Where is the US economy headed?

There is no real world at this time.

Masses of people have given up looking for a job... the number of unemployed Americans continues to grow.
There is no real world recovery in progress at this time.

2. Reduce the tax code’s bias towards debt financing. The current corporate tax code encourages corporations to finance their investments with debt (e.g., by issuing bonds) rather than equity (e.g., by selling stock). This encourages corporations to rely excessively on debt, which, as the recent financial crisis demonstrated, poses risks for both the firms and the broader economy. The tax code should be more even-handed in treating these two types of financing.


I agree with pretty much all of that.

Cycloptichorn

Cycloptichorn wrote:

2. Reduce the tax code’s bias towards debt financing. The current corporate tax code encourages corporations to finance their investments with debt (e.g., by issuing bonds) rather than equity (e.g., by selling stock). This encourages corporations to rely excessively on debt, which, as the recent financial crisis demonstrated, poses risks for both the firms and the broader economy. The tax code should be more even-handed in treating these two types of financing.


I agree with pretty much all of that.

Cycloptichorn

That makes little sense to me. But that was a discussion from a day or two ago. No longer pertinent.

Are you suggesting that businesses should have no access to new capital other than through the issuance of common stock?

Cyclo, Are you implying there is no fear of bankruptcy if they borrow? It would seem the lender would scrutinize whatever loan amount they are seeking against future liabilities, profit and loss of the company.

Cyclo, Are you implying there is no fear of bankruptcy if they borrow? It would seem the lender would scrutinize whatever loan amount they are seeking against future liabilities, profit and loss of the company.

The waiting game still is not over, but it may be soon.

The nation’s employers added 192,000 jobs on net in February, up from a gain of 63,000 jobs the previous month, the Labor Department reported on Friday.

While February’s number represented the fastest growth in nearly a year, it was partly the result of a bounce back from unusually depressed hiring in January, when winter weather shuttered offices and factories around the country. Taken together, the job growth for the first two months of the year has not been much better than it was last fall.

Still, economists are hopeful that the pace will soon pick up.

“Economic recoveries can be like a snowball rolling down a hill, in that it takes time to get some momentum,” said John Ryding, chief economist at RDQ Economics. “People hesitate until they feel that the recovery’s durable enough, and then they have a tendency to jump in. Maybe we’re finally getting to that jumping-in moment.”

The unemployment rate ticked down to 8.9 percent, falling below 9 percent for the first time in nearly two years. This rate, which comes from a separate survey and is based on the total number of Americans who want to work, has remained stubbornly high in the last year despite payroll growth. Altogether 13.7 million people are still out of work and actively looking.

Economists say the unemployment rate may rise temporarily in the next few months, as stronger job growth lures some discouraged workers back into the labor force. Right now the share of working-age population that is actively involved in the work force — that is, either in a job or actively looking for one — is at its lowest level in 25 years, an indication that many Americans are waiting for hiring to get better before resuming the job hunt.

Not at all. I'm saying that our tax code shouldn't reward companies who use Bonds instead of Equity to raise money.

It creates a perverse incentive for them to take on what have been revealed to be unsustainable levels of debt.