Bernanke’s views of the recovery were less than optimistic. He sees a shaky recovery.
Recently, good news concerning second quarter company profits came from marketwatch.com.
On-line retailer’s earnings rose 45%
Microsoft profits rose 48%
E-Trade reported the first quarterly profit in three years
AT&T quarterly income jumped 25%
Caterpillar nearly doubled it’s profits
UPS quarterly profits surged
Capital One reported a net income of 608 million dollars
AmEx reported a net income of 1 billion dollars
More bad news
US jobless claims rose to 464000
Economic insecurity is at a 25 year high.
The good news about earnings and income is not accompanied by a substantial increase in private sector jobs. And the stock markets gains where less than would be expected with all the good news above.
These profits are not totally due to an increase in sales. The profits are due to implementing leaner operations and getting more productivity out of their workers. These companies are reluctant to hire back the employees that were laid off at the beginning of the recession. As a matter of fact, some of these companies are laying off employees while increasing profits.
This adds up to less money circulation which is bad for our economy. It means that the Republicans will have a very tough time fulfilling their promise of more jobs. Tax incentives and cuts will not encourage companies to start hiring nor to expand operations. Companies will probably remain in the current mode of operation indefinitely in order to remain competitive with other companies inside and outside the US.
All this slows down the economic recovery and ensures that tax cuts and incentives may do little more than add to the deficit.
Pelosi Wants the Bush Tax Cuts To Expire. This may be bad news for us in 2011. But it also may be good news for the national debt. During the floor debates in the US House of Representatives, Democrats pointed out the increase in the national deficit due to tax cuts while Republicans pointed out the increase in the national deficit due to the stimulus package and health reform.
The rules of the House were dropped. No amendments were allowed with regard to the unemployment benefits package passed by the Senate and a vote was taken.
The same had happened with the Finance Reform Bill.
Now we have the Republicans fighting for the Bush tax cuts that would help businesses while the Democrats are fighting for the Bush tax cuts that help the middle class and the poor. And we have Pelosi wanting the Bush tax cuts to expire.
If Bernanke is right about his gloomy economic projections and Market Watch is right about economic insecurity, the tax cuts will do little to stimulate jobs and consequently will increase the national debt.
How about a invest-in-recovery as you go with tax cuts? Another words, you could get a tax cut long as half of it is invested in US Bonds.
Anyways, we have a stalemate. Neither party is willing to admit that their economic solutions will add to the national debt or the national deficit.
I have heard portions of the Finance committees meetings concerning the expiring tax cuts. I don’t agree with Obama, the Republicans or the Democrats.
We should not penalize the people earning over $250000 a year by letting their tax cuts expire. In effect, we would be punishing them for having a lucrative successful career.
If we are going to fight for the poor and disabled, we must also fight for those who are earning high incomes. The final extension of the Bush tax cuts must be fair to all the citizens of our nation.
Therefore, any decrease in tax cuts must be made across the board. This is the fair way of handling it. Everyone should be treated equally.
I often complain about the Republican contempt for the poor. Would I be justified in showing contempt for the rich? Absolutely not.
The Obama administration, the Republicans and the Democrats must realize that we are all in this together. We must all share the burden of lowering the national debt and the national deficit.