US Treasury Secretary, Timothy Geithner, has developed plans to make the authority over the US financial system better. These plans will avoid banks to take the same risks that have contributed to the current financial crisis. According to Geithner, a simpler, more effective system is a necessary.
First of all, in the current financial system, there are fundamental gaps. These gaps are responsible for the loss of confidence in the basic of our financial system. New rules are really needed. The new developed plans have to be subject to strong oversight by the government. Openness and more transparency among financial institutions and more integration among regulators are also key subjects.
Further, Mr Geithner outlined five key elements to achieve his aim. Now, it’s the perfect moment to implement these five elements. But the foreign country has an important role in the reforming of the US financial system. The US have to work together with the Europeans to realize their plans.
However, a few weeks ago, Geithner had another opinion. According to him, the US couldn’t wait for consensus with the rest of the world. There’s a limit to how long the US could wait for global co-operation.
According to me, this plan will have positive results. The gaps in the financial system have to disappear. The new rules in the US financial system will give the Americans more confidence in the financial system. I think this is a necessary. The situation in the US is worse, measures have to be taken to repair these confidence.
Source: http://news.bbc.co.uk/2/hi/business/7966023.stm
zaterdag 28 maart 2009
donderdag 26 maart 2009
Some hope for retail execs
There is some good news for retail executives. These store managers and district managers might end up as white-collar professionals. They might climb the corporate ladder and become vice president or even something higher after leaving chains such as Linens ‘N Things, Circuit City and Fortunoff. It’s like people say: one company’s loss might be another business’ treasure.Kevin Rigsby is 27 years old and used to be a district service manager with Circuit City. He was responsible for home theater selling and installation but because of the crisis the company went bankrupt and Rigsby lost his job. But he is one lucky guy. He now has a Snap-on franchisee and sells professional hand tools and power tools to repair shops, auto dealers and industrial manufacturers. He was able to do this by studying. He got an education and learned about profit and loss management and customer service and now his advice to everyone else who has lost their job in the retail sector: “it’s not because you’ve been selling electronics that you can’t learn to sell something else”.
The president of Snap-on, Barrie Young, declared that 40% of the new franchisees over the last nine months have had jobs like store manager or district manager in merchants such as Circuit City, OfficeMax and Home Depot. Young says that his business requires people with professional skills and that he finds this with people like Kevin Rigsby. The only problem that these people might experience is the extremely high cost to start-up a franchisee.
It’s great to hear that some people can finally stop suffering from the economical crisis. It’s absolutely true that people who work in the retail sector can learn to sell anything else. In the end selling is in their blood and they would do anything to keep working in that sector.
Education is a great way to create jobs; people are needed to educate and the people who get educated will be likely to find a new job. This is a great impulse for the improvement of the American economy.
Source: http://money.cnn.com/
zondag 22 maart 2009
Tax change would boost jobs
The Treasury in the US drew up a plan to impose “a tax on jobs”, this plan become valid in April. There is only one real problem, namely the opposition of the business leaders, also the CBI and the recruitment companies criticize the plan.
The financial sector has also joined the protest over the plan to cancel the VAT staff hire concession, warning it will deprive the economy of 150,000 temporary jobs.
Faced with having to pay VAT on temporary workers’ salaries for the first time since 1997, clients in the tax, banking and investment circles will respond by dismissing their temporaries.
The CBI employers and the REC asked and hoped to postpone the value added tax changes until 2011, this is the moment that they hope the job market will be re-established. But unfortunately the Treasury rejected the proposal. Besides the director of HR policy at the CBI said the plan was drew up at a bad moment, namely in hard times of financial crisis. The market still needs assistance to survive the recession. But it’s very disappointing that the government decided not to defer the tax on jobs, even they knew the plan scourge up to 150,000 temporary jobs.
Especially the extra VAT will hit many sectors, for instance financial and public services, in which tax plays an important part. The REC predicted the VAT changes will be worth $390 million. The recruitment companies said the proposals of the additional tax on jobs were drew up at a time of recession, which isn’t very promising.
According to me, the government makes a grave mistake by approving the plan of the Treasury. The economy has to stabilize before to execute plans, for instance tax changes. So the proposal to postpone the VAT changes, is better to survive these hard times. It is significant to concentrate on the balance between the economy and the consumers.
Written by Marie Maes
Source: The Financial Times
Article: Warning of tax change threat to 150,000 jobs
Published: March 21, 2009
By Andrew Taylor
The financial sector has also joined the protest over the plan to cancel the VAT staff hire concession, warning it will deprive the economy of 150,000 temporary jobs.
Faced with having to pay VAT on temporary workers’ salaries for the first time since 1997, clients in the tax, banking and investment circles will respond by dismissing their temporaries.
The CBI employers and the REC asked and hoped to postpone the value added tax changes until 2011, this is the moment that they hope the job market will be re-established. But unfortunately the Treasury rejected the proposal. Besides the director of HR policy at the CBI said the plan was drew up at a bad moment, namely in hard times of financial crisis. The market still needs assistance to survive the recession. But it’s very disappointing that the government decided not to defer the tax on jobs, even they knew the plan scourge up to 150,000 temporary jobs.
Especially the extra VAT will hit many sectors, for instance financial and public services, in which tax plays an important part. The REC predicted the VAT changes will be worth $390 million. The recruitment companies said the proposals of the additional tax on jobs were drew up at a time of recession, which isn’t very promising.
According to me, the government makes a grave mistake by approving the plan of the Treasury. The economy has to stabilize before to execute plans, for instance tax changes. So the proposal to postpone the VAT changes, is better to survive these hard times. It is significant to concentrate on the balance between the economy and the consumers.
Written by Marie Maes
Source: The Financial Times
Article: Warning of tax change threat to 150,000 jobs
Published: March 21, 2009
By Andrew Taylor
AIG chief asks for bonuses back
The executives of AIG (American International Group) received bonuses that are way too high and this in the middle of the financial crisis. The chairman of AIG Edward Liddy called the bonuses paid to the executives “distasteful”, the total amount of the bonuses is $165 million. Those bonuses paid to the executives have received a lot of criticism in the U.S. because the greatest part is paid by the taxpayers. But also because AIG has taken $170 billion aid from the government.
Lawmakers are taking steps to recover a part of the bonuses and Edward Liddy also asked to the executives who received more than $100,000 in bonuses to pay at least the half of it back. Some of the executives has answered this question.
In The House of Representatives is voted on a legislation for recovering the AIG bonuses. The bill would apply a tax rate of 90% on bonus income of $250,000 that was paid to companies who received more than $5 billion in bail-out money.
But not only the chairman of AIG is disappointed also President Obama is angry about the bonuses and called them "inappropriate use of taxpayer money". He’s also discussing with his economic council to create new legislation that gives the government more authority over financial institutions like AIG.
I think that those bonuses that were paid to the executives of AIG are distasteful as the chairman of AIG said. This is really a slap in the face of many people in the U.S. because the country has so many troubles and than the people who caused those problems are rewarded. The tax on the bonuses that is voted in The House of Representatives is a good measure and instead of giving executives of big companies such high bonuses it should be better to give that money to the shareholders or reinvest the money in the company. The proposal of Obama is also good and that will help in the future.
Source: http://news.bbc.co.uk/2/hi/business/7950452.stm
Lawmakers are taking steps to recover a part of the bonuses and Edward Liddy also asked to the executives who received more than $100,000 in bonuses to pay at least the half of it back. Some of the executives has answered this question.
In The House of Representatives is voted on a legislation for recovering the AIG bonuses. The bill would apply a tax rate of 90% on bonus income of $250,000 that was paid to companies who received more than $5 billion in bail-out money.
But not only the chairman of AIG is disappointed also President Obama is angry about the bonuses and called them "inappropriate use of taxpayer money". He’s also discussing with his economic council to create new legislation that gives the government more authority over financial institutions like AIG.
I think that those bonuses that were paid to the executives of AIG are distasteful as the chairman of AIG said. This is really a slap in the face of many people in the U.S. because the country has so many troubles and than the people who caused those problems are rewarded. The tax on the bonuses that is voted in The House of Representatives is a good measure and instead of giving executives of big companies such high bonuses it should be better to give that money to the shareholders or reinvest the money in the company. The proposal of Obama is also good and that will help in the future.
Source: http://news.bbc.co.uk/2/hi/business/7950452.stm
What about deficits?
Disagreement about deficits is a common theme nowadays.
Even among Republicans, there is no unity on this issue.
Defending his recent proposal to freeze government spending, Representative John A. Boehner, the House minority leader, said that we simply cannot afford to mortgage our children and grandchildren’s future to pay for this big government spending spree. I told you before I disagree with this opinion because I think we must invest huge amounts of money in order to solve the financial problems.
Martin Feldstein , the Harvard economist and adviser to the past three Republican presidents, shores my idea.
He is certain that short-run deficits help end recessions.
When a downturn throws people out of work, they spend less, causing still others to be thrown out of work, and so on, in a downward spiral.
Failure to use short-run deficits to stimulate spending amplifies that spiral, causing further declines in tax receipts and even bigger deficits.
In 1929, President Herbert Hoover thought that the best response to a collapsing economy was to balance the federal budget. With incomes and tax receipts falling sharply, that meant cutting federal spending. Today we all know President Hoover was mistaken.
But what about long-run deficits?
To think more clearly about them, we must recognize that carrying debt is costly.
Because the government needs to pay interest on its debt each year.
John A. Boehner said we even mortgage our children’s future with it but that is not true according to me.
I understand it can be difficult to understand for someone without an economic background. Martin Feldstein has an example to make things less complicated. It is just like a homeowner’s monthly payment. The payment is larger with a 10-year mortgage than with a 30-year one. But the total burden of the various repayment options (in technical terms, their “present value”) is exactly the same. It’s a simple trade-off between intensity of burden and duration of burden.
So only one question remains, how are we going to pay for these interests on the long term?
One part can be reimbursed thanks to the economic growth in the near future I guess, but we need some good measures as well.
I suspect that the Harvard economist reads my blog because he has given the same example I did three weeks ago. Namely a tax on gasoline.
A $2 tax on each gallon for example, would generate more than $100 billion in additional revenue a year.
He says that there are many ways to pay down debt without requiring painful sacrifices but I wonder in wich intensity politicians will be able to collaborate in order to pass their new provisions.
Source: http://www.nytimes.com/2009/03/22/business/economy/22econ.html?_r=1&ref=economy
Even among Republicans, there is no unity on this issue.
Defending his recent proposal to freeze government spending, Representative John A. Boehner, the House minority leader, said that we simply cannot afford to mortgage our children and grandchildren’s future to pay for this big government spending spree. I told you before I disagree with this opinion because I think we must invest huge amounts of money in order to solve the financial problems.
Martin Feldstein , the Harvard economist and adviser to the past three Republican presidents, shores my idea.
He is certain that short-run deficits help end recessions.
When a downturn throws people out of work, they spend less, causing still others to be thrown out of work, and so on, in a downward spiral.
Failure to use short-run deficits to stimulate spending amplifies that spiral, causing further declines in tax receipts and even bigger deficits.
In 1929, President Herbert Hoover thought that the best response to a collapsing economy was to balance the federal budget. With incomes and tax receipts falling sharply, that meant cutting federal spending. Today we all know President Hoover was mistaken.
But what about long-run deficits?
To think more clearly about them, we must recognize that carrying debt is costly.
Because the government needs to pay interest on its debt each year.
John A. Boehner said we even mortgage our children’s future with it but that is not true according to me.
I understand it can be difficult to understand for someone without an economic background. Martin Feldstein has an example to make things less complicated. It is just like a homeowner’s monthly payment. The payment is larger with a 10-year mortgage than with a 30-year one. But the total burden of the various repayment options (in technical terms, their “present value”) is exactly the same. It’s a simple trade-off between intensity of burden and duration of burden.
So only one question remains, how are we going to pay for these interests on the long term?
One part can be reimbursed thanks to the economic growth in the near future I guess, but we need some good measures as well.
I suspect that the Harvard economist reads my blog because he has given the same example I did three weeks ago. Namely a tax on gasoline.
A $2 tax on each gallon for example, would generate more than $100 billion in additional revenue a year.
He says that there are many ways to pay down debt without requiring painful sacrifices but I wonder in wich intensity politicians will be able to collaborate in order to pass their new provisions.
Source: http://www.nytimes.com/2009/03/22/business/economy/22econ.html?_r=1&ref=economy
US plan to help small businesses
The government of the United States created a plan including measures to help domestic small businesses which are having problems as a result from the economic problems of today. Every bank in the country has to do everything they can to provide credits to small companies. This small business package is the latest measure taken by Obama to stimulate the economy of the United States.
First of all, this plan includes an amount of $15bn to increase liquidity to encourage lending to small businesses.
Further, an amount of $730m is meant to fund tax cuts and incentives. These incentives reduce lending fees and increase loan guarantees.
The plan also includes measures to make health insurance cheaper for small businesses.
Finally, banks must report their loans to small businesses.
So firstly, the government encourages banks to lend more. Secondly, they seek to improve the flow of credit to small businesses.
I know for sure that this measure taken by the Obama Administration will result in an economic recovery in small businesses. I’m really a fan of the manner which Obama uses to help his country. I think he tries to do all the possible he can to solve the economic situation. This measure costs a lot of money, but I think it will have positive results.
Source: http://news.bbc.co.uk/2/hi/business/7946359.stm
First of all, this plan includes an amount of $15bn to increase liquidity to encourage lending to small businesses.
Further, an amount of $730m is meant to fund tax cuts and incentives. These incentives reduce lending fees and increase loan guarantees.
The plan also includes measures to make health insurance cheaper for small businesses.
Finally, banks must report their loans to small businesses.
So firstly, the government encourages banks to lend more. Secondly, they seek to improve the flow of credit to small businesses.
I know for sure that this measure taken by the Obama Administration will result in an economic recovery in small businesses. I’m really a fan of the manner which Obama uses to help his country. I think he tries to do all the possible he can to solve the economic situation. This measure costs a lot of money, but I think it will have positive results.
Source: http://news.bbc.co.uk/2/hi/business/7946359.stm
Abonneren op:
Posts (Atom)