Global Investing, Productivity, Tax Policy, Stock Markets, and Immigration by George Mentz
Over the years, many citizens have demanded fiscal responsibility of their government while many others may believe that the government should be a safety net for individuals and enterprise.
Most people understand that the government should focus on providing the basic necessities such as: roads, infrastructure, police and safety, border control, common currency, national defense, civil rights for all, welfare for the needy, education for our human capital, and care for our elderly.
With that being said, our debt is indicative of the rising costs and spending by government in many of these areas such as: Health Care, Education, Governmental Management, and Energy. There are so many issues to discuss here just based on the previous statements here; however, I will focus on a few for now. First, the US government and private enterprise needs to truly focus on productivity and value. These words were once an issue that both political sides could agree upon.
There are several areas that can be optimized:
1. Productivity of Spending
2. Productivity of Workers
3. Productivity of the Country.
4. Productivity of Capital or Assets (Competitive Advantage)
• A spending productivity example would be incentivizing governmental employees to not spend their entire budget or eliminate positions through attrition.
• A worker productivity example would be to allow employees both private and government to deduct their expenses related to their worker output such as: day care, internet fees, taxes on gasoline, food or clothing used for work etc.
• Nationally competitive productivity - An example of productivity of a country would be to lower corporate taxes, eliminate triple taxation, and allow deductions or visas for companies to move to the USA and hire workers.
• Asset Productivity - An example of this concept is to optimize use of local assets such as timber, oil, gas, food, and even education or health care.
In the alternative, many stocks and businesses thrive off of government activity and pork barrel projects. Some stocks that may benefit from the government are: Information Technology - Internet, Education, Food, National Defense, Purchasing, Security, Transportation and more.
Also, we have noticed many effective and leading companies that are publicly traded on the exchanges have done a few things to be very successful in both good times and bad.
1. Cut waste and fraud
2. Improved technology
3. Expanded sales to global customers
4. Increased incentives for employees
5. Retained earnings to reinvest in global expansion.
6. Created volume savings for customers.
7. Reduced or increased dividends to grow company value or augment investors
8. Avoided undue regulation
9. Avoided undue taxation
With a global market, some companies have survived not on outsourcing, but mainly on out-selling which would be selling products and services outside of the USA. One simple example of sales growth while avoiding local regulation would be to have a successful medical treatment or pharmaceutical sold in 50 countries outside of the USA before even having it approved in your home country. Regardless of who is causing the red tape in the home country, the business grows and people keep their jobs because of multi-national sales.
The EU Community was founded on the free movement of people, capital, services, and goods. The USA has had the benefit of a common market and free trade for many years, but regulation, red tape, compliance, and triple+ taxation are slowing prosperity. Further, the maximization of human capital in the underserved regions of the USA is also limiting large scale growth. While immigration is necessary, a balanced inclusive approach is needed to make sure that incoming diversity from all nations is well served. In this way, our nation can target the best and brightest from all nations in Europe, Asia, Arabia, Eastern Europe, India, Africa, and Latin America.
With global movement of people, they will all need banking, technology, career information, insurance, and consumer goods. People move from country to country, and they want reliable online accounts for: Finance, Shopping, Insurance, and Career.
In the end, most voters and bureaucrats are happy to support effective investments in people and economic security within any nation. The question is how do you do it and at what cost. With technology and strategy evolving each day, we must be careful of how we invest our money, create revenues, expand human capital, or grow debt.
Some stocks that will benefit from the changing global economy may be: Amazon (NASDAQ: AMZN), ETrade Financial (NASDAQ: ETFC), Walmart (NYSE: WMT), Microsoft (NASDAQ: MSFT), HSBC Bank (NYSE: HBC), Monster Jobs (NYSE: MWW), Hartford Financial (NYSE: HIG), Linkedin (NYSE: LNKD)
The Author: Dr. George Mentz is an award winning professor, world recognized author and wealth management commentator who has written several revolutionary books. Prof. Mentz, an international attorney, has been a keynote speaker globally in Asia, Arabia, USA, Mexico, Switzerland, and in the West Indies. Mentz can be contacted for speaking engagements at www.gmentz.com or www.managementconsultant.us Mentz has a new book - Spiritual Wealth Management : http://amzn.com/1452557411
To learn more about economics and financial analysis, take the new e-learning courses pioneered by Mentz. http://www.edevate.com/visitor_class_catalog/category/51875
*No tax investment or legal advice provided herein. Please consult with a licensed professional in your jurisdiction before making any important financial or legal decision.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.