Stephen Ezell, Matt Stepp, and Rob Atkinson contributed to this summary. The President mentioned many issues ITIF focuses on in his State of the Union address last night. And by in large, we agree with what he said when it comes to economic competitiveness. The President deserves praise for putting these issues, specifically manufacturing, front and center. He helped rally the nation and the Congress to the fact that restoration of competitiveness and a vibrant manufacturing sector are, indeed...

On this day in 1957, the Soviet Union deployed Sputnik. The two-foot, 180-pound orb’s beeping was the starting gun of the space race and we in the U.S. seemed to be just putting our sneakers on. Despite President Eisenhower’s initial shrug, America freaked out – but in good way. In under a year, a Democratic Congress and the Republican President created and made operational the National Aeronautics and Space Administration (NASA). The National Defense Education Act, which not only jump started...

  In yesterday's posting, I cited Rob Atkinson's new report on tax reform.  In that report, he argues that there is no evidence of the claim that tax incentives automatically lead to unproductive over investments in the favored sectors.  For example, some investment tax credits may actually boost productivity because of an underlying under investment in certain productivity raising activities.  I am prepared to admit that some tax incentives lead to economic distortions.  For example, I'm not...

Here is an interesting idea from my friend Rob Atkinson at ITIF: a one-size-fits-all tax code is not one-size-fit-all.  In a new report, (U.S. Corporate Tax Reform: Groupthink or Rational Debate?), he points out that the push for tax simplification will actually harm economic competitiveness. The current thinking in Washington is that the tax code impedes economic competitiveness because of high tax rates.  In order to lower rates, the tax code should be "simplified", i.e. eliminate many tax...

Stop the madness!  Purge “tax and spend liberal,” and “corporate welfare proponent” from your label lexicons.  Don’t use phrases such as “industrial policy” and “cut spending across the board” and “big business giveaways” unless you really know what they mean.  The near-death experience with the economy in 2008-9 and painfully slow recovery are the result of often well-intentioned but ultimately flawed policies championed by Democrats and Republicans alike over the last 30 years.  Individual consumers...

I often think that the best thing that could happen to Washington is if it started thinking and acting like a state, instead of the largest economy in the world. States understand that they are in competition and that unless they can export products and services that the rest of the world buys they won’t create jobs and prosperity. That’s why all states, regardless of whether they are led by Democrats or Republicans, have economic development strategies. In contrast, Washington still thinks like...

President Obama recently proposed letting companies (big and small) expense 100 percent of the cost of their equipment purchases made late this year and in 2011. It’s a good idea. It would be an even better idea if the expensing were permanent. Given the slow growth of capital equipment investment by U.S. companies, particularly manufacturers, in the last decade, the non-competitiveness of the U.S. corporate tax code, and the dramatic decline in U.S. manufacturing output and jobs (and corresponding...

In recognition of the sluggishness of the U.S. economic recovery and the fact that it had already taken aggressive steps to get the economy back on track, the Fed recently announced that it would engage in “quantitative easing” (QE) to increase the money supply by buying $600 billion in government securities from the marketplace. This is expected to increase lending to businesses and drive the price of the dollar down, both helpful steps. But while QE is welcome, it’s not enough, not when unemployment...

As Michael Mandel has written in BusinessWeek, the current U.S. recession is due in part to a shortfall in innovation and competitiveness. Those lags, in turn, can be traced to the U.S. corporate tax code. U.S. statutory and effective corporate tax rates are high compared to those of other nations. Moreover, the code provides only minimal incentives for companies to invest in the building blocks of innovation: research, new capital equipment, and labor skills. It is time to redesign the tax code...