Mark Cuthbertson | Law & Economics

Welcome to Councilman Mark Cuthbertson's Economics Site


Early 2018 implications for the US economy: notes

The US economy has undergone a series of ups and downs in recent years, and now, as we look forward to 2018, forecasts for the next few years appear to be promising, according to the Balance. It is estimated that most of the economic indicators will remain at healthy levels and perhaps experience growth by 2020. However, there are still some doubts remaining within these projections.

Generally speaking, unemployment rates are expected to drop during 2018 and 2019 before slightly fluctuating again in 2020, ultimately remaining lower than rates in 2016 and 2017. Underneath the numbers is the fact that a lot of the job growth will likely be seen in the retail and food service sectors. These jobs, of course, are low-wage positions, and these workers may not necessarily make the kind of money they would like to in other positions, and structural unemployment rates remain a significant focal point, with these notions in mind. Additionally, there are some who are working part-time who would much rather work full-time hours.

Interestingly, US-based manufacturing is expected to grow faster than the overall economy, with production figures predicted at a 2.8 percent increase. This growth would be a reversal from previous trends that indicated that this particular sector was in trouble. Now, it seems that manufacturing is on the rebound.

At the same time, crude oil prices are projected to average $57 per barrel in 2018, based on a US Energy Information Administration outlook from 2018-2050. The oil market is currently still responding to effects of US shale oil production, which resulted in reductions of 25 percent in oil prices during 2014 and 2015. However, it also resulted in an increase in profit margins thanks to lowered costs of transportation, raw materials, and food.

These forecasts in mind, no one knows what geopolitical events or domestic politics could impact how these various economic factors moving forward, and therefore every forecast should be considered with a grain of salt.


Money saving tips for 2018

Americans, on average, are not terribly adept at saving money on, and there are several steps that one can take to break away from this trend.

Here are a few tips that can help toward your money saving goals in 2018.


Set A Goal

Setting a goal is imperative. Those who aim at nothing will hit it every time. On the other hand, those who set an achievable goal are more likely to reach it. Absurd goals like saving $1 million in a month are not helpful, though.


Choose An Account That Pays

There are checking accounts that do little in terms of bringing in additional income. Dollars can work for their owners to bring more dollars in through compounded interest. Therefore, it’s important to choose a savings account that pays out a decent amount of interest while charging no fees.


Make Saving Automatic

Setting up a direct deposit from a paycheck or an automatic transfer from a checking account will make it more likely that some money will actually get saved each month. Just make sure that there is money available to make the transfer. Otherwise, overdraft penalties could ensue.


Track Spending And Set Up A Budget

It’s important to know where money goes on a monthly basis. There are some pretty impressive web-based budgeting tools like Personal Capital and Mint that allow users to see where every dollar goes. Setting up a budget can also ensure that bills are paid. Paying one’s self first is the key to saving money over time.


Set Up An Emergency Fund

A lack of an emergency fund can make getting into debt more likely. Those who have a car break down without an emergency fund will be likely to put the charge on a credit card that requires interest payments. Every dollar that goes to interest is a dollar that cannot go to savings. Start with an emergency fund of $1,000 and then work up to three to six months of living expenses.


Take Advantage Of Shopping Apps

Apps like Ibotta and Ebates provide rebates on purchases. These rebates are basically cash in the pocket. Any money that gets saved should go toward long-term savings goals.


Assess Progress

It’s a good idea to regularly track the process toward savings goals. This can be as simple as looking into the account online or setting up a chart with goals that can be marked off once achieved. Regardless, saving for emergencies and for the future is a great idea that can pay off in the long run.

Prepare for 2018 with these year-end tax planning tips

With 2018 right around the corner, many taxpayers have started to consider how they will form their year-end tax plans. There are a variety of crucial focal points that should be taken into consideration when planning taxes for the new year; some are timeless while others are specifically relevant in the context of the 2017-18 transition.

Here are a few helpful tips for effective year-end tax planning.

Take RMDs

Required Minimum Distributions (RMDs) are a significant factor in many people’s year-end tax planning, but they are also occasionally overlooked. RMDs refer to “the amount that traditional, SEP or SIMPLE IRA owners and qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70.5.” These amounts are then distributed each subsequent year based on current calculation amounts.

There is a heavy penalty (usually in the realm of a 50% tax penalty) for failing to take required RMDs, so make sure you are keeping tabs on this information as you conceptualize your year-end tax plan.


Defer income

Deferring certain income is consistently regarded as a wise year-end tax planning technique — depending on your situation. Income is taxed in the year it is received, so this method’s benefits are clear when applicable. While it is usually hard to defer wage and salary income, you may be able to defer year-end bonuses, assuming it is standard practice in your place of employment.

If you think you will sit in the same or a similar tax bracket during the new year, deferment may be an effective planning strategy for you (otherwise, you may run the risk of being hit with a bigger tax bill in the new year).


Take advantage of losing investments

“Loss harvesting” is a key year-end tax strategy in which one sells significant investments (perhaps on stocks and mutual funds) to identify losses. These sellers then use losses to “offset any taxable gains they have realized during the year,” offsetting gains dollar-for-dollar. If losses represent amounts more than gains, you can utilize up to $3,000 of excess loss to eliminate other income.


Pay medical expenses

Be sure to pay off outstanding medical expenses using pre-tax dollars, using Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs). All other funds can accumulate as retirement savings. This strategy is especially urgent and fruitful, as most FSAs follow a “use it or lose it” system where funds are unable to roll over annually.


Budgeting for the holidays

The average American spends roughly $700 dollars on holiday shopping, and this translates to a national average of nearly $465 billion. This number is staggering, but it is not too surprising. The holidays make up arguably the biggest shopping period of the year, and despite a variety of special sales and discounts, the spending rarely slows down as procrastination and lengthy Christmas lists work against us.

These notions might make the idea of holiday budgeting seem impossible — even outlandish, but in reality there are several ways you can keep your spending on a leash while buying your friends and loved ones the gifts they desire.

Here are some quick tips for holiday shopping on a budget.


Plan in advance

Procrastination is easy to succumb to during the holiday season, but it is crucial to plan your gift shopping in advance. Make a list of your friends and loved ones that you plan to purchase gifts for, including potential ideas and a rough product of their projected prices (perhaps factoring in potential sales on these items). Next, set price limits based on this information, and assign limits to each individual on your list. This approach will ensure you are completely organized before the madness of last-minute shopping goes into full swing.


Plan for each store

Holiday shopping across multiple outlets can be incredibly hectic — especially in the throes of Black Friday. Therefore, it is wise to make an individual plan for each store you plan to visit. This step is a natural extension of the previous section; extract potential gift ideas from your initial list and determine where you will plan to purchase them. Next, research each store to figure out if there will be any notable sales or discounts impacting these items. This information will narrow your spending projections all while guaranteeing a more pleasant and orderly shopping experience.


Leverage coupons
Most price-cognizant shoppers are aware of one thing: coupons are your friends. There are countless department stores that send out holiday-based flyers containing valuable coupons, some of which may save you a few dollars on a coveted gift idea. Other coupons can usually be found at mall front offices. The latter is especially true of Black Friday shopping, but many malls offer such coupons during the entire holiday season. Either way, save all coupons that may seem even a little bit relevant to your holiday shopping; you have nothing to lose and much to save.

Personal finance tips: 2017-2018


Personal finance encapsulates a long list of sub-skills and habits aimed at smarter and more efficient money management. These practices have always been regarded as healthy en route to a generally better quality of life, but they are arguably now more important than ever in face of progressive new societal standards and norms — especially those pertaining to the growth of technology and the shifting of many market paradigms.

Here are a few crucial personal finance tips as we grow closer to the start of 2018.


Be smart — be frugal

Ask any high-profile billionaire to reveal his or her secrets to financial success and they will probably point to one key trait: frugality. While it is important to live your life and enjoy yourself now and then, it is also wise to keep your spending on a tight leash when pursuing better financial stability. As famed billionaire/investor Warren Buffet once observed: “success is really doing what you love and doing it well. It’s as simple as that. Really getting to do what you love to do everyday — that’s really the ultimate luxury … your standard of living is not equal to your cost of living.”


Keep retirement in mind

Proper retirement preparation is a timelessly relevant asset to your personal finance. Be sure to keep yourself focused on the future as you accrue more and more tenure within your position, keeping in mind recent surges in equity values and impending bond allocation. Laying a strong retirement foundation will serve as the ultimate return on investment during the latter stages of your life.


Take debt seriously

Like most people, you have likely garnered a fair amount of debt (or debts) during your financial experiences. It can be easy to view these debts with a hierarchical mindset, putting certain ones ahead of other in terms of their importance or urgency. This mindset is not necessarily damaging, but be sure to keep it in check — do not let low hanging fruit debts fall on the wayside, or you will risk forgetting about them and allowing them to haunt you for years to come. Pay down your debts as soon as possible, especially those attached to credit card transactions, and keep the future in mind as your main justification for doing so; this will help you combat procrastination.



If you find any of the aforementioned practices difficult to execute or hard to approach, communicate with those who have a better understanding of them. Whether this person is a loved one, a paid professional, or a simple acquaintance, the comradery of mutual experience will be enough to keep your head on straight. Absorb all the information you can and remember that you are not alone in your personal finance endeavors.

Budgeting advice for new homeowners



Buying a new home can be equal parts exciting and terrifying, depending on your unique situation. With regards to the latter, budgeting for your new home typically stands as one of the most stressful aspects of new homeownership. You may find yourself faced with a whole new list of expenses and other financial considerations that had never affected you in previous living scenarios.

To help ease your nerves, here are a few quick, yet crucial budgeting tips to enact in new home ownership.


Avoid overspending

Frugality can be your best friend when working to cut down on financial stress. This approach should be at the center of your first few months of home ownership. Avoid overspending on utility items and furniture, opting for items that strike a healthy balance between what is affordable and what is substantial in quality. You do not necessarily have to be cheap 24/7, but make sure to exercise financial restraint whenever possible.


Lay out expenses

Owning a home entails having to oversee a long list of regular expenses, ranging from the obvious (electric bills, real estate taxes) to the seemingly minuscule and unexpected (exterminator fees, appliance replacements). On an at least semi-regular basis, sit down and compile a list of any immediate and/or upcoming expenses that will need to be addressed down the line. Keeping yourself organized in this manner will be an asset to other parts of your budgeting plan, as it will allow you to compartmentalize your available funds and allocate them in a way that is both smart and effective.


Meal budgeting

The kitchen alone stands as a great, and maybe unexpected place to mend holes in your budgeting plan. New homeownership teaches you the cost of groceries quite fast — a routine trip to the supermarket should reveal this notion — and as a result, it is wise to combat meal costs through careful planning and other exercises in foresight. Plot a schedule for meals throughout the week, basing each meal’s costs on an overall figure dedicated solely to food. Additionally, just like the appliances and furniture items, foods run a gamut in terms of prices, and you should err on the side of lower costs in this regard as well. Just like the former, you will want to find a happy medium between quality and affordability — you do not have to deprive yourself of nutrition, but you can also find quality foods in price-friendly packages if you look hard enough.


Social media’s relationship with economics



Social media and economics may seem like totally different worlds on the surface, but they share one important characteristic: they are ever-changing in their impact on a society. Regardless of the system in question, a state’s economic infrastructure is layered in its relevance and ability to keep that state functional, and now, social media outlets — through their own rise in relevance — have given many nations a new and innovative way to manage, stabilize, and drive economic activity.

Here are a few ways social media are making an impact on economics.


Influencing growth

The relationship between social media and economics is not just one of mutual relevance, but mutual growth as well. In recent years, social media activity has been linked to a spike in both economic output and income — social media use has risen alongside local incomes, reflecting those areas’ overall level of economic development.


Reflecting progression

However, the aforementioned simultaneous growth is likely more than just a strange coincidence; it is also a reflection of progressive, up-and-coming thinking enacted in these societies. Naturally, social media use is much more prevalent in areas embracing high-tech innovation and and the trending industries that have crafted it. Social outlets are growing and self-innovating on a seemingly annual basis, and this notion is a microcosm of the technological open mindedness exemplified in the world’s most tech-conscious nations.

Additionally, social media activity has been linked to frequent instances of human capital, or “the stock of knowledge, habits, and social and personality attributes.” These high-capital areas were found to contain much higher levels of bachelors-and-up educational experience.


What does this mean?

These correlations, while loose in certain regards, generally and undeniably associate increased social media use with skillsets and approaches ideal for economic growth. Many aspects of the economic process have been streamlined thanks to information-based democratization, for example, giving a variety of new companies a better chance of gaining a niche in the market — subsequently leading to an increase in economic fortification, whether the economy in question is large in scale or modest and associated with a small community.

A thriving economy is typically spearheaded by capable and outgoing thought leaders, after all, and the modern technological landscape is perhaps the biggest challenge yet to our ideological comfort zones. Therefore, it is not surprising that the embracing of this new and constantly evolving concept has been noted in areas of strong economic growth and stability.

Four economic systems: mixed economics


Most successful, thriving societies hinge on the presence of a functional economic system. Economics allow these societies to study and manage various social and financial variables, ultimately resulting in a better understanding of their overall productivity and stability.

Here, I take a look at one of the four main economic systems: mixed economics.

Mixed economics

As many would likely guess, mixed economics is a hybridized economic ideology combining characteristics of both capitalism and socialism. A mixed system is hard to pin down in terms of an end-all/be-all definition, but it generally focuses primarily on providing both economic freedom — in terms capital and private property — but also emphasizes government intervention, when necessary, to “achieve social aims.” These systems tend to be less efficient than economies rooted in a free market approach, but those in favor of them would argue that they blend the strongest elements of two established ideologies, producing a way of life that is comfortably in the middle of two extremes.

What makes it unique?

In addition to a noted lack of efficiency compared to free market economies, mixed economies are unique for their approach to trade protection, subsidies, targeted tax credits, fiscal stimulus, and public-private partnerships, which all stand as key examples of government intervention that is involved enough to be progressive at a societal level, but also not intrusive enough to mirror aspects of a command economy.

Mixed economies are occasionally mistaken for socialist societies, but socialism usually tends to implement more of a social approach to its means of production; it also does not go to socialist extremes in terms of price fixing, income redistribution and intense trade restrictions.


What are some examples?

Technically speaking, the United States is a mixed economy by definition since it is comprised of both government- and state-owned entities. For example, US Amish communities continue to practice their own isolated form of economics conforming to their unique lifestyle choice, but other parts of the country are susceptible to government intervention. The US also fits the mold via elements “such as protection for agriculture and manufacturing by through trade restrictions and subsidies.” Other examples of mixed economies, in this regard, include France and Cuba.

Four economic systems: command economics


Most successful, thriving societies hinge on the presence of a functional economic system. Economics allow these societies to study and manage various social and financial variables, ultimately resulting in a better understanding of their overall productivity and stability.

Here, I take a look at one of the four main economic systems: command economics.

Command economics

Like traditional economics, command economics holds a mostly self-explanatory name; it is a system that is defined by a dominant centralized power, usually the government, that commands most of a society’s economic activity. This power, in lieu of a free market, “determines what goods should be produced, how much should be produced, and the price at which the goods are offered for sale,” making it a much more straightforward system due to a lack of democratized decision making.


What makes it unique?

Command economies distinguish themselves from the other economic systems by placing invisible constraints — based on supply and demand — on goods to determine their overall value. As Investopedia points out, “a central tenet of a free-market economy is that the government does not intervene in the workings of the market by setting prices, limiting production or hampering competition within the private sector.” A command economy, however, does not entail competition at all; the government simply controls everything from the start.

Societies with access to a wide range of resources are especially susceptible to adopting a command economy, as these societies tend to fall back on government regulation to manage these widespread resources in an organized manner. Though, this approach tends to favor those resources that stand as the most important (gold, oil, etc.) and leave smaller focal points such as agriculture to mostly citizen-based management.


What are some examples?
Naturally, command-based economics have been and are prevalent in many communist societies such as Cuba, North Korea, and the former Soviet Union, where singular government control has been or is currently a definitive part of economic and societal functionality. These societies argue command economics’ efficiency, stating that it helps to better allocate resources and ultimately boost social welfare and open new doors for potential employment. Critics of these societies, on the other hand, would counter that command economies are “unable to efficiently allocate goods because of the knowledge problem, or the central planner’s inability to discern how much of a good should be produced” due to periodic shortages and surpluses.

The Four Economic Systems: Market Economics



There are four main types of economic systems in the world: Traditional, command, market, and mixed.  Each one of these offers its own unique set of pros and cons, sub-economies and tendencies, and plenty more.

Earlier, I took a look at traditional economics, but here I’ll be discussing yet another: market economics.


Market Economics

A market economy is very similar to a free market.  The government doesn’t control any vital resources, valuable goods, or any other major economic segment.  Rather, the economy is run by organizations run by the people.

Ultimately, there’s no such thing as a truly free market economy.  Let’s take a look at America: while it’s a capitalist nation, our government still regulates (or, in many instances, attempts to) things such as fair trade, monopolies, government programs, and moral businesses.  




You have an explosive company that is not only relatively safe, but also very well-controlled.  This is in contrast to socialism, in which the government controls and owns the most profitable and vital industries, yet allows the rest of the market to operate freely.  

However, the arguably biggest advantage to a market economy outside of economic benefits is the separation of the market and the government.  This helps prevent the government from becoming too powerful, controlling, and similar to the governments of the world that oppress and exploit their people.  Take a look at America, where a separation of market and state has played a large part in our economic success.  



The main disadvantage of a market economy is a noted disparity in wealth and mobility.  Since wealth tends to generate more wealth, it’s very easy for the rich in a market economy to get richer while the poor get poorer.  And with no government regulations in place, the situation is hard to remedy.  

Often, government regulations get in the way of profit for large businesses.  While a lack of profit is hardly ideal, many of these regulations are set in the first place for a reason.  For example, health and safety regulations are meant to improve working conditions, while other government regulations are set to minimize environmental damage.  


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