment of the crisis in Greece. The crisis itself is very likely to be a result of: The gradual worsening of Greek macroeconomic Fundamentals over 2000-2009 to levels discrepant with other EU members. A shift in market expectations, from a scenario of credible commitment to future EU participation to a scenario of non-credible EU commitment without fiscal guarantees, respectively occurring in November 2009 and February/March 2010. The pricing by markets of a (previously nonexistent) default risk that follows the withdrawal of an implicit guarantee on Greek debt by other EMU countries (mainly Germany). Interestingly, our account of the 3 factors sparking and escalating the crisis also helps explain why prices on Greek government bonds have not recovered but continued to plummet following the announcement of the EU/IMF rescue plan. Our analysis suggests that the involvement of an external institution like the IMF in EU affairs will in all likelihood widen the market uncertainty over possible co-ordination failures between the EU and IMF policy makers and fail to stabilize market expectations on a credible resolution of the Greek crisis. LITERATURE REVIEW Some work has been done by Vanessa Rossi and Rodrigo Delegado Aguilera in their paper, “No Painless solution to Greece’s Debt Crisis”,...
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...to the electric utility industry chose to changes it strategy by creating a subsidiary PPL Global “to pursue business opportunities in the unregulated electricity marketplace” (Esty, Ferman3). Senior management recognizing the need to create a more competitive environment within the company began a restructuring process from 1994-2000. In 1999 the company announced it intended to double its generation capacity by 2005 “through acquisition of existing plants and development of new plants” (Esty, Ferman 4). Jim Abel and PPL’s Finance team determined that in order to execute this new strategy PPL needed to maintain access to large amounts of capital at low cost while maintaining the financial soundness of the corporate balance sheet. This culminated in the separation of its unregulated generation businesses from its regulated distribution and transmission businesses in 2000(Esty, Ferman 4). The environment PPL was operating in during this time was not conducive to PPL Global using Corporate Finance to raise the billions of dollars needed to fund the expansion of the company’s generation portfolio. To use Corporate Finance would result in a burden on the company as a whole while putting the PPL at risk of credit downgrades resulting in it becoming increasingly difficult to raise additional needed capital. Thus, the finance team evaluated raising funds at the PPL Global level through project financing and Leasing structures to provide the financial flexibility needed to raise...
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