The anti-tax foundation Americans for Tax Reform has labeled the end of the Bush-era tax cuts that are scheduled to expire at the end of this year — in conjunction with the start of new taxes, such as those brought on by ObamaCare mandates — "Taxmageddon," but would the tax increases built into the law by Congress actually be a catastrophe for the economy, keeping in mind that automatic spending cuts are set to begin as well?
To hurdle the federal government’s looming “fiscal cliff,” Congress and the president must enact a combination of higher taxes and spending cuts, says a group of business economists.
Due in large part to an explosion of government spending and less secure property rights, the United States plunged to its lowest ever ranking on the Economic Freedom of the World report, dropping from second place out of 144 nations in 2000 to a humiliating 18th in this year’s annual survey. The global average scores, meanwhile, actually increased slightly.
The Federal Reserve has announced that it would begin yet another round of quantitative easing, a maneuver that has caused the independent and nationally recognized statistical rating organization Egan-Jones to lower the U.S. government to “AA-“ from “AA.” Egan-Jones specifically cited the third round of quantitative easing from the Federal Reserve, indicating it would hurt the U.S. economy and the nation’s credit quality.
As the real unemployment rate hovers around 19 percent, with more Americans dropping out of the labor force and others being forced to take low-paying, part-time jobs, job creation continues to move at a painfully slow pace. And while a number of lawmakers have proposed a variety of approaches to stimulate job growth, most seem to ignore the fact that a major inhibiter to job growth is the abundance of federal regulations, which have increased dramatically under this administration. According to CNS News, the Code of Federal Regulations has increased by 11,327 pages in just the last three years.
While a record number of Americans are not currently in the labor force, according to the Department of Labor, unemployment for government workers drops to 5.1 percent, the lowest among all industries.
The United States dropped in the Global Competitiveness Index ranking for the fourth year in a row because of exploding debt and deficits even as liberty-minded Switzerland maintained its top spot, according to an annual survey published by the World Economic Forum (WEF). Having placed fifth last year and first in 2008 before Obama assumed power, the U.S. economy continued its downward spiral, slipping to an embarrassing seventh place in the most recent 2012-2013 rankings. Even Sweden, famous for its massive government and high taxes, ranks higher than America.
According to the WEF survey, the American economy’s sharp decline in recent years is due to, among other problems, a lack of trust in government and politicians — especially by businesses — as well as declining macroeconomic and political stability. More important to the latest drop in the rankings this year, however: increasing fears over the U.S. economy’s fiscal health as the federal government continues to borrow more than a trillion dollars per year with no end in sight.
GOP presidential contender Mitt Romney has announced that he would not reappoint Federal Reserve Chairman Ben Bernanke to a third term, but indicated he has not yet considered a replacement for him. However, Romney's top economic adviser, Glenn Hubbard, has stated that he believes Bernanke should be considered for a third term.
The Congressional Budget Office released its economic analysis for 2013 in its annual summer budget update on Wednesday, reporting, “The sharp increases in federal taxes and reductions in federal spending that are scheduled under current law to begin in calendar year 2013 are likely to interrupt the recent economic progress.” While some experts predict that the impact will be less dire than projected and are more focused on the deficit and interest rates, lawmakers are butting heads over just how to prevent the dramatic economic shift predicted by the CBO.
As American lawmakers debate reining in, auditing, reforming, or even abolishing the controversial Federal Reserve System following a growing wave of bipartisan outrage over its bailouts and wild currency printing, discredited U.S. central bank boss Ben Bernanke is actually urging Europe to create a centralized fiscal authority to be more like the United States. But the process is actually already well underway.
Apparently the Fed boss believes further concentration of power in the hands of the unelected European bureaucrats — largely responsible for the current crisis — would somehow help quell the region’s ongoing economic turmoil. Free market advocates, however, have argued that the exact opposite is true: For Europe to properly deal with the crisis, it should get governments — and especially the emerging European Union super-state — completely out of the way.
As concerns over the U.S. dollar and the Federal Reserve continue to grow, U.S. lawmakers explored sound money, competing currencies, and the route to monetary freedom during an August 2 hearing chaired by Rep. Ron Paul (R-Texas). It was the final House Domestic Monetary Policy Subcommittee hearing led by the long-time champion of honest currency and reining in the controversial Fed, but analysts say the impact of Rep. Paul’s work is only just starting to be felt.