European Stars and Stripes (Newspaper) - November 03, 1985, Darmstadt, Hesse                                Sunday november 3. 1985 the stars and stripes Page 19 tmpusin0ss news if global Index finds flaws in . Economy Elpaso Texas up1 an economic Index devel oped by a group of Philadelphia business forecasters is measuring America s International economic performance and finding it lacking. . Industries get bad Marks from the economic com petition Index developed for the democratic leadership Council by Wharton econometric forecasting associates of Philadelphia said rep. Ron Colemand Texas a member of the Council. According to the Index America s International eco nomic performance has plummeted 48 percent during the past five years and . Industries Are substantially less ready to compete today than at any time in the past 20 years Coleman said. He said the abrupt and dramatic decline in . Trade performance poses a grave threat to our National  Coleman called the Wharton report a comprehensive indicator of whether the United Stales is growing More or less competitive with our main trading  the Council was founded this year by rep. Richard Gephardt d-mo., its chairman. Sen. Sam Nunn d-ga., and gov. Charles Robb of Virginia. Co chairmen Are gov. Bruce Babbitt of Arizona sen. Lawton Chiles a Fia and rep. James Jones a okla. The Council includes elected democrats at All Levels governors senators representatives state legislators and mayors. Coleman said. It Aims to be a catalyst for change. The dec Bei Ives hat continued inaction in the face of ballooning budget and Trade deficits ultimately will put America s Standard of living at risk the Index says. We need a new strategy to promote our nation s economic strength a blueprint for winning in Trade against Tough competitors in markets at Home and  developed by Wharton economists and reviewed by Lawrence r. Klein a 1979 Nobel laureate in economics the economic Competition Index was released last month it differs from other measures of the nation s economic health because it puts America s economic performance in an International context. Because America s Domestic Economy is no longer Iso lated from the rest of the world the old standards for judging our economic Success no longer  the economists wrote in winning in the world Economy a Book let explaining the Index. We need a new yardstick one that takes into account our increasing integration into a rapidly changing global Economy. The economic Competition Index is that Mea sure a clarifying tool which policy makers can use to make informed and strategic decisions instead of simply responding to the political pressures of the moment. And by tricking key economic trends it can provide Early Warr in signs of the harmful effects of unsound   Coleman said the Index shows a 27 percent decline in . Competitiveness in the last five years with the Over valued Dollar and High real interest rates responsible for nearly three fourths of the decline. The study cited these contributing factors the Dollar s inflated value against major foreign currencies which accounted for 61 percent of the decline Between 1980 and 1984. Lagging . Productivity growth compared to that of major trading partners accounting for 17 percent of the decline. A relative Rise in real . Interest rates responsible for 12 percent. A drop in the . Personal savings rate from its average level Over the prior decade from 1970 through 1979, accounting for 9 percent of the decline. Slower growth in research and development spending than that of . Trading partners responsible for i per yearly rate of increase May be waning corporate gifts climb 15 percent to $3.8 billion new York not american companies gave an estimated $3.8 billion in Cash products and property to charities last year a jump of is percent Over the previous year according to a National Survey. But there Are signs that the yearly increase in corporate giving May be beginning to Slacken. According to the conference Board a nonprofit business sponsored research organization in new York two trends investor s. Finicle by William Doyle q. After hating accumulated assets in brokerage account plus substantial amounts of municipal Bonds and certificates of Deposit i am looking for Federal scone tax Relief. However because of the a certainty of future Lux Laws i am apprehensive about procuring additional a to Copal boards. Are there any other investment instr awaits that Are free from Federal income tax and that also would preserve the Varae of my initial investment from a fluctuating Market a. No. You re looking for what would have to be called the perfect investment something that is both tax free and risk free. To use a time worn expression there s no such  interest from municipal Bonds debt obligations issued by slates and their political subdivisions is not subject to Federal income tax. Assuming the issuer does not default a municipal Bond is paid off at its face value when it reaches maturity. If the bom is called for Early redemption it is paid off before maturity sometimes at More than face value. So if you hold a municipal Bond until its maturity or until it is called for Early redemption you know you won t lose Money unless the Bond defaults. However if you sell a municipal Bond before its maturity or it is called you might get More or less than you paid for it. Market prices of Bonds go up when interest rates fall and go Down when in Terest rates Rise. There s no Way to avoid that Market risk. Your worries about the effect of future tax Laws on municipal Bond interest Are Way out of line. None of the Federal in come tax Reform proposals now being considered would do away with the lax free feature of Public purpose Munici pal Bonds issued to build town Halls emerged from its study companies Are giving More non Cash gifts such As computer equipment pharmaceutical or food and Are focusing increasingly on gifts to organizations engaged in Job training Low income housing and economic development in de pressed neighbourhoods. Linda Platzer who directed the Survey said we tracked giving patterns of 315 companies which Are the Pace setter in the schools highways and the like. The Reform proposals would make tax Able the interest from new private Pur pose municipal Bonds also called Indus trial development Bonds which have been used to pay for such things As factories shopping centers and even go go bars. Also All municipal Bonds already is sued Woid continue to pay lax free inter est. If we get the True tax Reform this nation so badly needs lots of income tax loopholes will be closed. That could leave municipal Bonds As just about the Only tax free game in  q. Suppose i have a Bond paying 9 percent interest and interest Rales fall so that the baiter of that Bond can Issue new Bonds at 8 percent. Is the issuer Likely to Issue new Bonds and use the proceeds to Call my Bond for Early redemption in other words what is the Rule of thumb to determine when Bonds will be called a. There s no easy Rule of thumb. Generally a Bond with a High interest rate will be called for redemption when the issuer can Issue Bonds with a lower rate if the expenses of bringing out the new Bond Issue Don t negate the interest savings. Those expenses can be substantial. However when the Cost of interest Over Long periods of time is factored in a drop of 1 percentage Point in interest can make it advantageous to Call Bonds for Early redemption. Many Bonds have Call Protection Fea Tures meaning the issuers arc prohibited from calling them until specified dates. Before buying any Bond you should Check its Call provisions. Thing Faal Urai Yokim Natl dolt a Komi a Lllan que Slont but it can Provoda Antwan wily through Titt column. You can Wollt to him in care of the Slan and slrlec., Apo 09111, us. Form Field and found they gave si43 million in 19s3 to civic or Community activities and increased this in 1984 to $241 million a gain of 68  she said the areas that benefited most from increased giving were those hit hard est by Federal budget cuts. Bob smucker a vice president of the in dependent sector a Washington based coalition working to promote charitable giving and voluntarism called the increase in com Pany contributions  but smucker said the increase in company contributions could not compensate for the losses in government resources noting that Federal cuts for Community development and employment training totalled j35 billion from 1982 to 1985. Analysts who watch philanthropic trends have singled out corporate contributions As the fastest growing component of private charitable giving. In 1984, private giving totalled $74.25 billion according to an an Nual Survey by the american association of fund raising counsel. Corporations accounted for 4.7 percent of private giving individuals provided nearly 90 percent and foundations provided 6.6 percent. The conference Board s estimate of a total of s3.8 billion Given by companies in 1984 was based on research by the Council for financial Aid to education. Hayden w. Smith a vice president of the education Aid Council said my Rinal Esti mate on the basis of talks we have had with hundreds of companies is that corporate giving will go to s4.2 billion in 1985." while that represents a 10 percent increase Over 1984, he cautioned that leading Compa Nies that Are now making up their budgets for future contributions Are saying the Sharp up Ward trend is unlikely to continue. General electric co. And its foundation totalled s31.2 million in contributions last year with most of the funds going to sup port higher education but with increasing emphasis on improving pc College Educa Tion in science and mathematics. This represented a substantial increase Over 1983, and the 1985 program will in crease to s34 million said Paul Ostergard the president of the foundation. International business machines corp. Again led the list of corporate givers with a total of 183.5 million in 1984, about 80 percent in Cash and the balance in High technology equipment for colleges and universities. Traditionally the company has been a big supporter of education and expects to maintain its pattern of giving said Alfred Scallon the director of corporate support programs for ism. General motors corp. Moved into second place among corporate givers last year with gifts in Cash and equipment totalling $72.8 million. That represented a substantial in crease Over the s40.i million reported in 1983, which a company spokesman called an economic recovery year for the Compa  pm is continuing As a major provider of funds for education but is also helping Urban redevelopment project in Detroit and other cities. 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