It seems Congress is looking into getting the tax code to work in bringing jobs here. Also, on the inflation front, Dow Chemical is reporting that material costs have become a financial tumor. Folks, welcome to another edition of Manufacturing Monday!
You bring the jobs, and we'll lower your taxes!
Back in 2004, then-presidential candidate, John Kerry, proposed a tax plan to promote manufacturing jobs. Essentially if you hired a certain number of American workers, that you as an employer, would receive a tax credit. There was a graduated system, depending on how many you employed.
Always enjoy a bit of cheery news on your monday, brought to you by the IMF:
The International Monetary Fund said there's no end in sight to the U.S. housing recession and warned that deteriorating credit conditions for consumers and banks may prolong a period of slow economic growth
In Part I of this series, I examined the 1992 best seller entitled "Bankruptcy 1995", which had predicted that the US would become unable to service its national debt as early as 1995 due to soaring budget deficits. So dire and well-documented was the warning that it affected the outcome of the 1992 presidential election, helping to elect Bill Clinton. In light of new looting of the national treasury by George W. Bush and the Republican Congress, I re-read the book to see if any of its predictions were now coming true. I posted those predictions, and the book's thesis that continued budget deficits would drive up interest rates and lead to "Death by Hyperinflation" or "Death by Panic" in Part I.
But "Bankruptcy 1995" obviously didn't happen, in spite of the fact that deficits have continued to be run nearly every year since then. Only part of the reason was the fiscally responsible Clinton tax and budget plan that began in 1993. In this diary I examine how a long-term, continuous decline in interest rates has actually reduced the carrying costs of the National Debt, and why that means the sky Hasn't fallen -- yet.
In the Middle Ages, one of the chief means by which a man could absolve himself of his indiscretions was the purchase of an indulgence from the Church. The promise of release from eternal damnation brought with it much abuse, and the presumption that money could be called upon to put one in God's good graces was the subject of condemnation by Luther and those who protested against the excesses of the Catholic Church.
Much as medieval indulgences were presumed to absolve the penitent, the practice of charity in modern society has assumed much the same function.
In 1971 America had a currency crisis. Other nations had stopped accepting our paper dollars as payment for our debts and were demanding gold instead. The problem was that America didn't have enough gold to cover the massive debts being run up because of the war in Vietnam.
What did we do? We simply defaulted on our debt by repudiating the promise to back our currency with gold. The situation was epitomized by Nixon's Treasury Secretary John Connally, when he responded to the complaints of 29 trading and banking allies: “It may be our currency, but it's your problem.”
37 years of massive budget and trade deficits later it is still our currency and it is still someone else's problem. However, every game must someday end. Eventually the costs of playing the game become so great that the benefits of not playing become attractive.
The world is now approaching a point where it is being forced to make a choice.
OPIC is the Overseas Private Investment Corporation, a bureau of the US Treasury Department, which provides capital and risk insurance to companies who need help from the taxpayer to move their operations to foreign countries and avoid paying US taxes and sidestep US labor and environmental laws.
CNN Money has a reasonable overview of what is in the bill.
Permanently increase "conforming loan" limits. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,500 from $417,000
U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.
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