The U.S. Treasury auction of long-term bonds on Thursday was “terrible”, in the words of one Wall Street economist, with the rate on the 30 year bond jumping from 4.1 to 4.3 percent. This is just the first sign that the debt-based Obama economic stimulus plan is about to become a major drag on the recovery, just as expected. The economic news is not all bad. We are seeing signs the rate of contraction is abating quickly, promising a bottom to the recession sometime this summer as many forecasters have …
The Obama Administration appears about to walk away from $7.5 billion in taxpayer money used to prop up Chrysler. This little information nugget was buried in Chrysler’s filing before the bankruptcy judge last week and confirmed by Administration sources. So much for responsible government and transparency! The Bush Administration pumped $4 billion into Chrysler to keep it alive long enough to go into bankruptcy well-prepared. Obama has waived the $4 billion and a $300 million fee. In exchange, taxpayers are receiving an 8 percent stake in a company likely worth …
President Obama’s new corporate tax proposals cover two issues: tax evasion and tax punishment. He may have it half right. The tax evasion part is relatively easy. When U.S. taxpayers maintain foreign accounts with foreign financial institutions, Obama wants the financial institution to tell the Treasury about the accounts in the same way domestic institutions keep Treasury informed. This is quite an unacceptable intrusion into personal privacy, but it is just one of the inescapable pitfalls of having an income tax system. The one bit of good news is that …
Markets are weighed down by worries over the new swine flu and the ongoing stress flu; the former from Mexico, the latter from the Treasury Department. Recently, Treasury added markedly to market uncertainties by suggesting it would convert federal capital injections from preferred shares of banks to common shares. This makes little sense unless Treasury’s goal is to unsettle markets further and dilute the holdings of existing shareholders. Treasury’s stress test examinations of the nation’s largest banks to determine if they have the capital to survive a major economic downturn …
• President Obama’s budget presented at the end of February painted a picture of a fiscal trainwreck. The Congressional Budget Office (CBO) today confirmed what many had suspected – the fiscal consequences of the President’s policies would be much worse. • The President is calling for massive tax increases equal to about $150 B a year by 2019. • He raises taxes not just on upper-income taxpayers as he promised, but on all Americans through his misnamed “climate revenues”, and as his budget indicates, this is just a starter program. …
In Thursday’s outraged House debate on the AIG bonuses, House Republicans rallied around a different approach. Members of both parties in the House and Senate have taken the tack of proposing to tax these bonuses through targeted, retroactive taxation. This is the substance of the bill that passed the House Thursday by a wide margin. This kind of oppressive use of government power to thieve private property is so unprincipled as to make the past behavior of Wall Street tycoons seem saintly in comparison. The House Republicans, including minority leader …
In his piece “International Cooperation is the Way Out of the Financial Crisis” Wall Street Journal, March 13, 2009, U.K. Chancellor of the Exchequer Alistair Darling makes three recommendations, the first two of which are wrong-headed and the third threatens much the same. Mr. Darling observes correctly that we are in the midst of a deep, global, synchronized contraction. His first two prescriptions for the recession are the dual follies of fiscal stimulus (read: more spending) married to monetary stimulus, and increased funding for two of the least useful institutions …
The European Union (EU) is once again lecturing America on its economic policies, and thanks to President Obama’s policies and his allies in Congress, the EU is right and America is wrong. Europe, like the United States, is plunging into recession. France saw a stunning 13.8 percent decline in industrial production since last year; Sweden’s drop was 22.9 percent roughly matching the drop in the U.K. The U.S. responded to its recession by adding a $1 trillion plus fiscal stimulus on top of a nearly $1.5 trillion deficit for 2009. …
Laura Tyson’s “In Defense of Obamanomics” in the Wall Street Journal Monday well portrayed the view of history and government from the classical American socialist perspective – more government is inherently better (except when it involves national defense), higher taxes are inherently better, especially when falling on the most productive, and citizens really can’t get along adequately without giving up more freedoms to the nanny state. Nowhere is this perplexingly twisted view of reality made more clear than in her statement that “the strong expansion of the 1990s proves that …
President Obama’s budget document lacks the details necessary to judge fully his tax proposals. What we have are proposed streams of revenues over 10 years and short tag lines describing the proposals. A full assessment of his tax program will therefore have to wait. The initial impression, however, is that the President intends to carry through on his campaign promises to sacrifice future economic growth at the altars of redistributionism and nationalized health care. For all liberals’ posturing in recent years, including by President Obama, about the irresponsible Bush tax …
