Some cabinet members have mentioned consumption tax rate raise lately. It is a good sign. There is no time to waste. The people are eager to see what picture the government draws for their future. Comprehensive tax reform including consumption tax rate raise will surely ensure a better fiscal condition and a stable tax revenue for maintaining a robust social security system.
The US economy still suffers from a bad unemployment rate, around 10%, although it has enjoyed 5.7% real GDP growth rate in the 4Q of 2009. The stabilization of the financial market and the effect of the stimulus package, however, will get the economy back on a recovery track.
The latest raise of the official discount rate can be interpreted that American authorities have taken a step towards the introduction of an exit strategy.