United States Economy

There's trouble in the global village. Argentina is in crisis, facing currency devaluation or debt restructuring or job and wage cuts for its workers--at a time when unemployment is already 16%. Brazil and all of Latin America--and developing countries everywhere--will be affected by the way Argentina resolves its problems. In Asia, Japan's giant economy is in recession again and Singapore's economy is dipping toward negative growth. Only China is holding up reasonably well.

Tim Hanson had heard that the luxury tax placed on expensive boats could be lifted, but as he helped set up for the Southern California Boat Show at the Convention Center, the news was just sinking in. "Yee-haw!" crowed Hanson, service manager for Marine Center Inc., a Pomona power boat dealership. "The taxes on boats are discouraging a lot of people from buying them. If they drop the tax, I bet things will change."

High interest rates, falling stock prices and weak property sales are slowing Japan's financial juggernaut. That's of great concern in the United States, where Japanese money has supported everything from the U.S. budget deficit to the expansion of urban skylines. The recent reduction of such investment has been partly responsible for depressing U.S. commercial real estate values and driving up American interest rates, many experts say. And U.S.

Two prominent Senate critics of President Reagan's Strategic Defense Initiative lashed out Tuesday at any move by the Administration to push for early deployment of the program, also known as "Star Wars." Sen. J. Bennett Johnston (D-La.), speaking at a news conference, said quick implementation of the program would be "absolute folly" and "nonsense," adding that the laser-beam weapons needed for an effective space-based defense are years away from development.

In an extraordinary personal appeal to nerve-racked investors, Treasury Secretary Robert E. Rubin walked out onto the steps of the Treasury Building on Monday and declared that "the fundamentals of the U.S. economy are strong."

The nation's chronic deficit in merchandise trade fell by an unexpectedly large margin in November to $13.2 billion, an improvement of 25% from October's record $17.6-billion shortfall, the Commerce Department reported Friday. The November trade report had been anxiously awaited by financial and currency markets worldwide. The impressive improvement, marked by a $2-billion surge in U.S. exports and a sharp $2.

It began in late March as an early-morning blip on a Tokyo computer screen. A trade war over computer chips was looming between the United States and Japan, and currency traders, afraid that the United States would be the big loser, were clamoring to sell U.S. dollars. By the time the dust had cleared several weeks later, the dollar had plummeted in world money markets, interest rates in the United States had jumped sharply and inflation fears were rising again.

Just two years ago, a humming U.S. economy served as the lifeboat for entire regions of the world that seemed to be drowning in a sea of financial turmoil. Jump ahead to spring 2000 and a strikingly different picture emerges: Now, it is America's economic expansion that is showing hints of weariness, while many other nations bask in a vibrant comeback.

Federal Reserve Chairman Alan Greenspan, finding "no evidence of any upturn in inflation," Tuesday predicted another year of solid economic growth, although at a somewhat slower pace than in 1998. With unemployment at its lowest level in a generation, price increases negligible and the stock market booming, Greenspan offered no indication that the Fed will soon adjust interest rates either up or down.

A young Democratic President, troubled by a sluggish economy and a skeptical business community, proposes a new tax incentive designed to boost private sector spending and win the hearts and minds of corporate America. Bill Clinton in 1993? No, it was John F. Kennedy nearly a generation ago.