Some on Wall Street worry that the loss in wealth due to falling stock prices will cause consumers to spend less and save more, slowing economic growth. William C. Dudley, chief economist for Goldman Sachs and Co., said "there's disconnect" between Bush's policies -- such as extending last year's tax cut past 2011 -- and the problem. "It's the least optimal situation for an economy that's potentially in trouble to be cutting taxes not now but in the future."
Lawrence Kudlow, who was an economist with the Reagan administration, also criticized the Bush administration for its long-term view on taxes. "They seem to be a little slow reacting to changing events," he said. ...
Wall Street analysts and several economists also propose cutting the capital gains tax paid on profits from stock sales or eliminating all taxes on such profits if they are reinvested in new stocks. And some have pleaded with the White House to revisit its decision to impose steep tariffs on imported steel. "Bush's steel decision has really hurt the markets by creating a sense that we're going to have trade wars," said economist Stephen Moore of the Club for Growth.
BUCHANAN: "Thank you, Bill. I want to talk today a little bit about what’s going on in the economy, because it concerns a lot of folks. And one of the reasons you have got real problems in the market, the Nasdaq has lost 75 percent of its value, and the Dow has lost about 30 percent of its value-that equals in the United States, since the peak of the market, over $5 trillion dollars in equity has been wiped out.
Worldwide it’s over $11 trillion. Now people aren’t saying why it is. And I’ll tell you one reason they’re ignoring. It is the collapse of the American dollar overseas against the yen and the euro.
Why is the dollar falling? Too many dollars are out there. All over the world a wash. How are they getting out there? Three ways. American foreign aid shovels them out of the United States. Second, IMF and World Bank bail-outs of year ago, they shovelled all those dollars out there. But third and most important, since Y2K began, January 1, 2000, the United States has run $1 trillion in merchandise trade deficits.
That’s right, more goods, a trillion dollars more goods pouring into America from foreign factories than going out from America.
What does that mean? It means manufacturing is dying in the United States of America. Jobs are going overseas. The great economic independence of the United States is being lost and, more important now, it means it’s coming right home to River City, and it’s starting to kill the American dream. Congress has got to get off this global free trade, which is killing this market. "
Since we now have an 'information-service' economy instead of an industrial, maybe we can export some information (audited) some hamburgers or some dot.gone knowhow.
Look how Cheney is getting chastised for selling his Haliburont stock due to a perceived conflict of interest, now he sold it due to insider trading.
Democrats who are cheering the current economy for political gains suck, plain and simple.
1) It is utterly pointless to "eliminate taxes if invested in other stocks". The only effect that has is to increase commissions by brokerages. The idea is to free up capital to be invested, not in secondary markets, but directly into companies so they can use it. Stocks sold on the NASDAQ are owned by someone other than the company.
2) Without radical changes in the way the Federal Reserve is operating, a capital gains tax cut right now would be a disaster. Tax cuts create future demand for liquidity (i.e. money) and unless the Fed is able to supply enough of it, it will re-ignite the deflation that has caused the economic wreckage you see before you. I am whole-heartedly in favor of reducing/eliminating capital gains but ONLY if it is coupled with changes to the operations of the Federal reserve.
What's the benefit of capital gains tax cut when there are probably so many losses already on the books that it may be years before many investors have any gains that they owe tax on? I mean capital losses offset captital gains dollar for dollar.
More nonsense equating the stock market with the economy.
A capital gains tax cut only benefits the paper pushers on Wall Street.
It does absolutely NOTHING to address the fundamentals of operating a business in America.