Economy

Economic Daily Outlook

FRIDAY, MARCH 9, 2012

 

ECONOMICS:

OPINION: The Merits of a Corporate Tax Overhaul Laura D’Andrea Tyson

http://economix.blogs.nytimes.com/2012/03/09/the-merits-of-a-corporate-tax-overhaul/

Corporate tax reform is not usually a major issue in a presidential campaign, but it may be this year. President Obama has introduced a bold framework for a business tax overhaul.

His framework is already under attack from both the left and the right, indicating that the president has found a sensible middle position from which to start the debate — a debate worth having. Corporate taxes are a significant determinant of investment, innovation, job opportunities and growth.

When Japan cuts its corporate tax rate this year, the United States will have the highest statutory corporate tax rate of the developed countries. Even after incorporating various deductions, credits and other tax-reducing provisions in the tax code, the effective marginal corporate tax rate in the United States — the one that corporations actually pay on new investments — remains one of the highest in the world.

In a world of mobile capital, corporate tax rates matter.

ALSO IN ECONOMICS: The BLS “Employment Situation” is scheduled to be released at 8:30 A.M. Eastern Time.

 

REGULATION:

Cybersecurity Bills Duel Over Rules for Firms

http://online.wsj.com/article/SB10001424052970203961204577269832774110556.html

A bipartisan Senate bill to bolster cybersecurity has sparked a competing proposal from Republicans wary of new regulations for businesses, a signal that burgeoning anti-government fervor has begun shaping national-security measures.

The White House-backed proposal would require companies that own computer networks integral to key critical infrastructure like electric-power systems and nuclear reactors to meet certain cybersecurity standards. Sponsors include the chairman and ranking member of the Homeland Security panel, Sens. Joseph Lieberman (I., Conn.) and Susan Collins (R., Maine).

 

HEALTHCARE:

EDITORIAL: We Thought They Were Worried About Costs

http://www.nytimes.com/2012/03/09/opinion/werent-house-republicans-worried-about-medicare-costs.html

As part of their broader campaign to repeal health care reform, House Republicans are determined to kill off an independent board that is supposed to help rein in federal spending on Medicare.

Their rhetoric is predictably distorted: charging that “15 unelected bureaucrats” should not be able to “ration care.” In truth, the independent payment advisory board of nongovernmental experts is specifically precluded from rationing care, and Congress, not the board, has the final say on what cuts should be made.

White House Works to Shape Debate Over Health Law

http://www.nytimes.com/2012/03/09/us/politics/white-house-works-to-shape-debate-over-health-law.html

The White House has begun an aggressive campaign to use approaching Supreme Court arguments on the new health care law as a moment to build support for the measure seen as President Obama’s signature legislative achievement, hoping to shape public opinion on an issue at the center of the battle for the White House and Congress.

On Wednesday, White House officials summoned dozens of leaders of nonprofit organizations that strongly back the health law to help them coordinate plans for a prayer vigil, press conferences and other events outside the court when justices hear arguments for three days beginning March 26.

 

ENERGY:

Keystone oil pipeline bill fails in Senate

http://www.reuters.com/article/2012/03/09/us-usa-politics-transportation-idUSBRE8270ZP20120309

Senate Democrats on Thursday defeated a Republican proposal to give a permit to the Keystone XL crude oil pipeline in a vote that will give Republicans more ammunition to criticize President Barack Obama’s energy policies on the campaign trail.

Republicans argue the pipeline, which would ship oil from Canada and northern states to Texas, would create jobs and improve energy security at a time of surging gasoline prices.

Obama put TransCanada’s $7 billion project on hold earlier this year pending further environmental review. He took the unusual step of calling some senators personally ahead of the vote, asking them to reject the proposal.

 

EDUCATION:

OPINION: Ignorance is Strength Paul Krugman

http://www.nytimes.com/2012/03/09/opinion/krugman-ignorance-is-strength.html

One way in which Americans have always been exceptional has been in our support for education. First we took the lead in universal primary education; then the “high school movement” made us the first nation to embrace widespread secondary education. And after World War II, public support, including the G.I. Bill and a huge expansion of public universities, helped large numbers of Americans to get college degrees.

But now one of our two major political parties has taken a hard right turn against education, or at least against education that working Americans can afford. Remarkably, this new hostility to education is shared by the social conservative and economic conservative wings of the Republican coalition, now embodied in the persons of Rick Santorum and Mitt Romney.

 

FOREIGN POLICY:

Greece Passes Key Debt Test

http://online.wsj.com/article/SB10001424052970203961204577269643946192330.html

Just over 80% of Greece’s private-sector creditors had agreed by a Thursday evening deadline to turn in their bonds for new ones with less than half the face value, touching off a massive debt swap that marks a seminal moment in Europe’s long-frustrated efforts to rescue its most financially vulnerable nation.

The wide acceptance of the offer indicates that Greece will go ahead with the restructuring—the largest-ever sovereign-debt default and the first for a Western European country in half a century. It also means Greece will almost certainly use legal maneuvers to impose the exchange on the bulk of reluctant creditors.

 

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