Dani Rodrik has an interesting take on the problems of globalization and economic integration: Democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full. . . . → Read More: World Economic Trilemma
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The Fed has announced quantitative easing 2 known by the QE2 moniker. The expectations that this alone can raise the level of economic growth in the US is definitely overstated. The Financial Times however points at two other adverse consequences which may turn up in the next 12 months: …other countries are likely to counter what they view as an unnecessarily disruptive surge . . . → Read More: QE2’s like unintended consequences In the mid 1970s when the US was the world’s #1 exporter with a positive world trade balance for 95 out of the previous 100 years, Sen. William Proxmire (D,WI), proclaimed that Americans living and working abroad served no useful purpose in creating American jobs by selling American exports. To him they were “…swathed in mink spending their tax evasion dollars at the gambling tables of Monte Carlo” and mounted a campaign to exterminate them by also subjecting US citizens living, working and taxed abroad to the same US taxation on their world-wide income as if they had never left our shores. . . . → Read More: Wake up: Jobs and exports are related to tax policy The U.S. government taxes expatriate citizens on their worldwide income regardless of where it is earned or where they live, making them the only people in the developed world who are taxed in both their country of citizenship and country of residence…these rules are getting tougher and the penalties more draconian by the year… experts see a declining foreign investment in America. . . . → Read More: Toxic Citizens The US actually ranks today, sixth in global innovation-based competitiveness; 11th among industrialized nations in the fraction of 25- to 34-year-olds who have graduated from high school; 16th in college completion rate; 22nd in broadband Internet access; 24th in life expectancy at birth; 27th among developed nations in the proportion of college students receiving degrees in science or engineering; 48th in quality of K-12 math and science education; and 29th in the number of mobile phones per 100 people. These are clear areas where we should positively WANT our government to get involved, and to spend money, but if the current climate of political divisiveness endures for the next 2 years in a hung Congress, or even for the next 6 years of a potential Obama second term, the consequences for America’s future will be dire. . . . → Read More: I thought we’re number 1! Nope, how about 20-something? It is clear that with the export of genetic engineering technology, know-how and research, the US is shooting itself once again in the foot by its own regulations to injure US exports. And in the process raising up the capabilities of the BRICs. . . . → Read More: BRIC outsourcing US science jobs: Transgenic goat’s milk to fight diarrhea In an article today on a Bond Frenzy the NY Times notes that the bond market snapped up inflation linked 5 year Treasuries with a negative yield. “Investors paid $105.50 for every $100 of bonds the government sold — agreeing to pay the government for the privilege of lending it money,” the NYT said. Why would investors snap these up? They have a . . . → Read More: Topsy turvy world for bond market and Fed Congress has rightly been concerned with wholesale tax evasion by fat cats, but the Foreign Account Tax Compliance Act (FATCA) provisions are designed – as a largely unintended consequence – to chill US exports and our international competitiveness. . . . → Read More: FATCA: US Export destruction act The US has (to mix a few metaphors) shot itself in the foot by building large speed bumps to exports. These things are by no means fore-ordained. The US could, with an adjustment of its tax policies change to more export growth. But the current administration has decided, contrary to its stated campaign promises, instead to carp at others, whine, and continue increase its anti-export tax treatment of overseas Americans and foreign investors. . . . → Read More: Geithner’s chiding of others should lead to export friendly tax reform here |
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