The dire economic straits of the nation have prompted progressives to call for increased taxes, a measure they believe can help offset the deficits at the state and national level. However, when one examines the fiscally troubled states of California and New Jersey, it becomes evident that higher taxes would do little to assuage the problem.
The conflicting news reports on the housing market can give the casual observer a headache: “December Sales of U.S. Existing Homes Jump to 7-Month High,” shouts Bloomberg. “Housing Starts Decline, [but] Building Permits Rise,” exults the National Association of Home Builders (NAHB). Google news drearily reports that "2010 Ends as 2nd Worst Year for Home Builders," while CNNMoney.com warns that “Shadow Inventory Threatens Housing Recovery.”
In light of the U.S. dollar’s continual loss of purchasing power and the historical stability of precious metals as a store of value, a new bill set to be considered in the Utah legislature would require the state government to accept taxes and pay its obligations in gold or silver upon demand.
In a stark illustration of the economic fears still plaguing America, a resolution was introduced in the Virginia legislature on January 12 that would create a subcommittee to officially consider the adoption of an alternative currency in case of a total breakdown of the U.S. dollar and the Federal Reserve System.
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.
When Bloomberg polled so-called real estate “experts” about the housing market, they expected a slight pull-back in housing prices of perhaps 0.2 percent when compared to a year ago. Instead, the Case-Shiller Index showed prices dropped four times greater than expected: “The biggest year-over-year decline since December 2009,” according to the group.
Despite their huge numbers and cultural and financial impact on the economy, the Baby Boomers (born between 1946 and 1964) have largely been unwilling to face fiscal reality. Robert Samuelson, a frequent writer for Newsweek, noted back in 2007 that “We [he is a Boomer] are trying to pillage our children and grandchildren, putting the country’s future at risk in the process. On one of the great issues of our time, the costs of our retirement, we have adopted a policy of selfish silence.”