You are here: HomeEconomyCommentary

Commentary

A citizens' taxpayer watchdog group is urging President Obama and the Department of Defense to halt funding on the manufacture of an aircraft engine that would replace the Pratt and Whitney version presently being used in the DOD’s massive Joint Strike Fighter aircraft project. The new engine would be manufactured by General Electric and Rolls Royce.

As world food prices continue to approach crisis levels, and global demand continues to increase, one international organization, The World Economic Forum, warns of possible “social and political instability.” In particular, the cost of corn and soybeans has skyrocketed to the highest they’ve been since July 2008, and experts predict the costs will continue to edge upward.

Keeping in mind that the “beige book” report from the Federal Reserve yesterday is only a compilation of anecdotal reports from businesses across the country, any conclusions in that report that the economy “continued to expand moderately,” and that it “continued to improve, on balance,” should be viewed with extreme caution. For buried in the report were the comments that “the housing sector remains a significant drag on the economy" and that "activity in residential real estate and new home construction remained slow across all Districts.”

With the announcement by Reuters that former Federal Reserve Chairman Paul Volcker was going to resign shortly from the Obama administration came the temptation to reminisce about Volcker’s influence during the late '70s and early '80s when inflation exceeded 13 percent and interest rates on short-term government Treasury bills hit 21.5 percent.

The United States' current corporate tax rate is far from competitive. Average combined state and federal corporate taxes are 39.2 percent, second highest among industrialized nations, just under Japan's 39.5 percent rate. But this positioning is about to change. On December 16, 2010, Prime Minister Naoto Kan approved a five percent cut on Japan's corporate tax, lowering the rate to under 35 percent.
Sign up for The New American daily highlights