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.
"High capital gains tax rates also place our country at a competitive disadvantage to other nations. While many foreign governments impose no tax on long-term capital gains -- encouraging savings and investment -- our capital gains rates are some of the highest among industrialized economies. On average, the capital of a U.S. business or farm is taxed at a rate 80 percent higher than that of foreign competitors. Yet even at such high rates, the capital gains tax brings in only a small percent of total federal revenues, making up a mere 3 percent of total tax receipts.
"Reducing the capital gains tax will encourage investors to unlock cumulative gains of the past, thereby freeing funds to be reinvested in more future-oriented, entrepreneurial, growth generating enterprises. In fact, the Cato Institute estimates that an incredible $7.5 trillion exists as unrealized capital gains that are "locked-up" to avoid taxation. Reducing the capital gains tax rate would free a large amount of that "locked-up" money, encourage private-sector capital formation, increase output and real wages, boost business and job creation, and help lead to a rapid economic recovery.
"Of additional benefit, history teaches us that a capital gains tax cut can actually increase federal receipts. There is ample data indicating that by spurring economic growth and activity, a capital-gains tax cut actually produces more tax revenue for the government. Both of the past two capital gains tax rate cuts (in 1981 and 1997) were followed by remarkable gains in the stock market and the economy. In both cases, the economic shot-in-the-arm the capital gains tax cut provided lead to significantly higher federal revenues.
"Over the years, opponents of a capital gains tax cut have argued that reducing capital gains tax rates largely benefits wealthy Americans. This argument ignores recent trends. Today, more than half of all Americans invest in the stock market. We have become a nation of investors, and a capital gains tax cut would benefit Americans in every tax bracket. ...."An immediate capital gains tax cut will help ensure that our nation's economic engine is running full throttle to back President Bush's war against terrorism.
"A capital-gains tax cut would promote economic growth and development, revitalize the sagging economy and bring needed revenues to Washington. Considering our current situation, I believe that is exactly what our ailing economy needs."