in addition to the high tax rate, the u.s. tax worldwide earnings and most developed countries don't tax companies in a similar manner. under the current u.s. system, all income is subject to u.s. tax creating an incentive for companies to leave the cash outside the u.s.. if we were able to freely bring our foreign income back home to the u.s., we'd have the freedom to invest earnings in product development, new capital spending, or return them to the shareholders who can invest in the u.s. economy. outside the u.s. is most likely invested overseas creating foreign rather than american jobs. this causes the nument nationals to delay to bring their earnings back home. rather than restrict the free flowing capital, we need to deploy capital supporting the needs of businesses and creating jobs. third, we need a simplify the tax rules. that's no secret that our u.s. international tax system is highly complex. you may not know i was a cpa once and completed corporate income tax returns early in my career. now, the complexity of the

the u.s. dollar being the world's reserve currency. the united states gets an extraordinary play on the global economy and this is insulated americans from price hikes in food and energy in a way that ninety nine point nine percent of americans don't understand but they will understand soon because even though the u.s. is experiencing a recession a slowdown they haven't seen nothing yet because once the dollar truly collapses price of gas will quadruple price of food will skyrocket and then are really going to see what the american economy is all about a third world pig dressed up with a lot of lipstick and phony accounting tricks well max credit in a way i think it's kind of like the oil curse having this exorbitant privilege of the u.s. dollar and that the government really doesn't need the population because they can just transfer money they truly can unlike any european country where in europe you have to work for a living you actually have to produce wealth in order to maintain your standard of living or to increase your well you

the will of the u.s. people we see a repressive reaction i mean this case of san francisco is in the first i remember two years ago in the protests in pittsburgh against the g twenty summit where several individuals were arrested for tweeting and for informing other protesters of you know the movements of police and during the protests i mean something that was a completely legitimate expression of speech was then criminalized and so again what's good for the u.s. to do in other countries is never good at home and you don't hear them saying anything i mean i think one of the most in your face examples that we were talking about in our news room today within the u.k. in the wake of the riots. you saw two men in england get a four year sentence for inciting disorder through social networking sites essentially on facebook they use it to quote organize and orchestrate disorder for your sentences i mean is that a headline you would read in the u.s. and just go oh also not not only would you not read it but you

and other countries so they've been moving out of the u.s. dollar as the world reserve currency status for a while it's like the old joke about the husband knowing the last one to know that his wife's been cheating on him the american people are the last months of the world to know that the rest of the world has been cheating on the us dollar they've abandoned the u.s. dollar years ago and only now is it becoming an issue in the us but it's been an issue around the world ever since china became part of the world trade organization and you have this massive transfer of labor from the u.s. to china taking advantage of the so-called wage arbitrage thanks to bill clinton which gutted manufacturing in america and when they talk about this debt ceiling and the need to stimulate and the need to print more money as rick. having u.s. economy that would imply that there is some manufacturing base that is there to be revived but there is a manufacturing base there's only weapons of mass financial destruction created by banks on wall street and they keep

and the u.s. offers its single largest loss of life in the afghan conflict as a nato helicopters reportedly downed by the taliban thirty u.s. troops including some from the same unit that killed osama bin laden died along with seven soldiers. next must go out stay with us.

the top u.s. military commander has criticized pakistan for not doing enough to root out al qaida on the visit to kabul mike mullen said the border region between afghanistan and pakistan remains a safe haven for terrorists among hundreds toward the was that comes as the u.s. begins to withdraw its combat troops from afghanistan and the control over parts of the country to the wall says the taliban remains defiant and then to suicide bomb strike killing eleven people south of the country on sunday most into this struggling to cut its war spending has increased dramatically since the invasion about ten years ago ati's military contributor thinks the u.s. should abandon its bench no military strategy. what is the most obvious and the most necessary measure to slash the us budget deficit for the first time in the us history it was not the democrats it was their republicans who launched a fiscal counter offensive against the a sleepy white house regarding how to slash the budget deficit specific only i

this software would allow the u.s. military to push their agenda by flooding social media forums already influenced by so called witness bloggers international outrage at the kidnapping of a self declared lesbian blogger in syria had real policy implications until i mean it turned out to be this american man but i feel really guilty about this. other say there's a contradiction between support for internet freedom abroad and subpoenas alerted wiki leaks collaborators at home including private bradley manning. pozner says the suitcase is just part of a larger internet freedom agenda don't shoot the instant messenger. instead address the underlying grievances but these platforms appear less welcome when activists take to the streets at home video release a surveillance video that in san francisco police cut cell phone services on the metro during protests those who you know work for san francisco city. traders the bars. and you can go whoa oh oh look you don't see the two in following riots in london there is talk of shut

and staying on the same topic while the u.s. debt agreement awaits approval by the senate and from the president let's get further analysis on the deal from a professor of political science joseph chiang from the city university of hong kong professor trying thanks very much for being on the program and i know the house passed the debt ceiling agreement but still it still has a few hurdles to jump before tuesday's close of play so is the u.s. out of the woods yet do you think. well it is generally p.b.s. that given the present agreement between the two parties the shop terms before its crisis basically has been resolved that people are worried about various issues of head including the media the issue of perhaps the united states who loses triple a rating then of course in general people are very worried that the united states is in no position to solve is long term that problem and that may create further crisis ahead there's also a very that the. obama administration a certain need been weakened and it will have to face more pr

the u.s. government has been the line in the sand. they've been the one who put their foots down and said, we're going to back the banks, you can be sure of your bank account and our credit. this isn't the end of the world. it's aa-plus, still a really high grade. but it's disconcerting in the middle of the crisis as it's deepening. >> the full faith and credit of the u.s. government, it's an expression that's been used forever, it's not that this was entirely unexpected. i almost think what was unexpected was the reaction out of washington from all sides last night. everybody was looking for someone to blame. and no one looked inward and said, what do we do to fix this to get back on top. >> you know, i think you could have had a big rally in the stock market on monday if you had the president and leaders of both parties in congress and all the candidates for president from the gop to say, we're going to get our problems under control, we are now looking beyond politics and our individual ideologies and we're going to get this fixed,

dollar is course connected to the u.s. treasury bond market and it's connected to the thigh bone connected to the hip bone connected to the foot bone connected to the yeah baby it's all connected so to downgrade you start to pull the thread on the u.s. dollar the whole kit and caboodle gets unraveled yeah you all might also say however that it's own related to s. and p. itself and moody's and fitch because the u.s. and france are in such bad shape due to all the so-called aaa rated collateralized debt obligations and other credit derivatives that s. and p. allowed to be rated aaa and then these country's banks bought these toxic debt yeah that's an interesting part of the history isn't it during the period leading up to the financial crisis the selling of collateralized debt obligations c.d.o. zx of their known and other flora and fauna of the derivatives fear spawned by the which are self blith masters. fish and moody's and s. and p. gave these cancer nations these abominations their aaa rating and it created this huge pon

as the u.s. credit rating gets downgraded by a notch some fear the move could spark another black monday on international stock markets leaders criticize the rating agency standard and poor's accusing it of double standards and promise to establish a european agency in response or he's daniel bushell has the details. we used downgraded trust in the rating agencies to junk status. as the agency admitted a two trillion dollar miscalculation when deciding this downgrade they claim to have the world's best minds working for them hasn't really surprised people here because most know that the mochas has had unsustainable that for many years now well everyone apart from the rating agencies it seems and the day before collapsed in the credit crunch they still had aaa ratings all those companies know that made the agencies lose their reputation but people lost their whole savings and triggering the world recession that followed. the rules are furious about as to these double standards they held with the wh

he thinks the u.s. pump more money into the economy, become the employer of last resort and put more stimulus money in. i don't think there is a political will with the republicans or democrats to do that. >> he could call up the tea party caucus and say, hi, i was wondering if we could spend more money we have to get the economy going again. another stimulus is almost unheard of. richard, would it be the fed to do that? >> well, look, everybody's a bit busted. monetary policy is out of the game. qe-2 proved -- i'm not sure what it did prove but it didn't work as they hoped. qe-3 and it would create huge problems for the fed in terms of unwinding the balance sheet and what it does for the monetary policies. fiscal policy is tied up with congress and clearly isn't going anywhere while the tea party carries sway. in that scenario, the grid lock is total and that is where s&p comes in and launched this grenade. >> final thought from you, candy, about whether we'll see a kumbaya moment and have a supercommi

and the u.s. suffers its biggest single loss of life in the afghan conflict as a nato helicopter is reportedly down by the taliban thirty u.s. troops including some from the same unit that killed osama bin laden died along with seven afghan soldiers. documentary coming up showing how the republican.

and for the u.s. to reduce unemployment it probably has to grow faster than three percent that doesn't look like that's going to happen you know there's a growth of the population. there's certain amount of productivity increases so you need to have a certain amount of economic growth to pull down the unemployment rate it looks to me like many other economists like the unemployment rate is going to stay high and i think that the u.s. doesn't resolve its problems if it does the last chance of the two thousand and twelve election ok well thank you very much for insight they have mr peter t. tried a chief economist for an asia based rating agency talking to us from hong kong. thank you. well as the heroes are members joined forces to save their common economy one e.u. state is happy it isn't bailing out the single currency poland was supposed to join the euro zone next year but those plans are now on ice with warsaw eager to stay out of the crisis. reports. rioting in greece from the country's economic cr

the u.s. and japan can ensure the next half century enjoys the same stability and prosperity. the u.s. has been seeking concrete progress on the long delayed relocation of a u.s. marine air base in okinawa within the prefecture. it is hoped that japan will also join negotiations for the trans pacific partnership at an early stage. the u.s. government wants to hold a bilateral summit late september at the earliest when noda will attend the u.n. general assembly in new york. time now for the latest in business news. we've had some fresh manufacturing come out and industrial production is a closely watched indicator in japan. what kind of numbers are we seeing? >> indeed. since april, right after the earthquake, we have managed monthly gains and industrial production for the month of july also rose 0.6% and that does mark an increase for a fourth consecutive month. the ministry of economy, trade, and industry announced that the output index at factories and mines was 93.2 in july against a referen

the response from the u.s. nically is more of the same. >> right. >> almost putting an exclamation point on the end of s&p's sentence saying, can't you guys get it together. gloria, there have been a few people in the market today who told me, look, if you could have some magical kumbayah tomorrow, where you had a washington with one voice, the government saying, we get it, and guess what, we are going to with renewed vigor make sure by december 23rd we'll have a christmas decision, not a christmas crisis, and we're going to get our fiscal house in order. and we are the economic superpower. you could have a big rally on monday. and am i a poly anna for thinking that could happen? >> no, you are a little bit of a polyanna, but let me tell you, everybody understands that there is a way out of it. and the key to this is getting tax reform. if you get tax reform out of this super committee, and you actually lower top rates, then you can start closing tax loopholes. then maybe you can start talking about the expirati

>> we want the u.s. companies to be competitive players in the global economy, and so as the economies as the u.s. are growing faster we won the u.s. companies to be winners in those markets as well. it's got to be good for jobs in the u.s. long term. >> this is for i guess mr. duke or mr. merlo because your company is in the retail business you both have highly effective tax rates. what does it mean when you compete against companies that are not u.s. based, and i guess it comes back more specifically to the question who are your major competitors i guess i would ask and where are the headquartered and what challenges does the tax system present for you as you seek to expand new markets around the world? >> senator come i can quickly named three large multinational retailers we compete with against the world. tesco from the u.k., from france and metro from germany, and it's interesting because we are often competing for specific real-estate sites to build new stores and markets around the world, and that

treasury department show the figures released by the u.s. treasury department show the country the united states currently has a total operating cash balance of seventy three point seven billion dollars this compares with apple's seventy six point four billion of cash reserves which has built up during a phenomenal half decade of strong sales. of course most of their goods are well they're designed and innovated. in the united states but they're all manufactured in china yes this brings up a number of interesting points stacy first of all fifty percent of all the apples manufacturing capacity could be in the united states so instead of having seventy or eighty billion in cash they might only have ten or twenty billion in cash by law under the sea a company is not even allowed to have that much cash without paying a dividend so they're actually breaking the law on that front second of all this is actual cash on apple's balance sheet it's not their money so call that's on the american government's balance sheet which is actually not hard cold c

the u.s. suffers its biggest single loss of life in the afghan conflict as a nato helicopter is reportedly down by the taliban. six am in moscow good to have you with us here on r t our top story the united states prize aaa credit rating has been cut for the first time since the one nine hundred seventeen standard and poor's has dropped america's ranking one notch to double a plus this comes after a last minute debt deal earlier this week narrowly rescued the country from default s. and p. says the spending cuts agreed by congress for one and a half trillion dollars shy and if not changed it could result in a ratings fall in further years but the obama administration says the analysis is way off and will drive a genuine recovery archy's lucy cavanagh has more from washington well it really is more than anything a huge a symbolic and unprecedented blow to the united states to its status as a safe investment basically what this credit rating lowering does that it is it really raises questions abo

to the u.s. military contractors out granted the mission to sue the government of the claims of imprisonment and torture don't hold rumsfeld the former country's secretary of defense could be found in liable.

the country not simply u.s. one now given the current situation you will have people who expect the u.s. dollar will keep on coming here so you have a country we serve in us that definitely that will be up to the surface but at this moment there's no other choice that that means that china government will try to. you know coming is by the u.s. so come on boys women will be over every liquid asset and also. come on the circle of government so. no other alternative will both fall of the. country to hold the surface. on friday the financial world was shaken by after the u.s. was stripped of its perfect aaa credit rating by standard and poor's for the first time since one thousand nine hundred seventeen the rating was downgraded one notch to double a plus with a negative outlook u.s. treasury department rosary department went on the defensive saying there's a two trillion dollar mistake in their calculations as in p. admitted is such but says they're sticking with its decision saying the huge budget deficit is a majo

the u.s. treasury bills, u.s. debt enjoys, what are the people in the market saying about whether that aaa rating could be maintained, nina? >> that's something that started creeping into the forefront of investors' minds. last week people started saying even if we do get an 11th hour deal, it's perhaps not going to make much of a difference to the credit ratings agencies who are already ahead of the curve on this one. it was very interesting to note, charles, just last week we spoke to a number of investors last week. he was telling me that u.s. lost its aaa coveted rating a long time ago, so some people say perhaps it's already priced into the market. we should still stress that the u.s. treasuries are trading at lower yields than many other government bonds, even at lower euros. that means despite all of this, they're being the least risky out of these sovereign debt options that people have to invest in. you mentioned gold. the metals trading desk is behind me. they're having a bit of a qui

it would have just been the u.s. crashing i mean you could have seen manufacturing in china crash you could have seen i mean unemployment would have been through the roof you could have seen massive social unrest you could have seen ice huge just calamity and when that have led the u.s. government to step in even further and lead to to tell a tear in a time you're going to have to tell her tears and now as i said it's called fascism into the through the t.s.a. lately you know so well let's get put this into perspective when it collapsed in two thousand and eight that the people were still feeling prosperity for the regular state bubble had really burst yet the credit crisis was just as a making it could have been worse than it's going to be now because now they're all talking about cutting back severely great cutting back severely it slime when you go back to two thousand and seven two thousand and eight you had an unemployment rate of what four point seven percent now it's a cooked number at nine point one percent so

the s. and p. downgrade of u.s. foreign debt burbank and down six point three percent one of the most liquid stocks on the markets but the only little game i use polos gold up point four percent because of higher gold prices who look at them and it's like the. u.s. markets are trading deep in the red but we'll look at them in a second unfortunately was showing european figures here for three down three point three percent for foreigners let's move to the u.s. market figures them dow jones down more than two percent nasdaq three percent this is pretty expected bank of america loser the down more than nine percent on the dow germs. back to european markets figures then the first see down three point three percent as i mentioned jacques. five percent this is of course despite statements from the european central bank that it will be intervening on the on the market to buy sovereign bonds and now it's moved to commodities gold a set of fresh regular it's worth more than seventeen hundred dollars per ounce silver also gai

turning back to the u.s. debt drama that seen its top tier credit rating take a hit now if you or i get deep in debt the bank is ready to pounce and yet it's only now that the u.s. which owes trillions is seeing its credit score decline line talk show host laurie harshness asked people on the streets of times square why consumers seem so addicted to borrowing. why do you think so many people allowed themselves to get so far and that is the is the age that we live in everybody sees the person next door that they've got the brand new car the lifestyle and that's what they want is so much advertising and people just want you to spend money so i think that's the difference between americans and europeans but you have advertising in europe are you just you don't pay attention to it or. i think we pay less attention to it and we probably think a little more about what we need and what we can't afford so it's all about thinking yes i think so is it worse for you to be into personally that it is for a government to be

leaders criticized the u.s. rating agencies blaming them of double standards saying they will create a european one in response he's done a bushel has more brussels. we used downgraded trust in the rating agencies to junk status. as the agency admitted a two trillion dollar miscalculation when deciding this downgrade they claim to have the world's best minds working for them hasn't really surprised people here because most know that america's has had unsustainable that for many years now well everyone apart from the rating agencies it seems and the day before firms collapsed in the credit crunch they still had aaa ratings on those companies now that made the agencies lose their reputation but people lost their whole savings and triggering the world recession that followed. the rules of furious about s. and p's double standards they held talks with the white house before this decision they briefed them about it when it would take place what would happen and that's allowed the white house to prepare a smooth respon

at least there's not going to be a default in the u.s. parently with the debt drama coming to an end what's next for the fragile u.s. economy. john defterios takes a look at that just ahead. stay with us. >>> welcome back from cnn hong kong and london. you're watching "world business today." >>> now, the on fire debt deal calls for $2.5 trillion of cutting in the next ten years but will it help the state of the faltering u.s. economy, which we know from the u.s. manufacturing reports shows some sign of strain. cnn's john defterios joins us here from london. give us a bit of detail. how bad was that? >> it's interesting. the survey has very closely watched. it's indicated what the futures's going to look like. number one, it was very dire, but we had a 5-point plunge, that's after a strong rise in june. we have a turning for the better in the second half of 2011 that's going to point to higher growth. what i think this points to is the impact the debt impasse is having on the psyche of the consumer and is spilling over to the business commu

the most necessary measure to slash the u.s. budget deficit for the first time in the u.s. history it was not the democrats it was the republicans who launched fiscal counter offensive against the sleepy white house regarding how to assuage the budget deficit specifically in military and security fears the main challenge for the fiscal sanity of the united states is american military doctrine of strategic over which has to be various to ditch their prevention or bunker mentality be a big conventional bloated tender going budget and to shift into unconventional symmetrical vision of the new and incoming challenges to the united states and to the whole world. a tornado swept through russia's far east killing one of its destruction twenty eight others were injured by the large whirlwind natural phenomenon considered rare in the region a twister tore through the center of the city tearing rooftops from moving. cars of trees and power lines almost to the roads and create. the hades are still sitting on. the right side of. now we have more news updates and videos online here is ju

the aaa rating of the u.s. treasury bond is a reference rating there's connected to all these other aspects of the economy like the municipal bond market also on the corporate side i was just looking at zero hedge that made a good point that institutions like options clearing corp or the group that is responsible for clearing of shorts cells they're all being downgraded too so this is affecting the fundamental infrastructure of the entire system itself was being downgraded as the entire poem and rubbles yes i also read while we were in the states that j.p. morgan is the next were downgraded by s. and p. and the reason why is they said that j.p. morgan rely so much on the u.s. government despite all their protestations despite every year when jamie diamond collects his tens of millions of dollars bonus he says because i deserve it nobody works as hard as i am i'm so clever i can print money but it's the u.s. government according to the rating agencies they can take the morgan it's its rating but nobody works as h

the top story u.s. lawmakers have finally reached an emergency deal to avoid a disastrous debt default after weeks of political bickering and stalemate if passed by congress the compromise will permit american borrowing to continue after tuesday's deadline exchange for more than two trillion dollars in federal cuts in the next decade the deal was struck off the rack obama held last ditch intensive toward it. democrat and republican leaders on increasing americans that when it all the pretty little struggle is far from over but the key issue of how to balance the budget being put off by late today. right now i reports torturous and looking to reach an agreement america's reputation from illinois. help us avoid default debt ceiling nation default and this crisis time's running out the entire world is watching it's been a public spectacle filled with bickering grandstanding and lack of compromise i devise if defeat over raising the u.s. debt ceiling created an unprecedented climate of uncertainty over ameri

big russ was was saying that the u.s. is actually out creaking of a greek speakers if you add all of the unfunded liabilities to the national debt figure i mean the national debt figure. isn't really what this is really about but really the unfunded liabilities are the so-called fiscal there when that's two hundred and two trillion us dollars saw in many ways that's worse than greece the budget deficit is very small as the same as grazier of ten point eight percent budget deficit in the eurozone was formed not as a eurozone as any better i mean they're just blowing up right now to. have severe seeing again pressure on greek and takes government bonds and even germany and france are increasingly looking shaky on the government as well but just as a reference when the eurozone was found there was a limit of three percent a budget deficit as a percentage of g.d.p. that is normally considered as a maximum sustainable so the u.s. is now at ten point eight percent clearly as we have been warning we are beyond the point of no ret

and while the u.s. is dealing with buoyancy problems some communities have chosen to swim against the current or currency in this case creating a different monetary system altogether and there's money to go around. and rifling over the second amendment right here why gun dealers and buyers are saying w t f to a.t.f. sell and tell policy. what is so dangerous about you making your own choice about whether or not you can drink from meal i think we ought to vote for the right to drink. well not of the milk please have anything to say about it so why is the government waging a raw food fight. good evening it's friday august fifth eight pm here in washington d.c. i'm lauren lyster and your watching r.t. now new jobs numbers are out the unemployment rate ticked down a tenth of a percentage point to nine point one percent it was a simple limmer of hope coming just days after a dead deal in washington narrowly escaped default from the u.s. and stocks slid the most since two thousand and nine let's see if we say

in the u.s. presently and they contribute to the downturn you come back down to well he certainly has the pieces china it is fear is it's a cool supporting an awful lot of debt it's also calling for a new reserve currency now a more reliable one what will happen if china abandons the dollar and you think it might even be considering that. well china is a bit of a prisoner of the united states you know they are the other main creditor of the united states more than a trillion and a half. dollars of u.s. dollars of that they owe. owed on their reserves what they fear what china fears that the fed the american central bank will print more money will buy what treasury bonds and that depreciate the u.s. dollar that. investment in the u.s. and they would be. be paid back with monkey money that's why they are afraid down the road and they may try to draw from investing in the u.s. and buy more gold for example the reason why well it is going up so fast because countries like china and india are buying go

investors have game confidence over the u.s. debt resolution but mark rubenstein i have seen metric believes they will remain focused on the other side of the atlantic indicators about the health of the world economy. a lot of this was going on sidelines particular the second june the second part of the week i anticipating in the u.s. labor market rate on friday morning and this statistics that has been coming out now is sage is being painted a mixed picture and that's why i think a lot of into investors are going to be trying to stay on the sidelines until at least this number comes out and particular this is going to coupled with a seasonal slowdown in august so. a lot of investors given all the uncertainties in the market prefer to sort of stand aside law ends and take conservative positions but i mean we're still in the bull market and this is just the pause and i think now when we pause in the good time to look at their winners or rather maybe losers . that's all the update for now but remember a fine wall stories on our web