Sydney: I don’t really know if anything more can be done. The Fed can’t lower interest rates anymore, and They’re not keen to do any more quantitative easing. The Government doesn’t really have the money to throw around either. Continue reading
Economy
Symposium 2011: should we repeal the federal income tax? If we were to do so, how would we fund the federal government?
Sydney: No. This is a stupid idea. The nation is massively in debt as it is and I can’t see how there is any we that we could make enough changes, or introduce enough new taxes to rescue a Government that is massively in debt as it is. If anything rich people should be paying more in income tax. Continue reading
Symposium 2011: We are currently over $15 trillion in debt as a nation. What changes should be made to restore fiscal responsibility and direct the country towards a balanced budget?
Sydney: It seems that Government is way too big. There are plenty of Departments that could either improve their efficiency, or be removed altogether. Alternatively, there are clearly some Departments that should be administered by the States. There is also duplication at the moment, such as in the welfare system where both States and the Federal Government seem to be doing the same thing. Either the States need to be responsible, or the Federal Government should be. Continue reading
Symposium 2011: Is China a strategic partner, a strategic competitor, or an enemy of the United States? Are they an economic threat or a military threat?
Michigan: China is too busy building factories and infrastructure to worry about such things as world peace keeping, nuclear weapons, or a world class military. We need China and they need us. I think that China may have the best economy in the world today. So yes, they are an economic threat. As far as a military threat, they can have anything they want, but they are content to set back and watch us spend our money. Continue reading
Symposium 2011: President Obama has suggested a new infrastructure stimulus as part of his jobs plan to help get the economy going. Should transportation continue to be a primary responsibility of the federal government, or should we devolve transportation spending to the states?
Sydney: I’m not entirely sure that the infrastructure stimulus was all that effective the first time. So there doesn’t seem to be a lot of sense in trying again. It seems to be a good idea to transfer transportation funding to the States as this would help the Federal Government save money. Maybe a better idea would be to privatize large transportation projects and perhaps provide only modest financial incentives to the private companies who take on these projects. This could be done by either the Federal Government or the States depending on the type of infrastructure and whose responsibility it was. Continue reading
Symposium 2011: What rates would you propose for the personal income tax, the corporate tax, capital gains & dividends? Should we abolish the death tax? Which tax credits and deductions, if any, would you keep? Do you support Obama’s proposal to extend the 2% payroll tax holiday for another year?
RMC: This is a real simple one for me. Zero percent for personal income tax, 0% corporate tax, 0% capital gains and dividend taxes. Yes, we should get rid of the estate tax or the death tax. Mortgage interest deductions. And, finally, no we should not extend the 2% payroll tax holiday. Continue reading
Symposium 2011: What reforms, if any, would you suggest be made to the Federal Reserve? Should the Fed’s dual mandate to achieve maximum employment and price stability be repealed or should there be specific targets for each?
RMC: Well, I think the Federal Reserve has a useful purpose but it has been responsible for the biggest economic disasters in the past fifteen years. Low interest rates fueled the internet bubble back in the late 1990s. That didn’t turn out too well for the economy or stock market. And accommodative policy helped fuel the real estate bubble and we’re still trying to recover from that. Continue reading
Economic Outlook 2011
Gross Domestic Product
Following zero growth in 2008 and a 2.6% contraction in 2009, real gross domestic product (GDP) increased by roughly 2.8% (an an annual basis) according to advance estimatesi released by the Bureau of Economic Analysis (BEA). The economy remained modestly expansionary in 2010 with first and second quarter changes in real GDP of 3.7% and 1.7%. These figures follow an increase in real GDP of 5% in the fourth quarter 2009. Third and fourth quarter real GDP increased by 2.6% and 3.2%, respectively, showing a slight upward trend in economic activity. While the trend in 2009 was clearly marked by recession followed by a modest upturn in activity, economic activity in 2010 could be characterized as modest. However, in 2010, housing markets remained weak with continued declines in prices and increases in foreclosures, credit markets remained tight, inflationary pressures increased and unemployment remained high. Continue reading
Symposium 2010: Is more economic stimulus needed and what form must it take to get the economy back on track?
We’ve seen that the economic stimulus that has cost taxpayers trillions of dollars has had little to no effect on getting the economy back on track. We need to wake up to a few realities before we start talking about stimulus. First, a lot of jobs that have been lost over the last few years aren’t coming back. A lot of corporations had gotten top heavy in terms of labor. Continue reading
Symposium 2010: What do you perceive to be the biggest threat to the U.S. economy—inflation, interest rates, oil prices, etc.?
Oil prices are obviously that great unknown factor that can dramatically impact economic performance. Interest rates are at historic lows and will likely remain that way for the foreseeable future. Of course, having said that, there is only one way for rate to go at this point and that is up, so we need to be cognizant that cheap money is a transitory factor that is going to go away in the future. Continue reading
Thinking Outside The Boxe 