An editorial in this week's edition of Business Week came out in favor of a fair and responsible estate tax as a means to generate needed national revenue. The editorial said this: "An estate tax that protects families, small farmers,and businesses can still generate tens of billions of dollars in revenues. Letting lapse the income tax cut of the highest income bracket could also generate billions of dollars of tax revenue that could pay for the teachers and emergency responders who will lose their jobs under budget proposals to reduce federal aid to cities. The budget also calls for cuts in Food & Drug Administration inspections of imported food and medicine -- right after a British plant supply half the flu vaccine to the U. S. was closed due to contamination."

As this article in today's Washington Post points out, America's overall indebtedness to foreigners now totals approximately $3 trillion dollars. The trade deficit in 2004 grew 24 percent to a record $617.7 billion. While the administration and Secretary of the Treasury John Snow are touting the trade deficit as economically beneficial, many economists are wary. In an op-ed piece in the Financial Times a few months ago, Snow wrote, "The deficit reflects foremost the strengths of the U.S. economy -- high productivity, strong U.S. growth relative to growth abroad, and the relative attraction of investing in our robust, dynamic economy, which has the deepest and most resilient capital markets in the world." Many economists many economists, however, see problems in the fact that as our trade deficit is growing, the money streaming into our country from foreign markets is not helping to finance a boom in assets such as factories and machinery; instead it is contributing to record levels of consumption based on credit by U.S. citizens. This consumption includes the ever-important oil, which our country continues to consume in very high levels. As Thomas Friedman writes in a New York Times column today, "We are importing too much oil, so the dollar's strength is being sapped as oil prices continue to rise. And we are importing too much capital, because we are saving too little and spending too much, as both a society and a government." This falling dollar without any checks on spending, he points out, could lead to problems down the road. He quotes former Clinton Commerce Department official David Rothkopf as saying "Given the number of people who have refinanced their homes with floating-rate mortgages, the falling dollar is a kind of sword of Damocles, getting closer and closer to their heads. And with any kind of sudden market disruption - caused by anything from a terror attack to signs that a big country has gotten queasy about buying dollars - the bubble could burst in a very unpleasant way." See this editorial in today's Times for more information on why the weak dollar is not currently helping our economic situation.

Last week the administration released the 2005 Economic Report of the President. The report includes - among other details - a chapter on options for tax reform, which the President has expressed interest in looking into during his second term. To look into tax reform options, Bush has put together an advisory panel on federal tax reform; you can see a list of the members of that panel here. Members of the panel met for the first time last wednesday to discuss how they can go about reforming the tax code to make it simpler, fairer, and more pro-growth to benefit all Americans. The panel will submit their recommendations to Treasury Secretary John Snow in July. Today's BNA news services reports that the Chairman of the panel, former Senator Connie Mack (R-FL), is calling for public comments to be made on problems faced by both individuals and businesses under current tax laws. Comments are requested by March 18th. See this page for more information on how you can submit comments to the panel.

In continuing efforts to combat what they see as a detrimental plan by President Bush to overhaul Social Security, Senate Democrats have unveiled a new tool to aid their cause: a social security calculator which shows how much individuals will lose if benefits are "price-indexed" as opposed to "wage-indexed." Many Senators are posting these calculators on their official web sites to bring attention to the issue. While the calculator cannot accurately portray what would happen with an overhaul because no specific plan has been announced, it does show what would happen if the criteria to which benefits are currently indexed were to change. This is a policy which is supported by a number of Congressional GOP leaders, as well as many senior administration officials.