Calculated Risk

The Great Recession has prompted many consumers to say that they want to buy more American-made products, and rely less on imports.

One of the best things they could do to reduce our trade deficit is turn off their engines.

To understand why, take a look at the chart above, which comes courtesy of the blog Calculated Risk.

The blue line shows the total trade deficit, which stood at around $43.7 billion in April, according to government data released this week.

That red line? That’s what the trade deficit would be if we weren’t importing all that pricey petroleum. In April, the trade deficit not counting petroleum imports was at about $17.6 billion.

Although Gen Y-ers’ reputation for lacking financial savvy is nothing new, this recent report will make some parents shake their heads and wonder where they went wrong.

According to researchers at Ohio State University, young adults feel empowered by their credit card and education debts. Yes, empowered.

The more credit card and college loan debt 18 to 27-year-olds had, the more they felt like they were in control of their lives. Ironically, this is the generation that is expected to deal with an increasingly growing 14 trillion dollar debt.

Researchers examined data on college loans and total credit-card debt and then studied how these debts related to consumers’ self-esteem and sense of mastery.

Those in the lowest economic class felt the most in control of their lives in proportion to a greater amount of debt they held. Researchers didn’t find any impact on middle class participants’ self-esteems by holding educational debt, but they did receive an ego boost from holding more credit card debt. Those who were raised in more affluent families showed no effects from holding debt.

Finally when participants passed the age of 28, they began to feel the stress of their debt.

The study’s lead author Rachel Dwyer said, "By age 28, they may be realizing that they overestimated how much money they were going to earn in their jobs. When they took out the loans, they may have thought they would pay off their debts easily, and it is turning out that it is not as easy as they had hoped," Science Daily reported.

TODAY Money's Allison Linn live chatted Wednesday about home finance and had readers share their tips for saving in tight times.

Here are two questions from her chat and the complete archive:

Linda: What are your suggestions for teaching young kids about money?

Allison: Great question. There are lots of different philosophies about teaching kids about money, and you really need to decide what is right for your family when it comes to things like allowances, summer jobs, etc. But I think the most important thing you can do to teach your kids about money is model good financial behavior.

If you show your kids that you are careful about making big ticket purchases, or talk to them about the price of off-season produce at the grocery store, those lessons will stick.

Bob C.: I read your story about outfits like Groupon. You seemed a bit lukewarm on them. But don't they save you money?

Allison: From what I've seen and heard from readers, Groupon-type coupons can really save you money if you were already planning to go to that restaurant or really wanted to try that skydiving excursion. Where you can get in trouble is if you spend $100 on $200 worth of yoga - but find out after one class you hate yoga. You should also make sure you know the rules of the coupon.

Center for Economic and Policy Research

Unemployment rate change by country. The OECD uses a "harmonized" unemployment measure because not all countries measure unemployment in the same way.

We all know what happened in the United States during the Great Recession:  Millions of Americans lost their jobs, the unemployment rate skyrocketed and we’re still suffering the consequences.

Here’s something that’s less well known: In Germany between 2007 and 2009, the opposite happened and the unemployment rate actually fell, according to a report released last week by the Center for Economic and Policy Research, a liberal-leaning economic think tank.

Germany’s economy, which is heavily dependent on world trade, did suffer during the recession, said John Schmitt, an economist with the CEPR who prepared the report.  What differed was how the two countries responded to that economic weakness.

In the United States, most employers cut jobs. In Germany, they cut hours.

“There was widespread shift from full-time to fewer hours,” Schmitt said.

Germany has a much more highly unionized workforce than the United States, and some of those cutbacks came from negotiating over things like overtime and work hours, Schmitt said. Strong employee protections also made it more costly for some companies to lay off workers than to reduce hours, the report noted.

But Schmitt said another difference was that when employers cut back on hours, the government provided those employees with partial unemployment benefits. That compensated somewhat for the smaller paychecks, leaving consumers less cash-strapped than in the United States.

In the U.S., some employers reduced their workers’ hours, and there are currently about 8 million Americans who are working part-time but would like to be working full-time.

It was far more typical for employers to cut jobs completely when work slowed, and there are still 14 million unemployed Americans. The employment situation has left many Americans tight on cash and unwilling to spend freely, hampering the economic recovery further.

Schmitt said there are some states that allow workers to collect partial unemployment if their hours are cut back, but few Americans actually use it.

If you thought the federal deficit was an inconceivable amount of money, wait until you hear what the government actually owes.

USA TODAY reports that the government added $5.3 trillion to its financial obligations last year. This brings the total of unfunded obligations, the gap between spending commitments and revenue, to a record $61.6 trillion, or $534,000 per household.

The added commitments were taken on to mostly fund programs like Medicare and Social Security.

"The (federal) debt only tells us what the government owes to the public. It doesn't take into account what's owed to seniors, veterans and retired employees," Sheila Weinberg, founder of the Institute for Truth in Accounting, a Chicago-based group that advocates better financial reporting, told the newspaper.

The $61.6 trillion represents more than one-third of the market value of all the goods and services produced in the United States.

Republicans and Democrats are currently debating whether to raise the country’s $14.3 trillion debt ceiling.  President Obama is leading the fight to raise taxes on wealthier Americans to help fund the county’s entitlement programs. But Republicans are pushing for deeper, long-term spending reductions.

In a meeting between the two parties yesterday, House Speaker John Boehner said, “’It is time to start talking about trillions’ of dollars in cuts,” Reuters reported.

Kellogg's

We’d be shocked, but then we haven’t eaten the stuff for years either.

Our partners at 24/7 Wall St. wanted to chew on the numbers of why Americans are eating less cereal. Certainly it’s a cheap breakfast option (turgid and required “most important meal of the blah” mention duly done) and these are cheap times. What they found was six iconic brands that they term “Americans no longer love.”

We’ll spare you the suspense: Kellogg’s (the largest breakfast cereal producer) Special K had the dubious distinction of topping the list with sales off 15.9 percent from 2007 to 2010. Even Raisin Bran made the list (in our younger years we were partial to it if Grape Nuts weren’t around, even if mom repeatedly pointed out the amount of sugar we were adding probably negated any possible health value).

24/7 noted increasing restrictions on the ability of the cereal companies to market to children may be hurting sales, as is the rise of store brands, and the overall trend of Americans looking for healthy options. They also point out, “much to the horror of nutritionists, the popularity of egg-based breakfast sandwiches is surging.” We’d point at the nearest McMuffin-eater and laugh, but then, hey, we eat hashbrowns from the corporate cafeteria. What do we know?

Another interesting point: The country’s largest milk processor and distributor says the trend is dragging down milk sales.

What was your favorite brand of cereal in your youth and do you still eat the stuff now?

Anika Anand writes: There may be reason for teens to be optimistic about the summer job market, despite all the gloomy predictions of young people spending their summer playing video games in the basement all day, according to a new report by outplacement firm Challenger, Gray and Christmas.

The number of 16- to 19-year-olds who were employed in May increased by 71,000 from the previous month, according to the most recent non-seasonally adjusted data from the Bureau of Labor Statistics. That compares to an increase of just 6,000 jobs added from April to May of last year.

Although the number of jobs added in May is significantly less than the 125,000 new teen jobs that have been added in May, on average, over the past 10 years, the early bump could be enough to boost confidence that more teens than expected will land a job in June.

But even if there is a bump in June’s job numbers, we may still be playing catch-up. About 4,177,000 teens were employed in May, according to the non-seasonally adjusted BLS numbers. That compares to 4,336,000 who were employed at the same time last year. 

Nearly one in four teens who wants a job doesn’t have one, according to the BLS. This summer teens will have to compete with out-of-work adults whose jobs are increasingly threatened by the recession.

Teen employment is the lowest it has been since the end of World War II, according to research from the Center for Labor Market Studies at Northern University.

India is often described as a country that has more cell phones than toilets. So it's refreshing to hear that inhabitants of the world's second-most populous nation, this year’s host of World Environmental Day, are beginning to show an interest in the environmental health of the planet.

Danish Siddiqui / Reuters

A boy drinks water out of a broken pipeline in a slum in Mumbai last month.

A new Gallup poll finds that 45 percent of Indian adults believe protecting the environment should be prioritized over the economy, even if that risks curbing economic growth. The poll found that 35 percent of Indians believe the economy should be the priority, even at the risk of harming the environment.

Ironically, Indians are making a greener environment more of a priority just as Americans are reversing priorities after being battered by the deepest recession of the postwar era followed by a sluggish recovery.

A similar Gallup poll released in March found that 54 percent of Americans think economic growth should be given priority over environmental protection, while 36 percent thought the environment should be given the top priority. That reversed a decades-old trend that had been mostly intact since the 1980s, if not longer.

Of those Indians who are “finding it very difficult to get by on their household incomes,” 39 percent say the economy should be the priority, while 29 percent favor the environment and 23 percent don’t have any opinion. Seems like it may be easier to care about the environment when you know where your next meal is coming from.

EBRI

The unemployment report released Friday reaffirms the notion that most Americans likely can’t afford to be picky when deciding to take a job.

But if your goal is to get health insurance along with a paycheck, it pays to at least narrow down the profession you search in.

A report released this week from by the Employee Benefit Research Institute shows that the recession has taken a toll on Americans’ overall ability to get health insurance through their job. The total percentage of Americans under age 65 who receive health insurance through a workplace fell to 59 percent in 2009, and has been declining steadily since 2000.

But not all occupations are created equal when it comes to getting a paycheck and health care coverage. Not surprisingly, people who work in managerial and professional jobs are most likely to have health care coverage from their employer, while those in farming or fishing occupations are least likely to have that benefit.

Chuck Burton / AP

It's National Doughnut Day, and to help you get in the spirit, Dunkin' Donuts and Krispy Kreme are offering free doughnuts. At Krispy, all you need is to bring your hungry self in for for one free doughnut, and no purchase is neccessary. At Dunkin', you'll need to buy a coffee to get your sweet iced dough. Some are saying that not all Dunkin Donuts shops are participating, so be sure to find out what the deal is at the counter.

Hope this will make your Friday a little sweeter! Tell us, what's your favorite kind of doughnut?

Getty Images stock

Our friends over at WalletPop did an enviable experiment recently: They compared the cost of homemade versus store-bought ice cream.

The verdict: If you eat a lot of ice cream, and use pretty basic ingredients, you may be able to get a better deal by going the homemade route. But if you're not an ice cream fanatic, or only crave the tasty treat in the summer, you may be better off just shelling out for a pint of Ben & Jerry's or Haagen-Dazswhen the mood strikes you.

Check out WalletPop's full report and methodology here. 

Do you prefer working the graveyard shift, or look for jobs that allow you to work overnights for personal or professional reasons? If so, we want to hear from you for an upcoming story. Please click here to tell us what you do, and why you prefer to work at night.

Here's a Catch-22 of the weak economy: You finally land that job you need desperately, only to find that you can't sell your home to move. CNBC reported Wednesday that many Americans are finding themselves stuck in their homes or forced to rent instead of sell.

CNBC's Sharon Epperson joined TODAY for a live web chat Wednesday morning following her Money 911 appearance. Here are two questions from her chat and the complete archive:

Question from Tracy B:
When speaking of an "emergency fund", where is the best place to keep that fund? Standard basic savings? CD? Money market savings? Home safe?

Sharon Epperson's answer:
I think the best place to keep your emergency fund is in a high-yield savings account. You can do this at a traditional bank, but the most competitive rates are usually with an online bank. Check out the best rates at www.bankrate.com

Question from Jennifer R:
What sort of financial milestones would you suggest be met before a couple buys a home?

Sharon Epperson's answer:
Before you buy a home, you have to make sure that you can AFFORD that home. That means having enough money in savings for the downpayment – ideally 20 percent of the purchase price, so that you don't to pay PMI (private mortgage insurance). That also means having enough to pay for home insurance, property taxes, utilities and other household maintenance costs. Ideally, you figure out the monthly total for all of these expenses and save that amount in your "new home fund" for a few months – just to make sure you can truly afford it.

Watch Sharon Epperson on CNBC starting at 9 a.m. ET and follow her on Twitter.

If you have a question for our TODAY Money experts, submit it here.

To sign up for an e-mail reminder for our next chat, click here.

Watch this week's Money 911 segment:

Reuters

While many of us were still pinching our pennies as a result of the recent recession, some lucky folks were becoming newly minted millionaires.

A new report from The Boston Consulting Group finds that the number of millionaire households worldwide increased by 12.2 percent in 2010, to 12.5 million.

Although those millionaires represent just 0.9 percent of all households, they control about 39 percent of all global wealth, according to the report. That’s up from 37 percent in 2009.

The general rise in global wealth can largely be attributed to last year’s strong rebound in the financial markets 

The United States has the most millionaires of any country, with an estimated 5.2 million households holding assets into the seven figures. But your chances of being a millionaire are better in Singapore, where the report says 15.5 percent of all households have at least $1 million.

The Boston Consulting Group defines millionaires as having $1 million in cash and investments, excluding things like houses, cars and investments in a business.

Tip of hat to The Wall Street Journal, which first reported the story.