The young President of the United States proves that young people are not always good for the top position as that they tend to make impulsive moves that put the future at stake. Many economists within and outside the US have the opinion that President Barrack Obama has gone crazy with his ‘change we need’ madness.
The reckless bailouts and stimulus has put US in the history’s largest federal deficit ever. Those greedy companies who created all this trouble deserve this end and saving them with billions of dollars is not worth it. ‘President Obama is working on short term results’ is a widespread opinion.
In an effort to cover up this mistake the US government is taxing US firms in inappropriate ways. They are making the worst mistake in US economic depression history by over estimating the strength of their companies and taking their survival and profitable operations for granted.
American companies that have operations in other countries don’t have to pay taxes for the profits they make in foreign markets, if they reinvest that money in those markets. According to a new tax regulation this is no more possible. The supposed result would be that American companies rather than investing abroad will make investments within the US, thus creating more jobs at home.
No more deductions either. The companies don’t have to pay taxes for expenses supporting the existence of their operations abroad. This will not be the case from the day this regulation is enacted. The brunt of this will be felt by the fortune 100 companies who derive more than half their revenue from operations abroad.
The law makers give bail outs for failing companies, but how come they become blind to the consequences of such regulations. These moves rather than bringing more money into their kitty may pull out more bailouts when more American MNCs fail.
Corporations are already in a worst economic and survival nightmare in this incessant economic recession. What does Obama’s government plan by putting them in a more worsened economic state?
History has always proved that short sighted impulsive greedy measures of affecting the economy of companies will have irrevocable ill effects. Right from the Embargo Act of 1807 that created the Depression of 1807 and the Smoot-Hawley Tariff of 1930 that spurred the Great Economic Depression are notable instances.
According to Embargo Act all ships from US are banned from landing in any foreign port unless otherwise authorized by the President himself. To ensure this all ships have to place a bond equal to the value of the ship and its cargo. This was later modified to an extent that exports from US are completely banned. Without exports Americans right from industrialist to farm owners and landlords suffered severe losses, causing unemployment and subsequently the Depression of 1807.
Smoot Hawley Tariff increased the duties for imports from other countries. This was implemented in an effort to increase consumption of domestic production. But this hurt US exports and hence production, as the other countries countered by increasing duties for US products.
Wish the President and his subordinates turn back the pages of history, and turn down their corporate hurting policies in the name of easing unemployment and this economic recession.