This weeks humor can be found in both the Republican and Democratic proposals to stimulate the economy by lowering the Corporate tax rate.

In case anyone was not paying attention this is an election year.  That translates to whatever the Democratic President might propose which, could include motherhood and apple pie,  will not be acted upon by the Republican Congress.  Whatever the potential Republican candidates might propose will be designated as campaign rhetoric and will not be taken seriously either.  End result no changes to the tax code are possible before the end of 2013.

A brief listen to the proposals has each of the candidates jousting to a lower rate of 25-28%, with a simultaneous magical change to the tax code that would eliminate all of the embedded loopholes and subsidies..

Even though the top corporate rate is currently 35% the big question here is what is the effective rate currently being paid by Americas top companies.  The short answer dependent on the industry is between 10% and 20%.  So the truth of the matter would be that all of the proposals for a reduced rates are actually tax increases.

I am going to have to go back and reread “1984” to find out what doublespeak really means.

The situation surrounding the recent Greek “non default” has demonstrated how far down the rabbit hole we have traveled.

The ECB coupled with some heavy duty political allies engineered a 50% principal reduction for Greek bondholders.  For all but a few of the purchasers of Credit Default Swaps, actually the ones who utilized sophisticated counsel to amend the standard swap agreement, this was not considered a “default” that would trigger the payment required for that event.

My own viewpoint is that the notional value of swaps outstanding were probably some unknown multiple of the actual amount of Greek debt and that the payment required on the contracts would have created more of an economic catastrophe than the “non default”.

Having said that, the success of the measures over the last few weeks has been to kick the can a little further down the road.  The Greek populace is still not ready to accept the draconian level of austerity that is required and the stronger Euro nations do not want to set a bad precedent.

The bottom line is that it is too early to celebrate the end of the European debt crisis.