..."China’s current-account surplus — the broadest measure of its trade relations, which tracks how much more China exports in goods and services than it imports — has plummeted. In 2007 it amounted to more than 10 percent of the entire Chinese economy.
By last year it had shrunk to about 2.8 percent. And the International Monetary Fund estimates it will decline to 2.3 percent of the nation’s output in 2012, the smallest since 2001."...
Keywords: Chinese Economy, US Economy, Trade Imbalance
Keywords: Monetary Policy, Inflation
Keywords: Global Economy, Country Ranking
A conversation with: Peter Thiel, founding CEO of PayPal; Member, Board of Directors, Facebook; entrepreneur; and venture capitalist and Niall Ferguson, Laurence A. Tisch Professor of History, William Ziegler Professor at Harvard Business School.
Keywords: Politics, Economics
The Federal Reserve has boosted its outlook for U.S. economic growth this year and is slightly more optimistic about the unemployment rate, reflecting improvements in recent months.
In an updated forecast Wednesday, the Fed predicts the economy will grow between 2.4 percent and 2.9 percent in 2012. That compares with its forecast in January, when it estimated growth this year between 2.2 percent and 2.7 percent.
The Fed is estimating that unemployment, now at a three-year low of 8.2 percent, will be between 7.8 percent and 8 percent at year's end. read more on CNBC
Keywords: US Economy, Fed Outlook
"[Some people] simply don't believe that when two people trade one is not ripping the other off," exclaims Matt Ridley, zoologist and author of The Rational Optimist. "A big problem with the world is that human beings find positive sum games difficult to understand."
Ridley sat down with Reason's Kennedy to discuss his thoughts on free trade, ideas having sex and the irrationality of apocalyptic science.
Keywords: Progress, Prosperity
As the U.S. debt and deficit grows, some politicians and economist have called for higher tax rates in order to balance the budget. The question becomes: when the government raises taxes, does it actually collect a larger portion of the US economy?
Professor Antony Davies examines 50 years of economic data and finds that regardless of tax rates, the percentage of GDP that the government collects has remained relatively constant. In other words, no matter how high government sets tax rates, the government gets about the same portion. According to Davies, if we're concerned about balancing the budget, we should worry less about raising tax revenue and more about growing the economy. The recipe for growth? Lower tax rates and a simplified tax code.
Keywords: Budget, Taxes
We met Dan Mitchell of Cato Institute in Zurich last night. One of is key messages is that individual liberty can be enhanced when competition between governments is protected, promoted and preserved.
We recommend to read his blog:
Keywords: Big Government, Individual Liberty, Freedom
F. A. Hayek’s most famous book, The Road to Serfdom, was written as a warning—to “socialists of all parties”—that socialism, the intellectually fashionable trend of his day, would lead to the loss of both liberty and prosperity. He was right, but the nature of the threat has changed from the time of his writing in 1944. Politicians today are not so enamored of government takeovers of business and industry as when the theories of Marx and Lenin were still ringing in their ears. Now they are more infatuated with socioeconomic control through regulations, bailouts, endless government “services,” and, especially in Europe, supranational planning. read more
Keywords: Liberty, Freedom
Taxes are not the only thing that matter in determining job creation and economic growth. But, any politician, pundit, economist or voter who ignores the negative impact of taxes on growth and prosperity is showing a callous disregard for the well-being of the American people.
That is the inescapable conclusion of the new book, Eureka, written by Arthur Laffer and published by Pacific Research Institute, a California based think tank. read more
Keywords: Taxes, Economic Growth
Keywords: Liberalism, Role of Government over Time
Republican Paul Ryan (Wis.) who chairs the House Budget Committee about the pillars to get back to a growth path:
- internationally competitive taxes
- Spending discipline
- entitlement reforms
What Ryan writes about taxes:
"But the president’s budget is the most “anti-growth” when it comes to taxes. He wants the top effective marginal income-tax rate to rise to 44.8 percent in January.
Think about what that means. Eight out of 10 US businesses aren’t corporations; they file their taxes as individuals, like partnerships or LLCs. And 65 percent of our net new jobs come from these businesses; they’re where more than half of Americans work today.
But the president is basically saying to them: If you get successful; if you buy four acres out in the industrial park in Elkhorn, Wis., and grow from five employees to 25 and then to 250 employees — well, we used to call that the American Dream, but now you’re part of the evil rich, and you’re going to be hit with a 45 percent effective tax rate. Throw in our state income tax, and you are over 50 percent." read more in the New York Post
Keywords: US Economy, Taxes, Groth
WASHINGTON (MarketWatch) — The cost of living rose again in March even as the price of gasoline leveled off, the U.S. government reported Friday.
The consumer price index climbed 0.3% last month as the cost of most goods and services rose, the Labor Department said. The increase outstripped the rise in wages, so inflation-adjusted earnings for the average American worker fell 0.1% last month.
Economists surveyed by MarketWatch expected a 0.2% increase in the cost of living.
read more on MarketWatch
Keywords: Inflation, US Cost of Living
Keywords: Jim Chanos, China, Chinese Economy
..."The ECB’s surprise liquidity operation put the continent’s crisis on hold. But now, just fourth months later, matters are again coming to a head. The big southern European countries, Spain and Italy, battered by austerity, are spiraling into recession. The deterioration of economic conditions is casting doubt on their governments’ budgetary arithmetic, undermining political support for structural reform, and reopening seemingly closed questions about the stability of banking systems.
Once again, the eurozone appears to be on the verge of unraveling. So, will it be once more into the breach for the ECB?"
Keywords: European Crisis, ECB, Structural Reform
Antony Davies gives good explanations:
Keywords: Minimum Wage, Regulation
Kewords: US Economy, US Growth, Technology, Productivity
Some observers praise its 'state-led capitalism.' But the truth is that leaders, starting with Deng Xiaoping, loosened Beijing's control. read more
Keywords: China, China and Capitalism, Free Flow of Ideas
Here is an excerpt:
..."The first step would be the elimination of the double mandate. Unlike the European Central Bank, which is in charge only of price stability, the Fed has two main legislated goals: promoting full employment and promoting stable prices.
This gives the Fed too much flexibility, pushing it to substitute for the government in designing economic policy. The temptation to act in this way is particularly strong when Congress is divided and paralyzed. It is precisely this substitution that makes the Fed politically vulnerable. The central bank can be independent or activist; it cannot be both. Independent is better"..
Keywords: Monetary Policy, Central Bank Independence, Fed Independence
Keywords: Government Spending, Spending Other People's Money, Federalism
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