A Choking Trade Deficit - "Rising fuel prices and surging imports are drying up demand for U.S.-made goods and services, destroying jobs and plunging the economy into an even deeper downturn." In a commentary on Forbes.com (7/10/08, Morici), the trade deficit on petroleum products, automobiles and their parts, as well as an undervalued Chinese currency has found Americans spending less money. This is compounded by the fact that more than 438,000 jobs have been eliminated since December. It is no wonder that the economy is looking dismal.
Is Canada’s Economy a Model for America? - This article explores the differences inCanada’s and America’s economies, as well as, health care systems, immigration, employment, unionization, and taxation. It was written by Mark Steyn and published in Imprimis, a publication of Hillsdale College.
Restoring Manufacturing Jobs will Fix Economy
The Detroit Free Press (1/16/08, Navarro) reports that the “most productive, literally, anti-recession tool would be to restore America’s competitive manufacturing edge.”
Feverishly cutting interest rates and opening up credit debases our currency, and an emergency tax cut will “exacerbate an already chronic federal budget deficit”. “To restore America's manufacturing might and fight the current recession, we need well-funded education reforms to provide the skilled workers needed for American industry of the future.
We also need precisely targeted tax policies that enhance growth and encourage productivity; cost-cutting reforms that bring health care, legal and regulatory costs down; a national energy policy that ensures plentiful and inexpensive energy; technology policies that enhance the U.S. lead in R&D and innovation; and worker skill-enhancing initiatives to put people back to work.” “Ultimately, however, any lasting solution must also include a national strategy to level the manufacturing playing field.”
Bernanke Supports Measures to Stimulate the Economy
The New York Times (1/17/08, Andrews and Herszenhorn) reported that chairman of the Federal Reserve, Ben S. Bernanke, "can support tax cuts or spending measures to stimulate the economy, even if they increase the budget deficit, provided the measures are quick and temporary." "Faced with growing evidence that the economy is slipping into a recession, Congressional Democrats and President Bush are trying to come up with a package that would put more money in Americans' hands within the next few months."
R&D Tax Credit Expires
Eweek (1/3/08, Mark) reports that Congress allowed the research and development tax credit to expire by failing to renew it prior to the holiday recess. "It was a huge disappointment and that's a fairly vast understatement," said Bartlett Cleland, senior director of tax policy for the ITAA (Information Technology Association of America). The tax credit extension had been "part of a package of 13 tax breaks for individuals and 18 for businesses included in a bill approved by the House Nov. 9.”
IEA Urges Countries to Conserve Fuel and Focus on Alternative Energies
The Financial Times (1/4/08, Crooks and Blas) reports that due to high oil costs, the International Energy Agency (IEA) “reminds consuming countries of the need to improve fuel efficiency.” Crude oil prices hit an all-time high of $100.09 a barrel. “The IEA also called on oil consuming countries to invest more in alternative energy sources.”
