Bozur
Amicus
Posts: 5,515
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Post by Bozur on Sept 10, 2008 21:47:01 GMT -5
$75 trillion: 8 Megahorror Debts Chilling the U.S.
marketwatch.com — "America's out of control, drowning in debt, gorging: $75 trillion and getting worse. Now we're dumping Fannie and Freddie on America's balance sheet. Every year we pile trillions more on future generations." Both Obama and McCain will continue this spending. More… (Business & Finance)
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PAUL B. FARRELL A $75 trillion fright fest
Eight megahorror debts chilling America By Paul B. Farrell, MarketWatch
Last update: 7:41 p.m. EDT Sept. 8, 2008 Comments: 780
ARROYO GRANDE, Calif. (MarketWatch) -- America's out of control, drowning in debt, gorging: $75 trillion and getting worse. Now we're dumping Fannie and Freddie on America's balance sheet. Every year we pile trillions more on future generations.
Can't trust McCain? Obama? Time for new leadership! The best qualified for president is the same great American hero we picked as our favorite write-in candidate for the 2006 elections: David Walker, former comptroller general, chief auditor of the U.S. Government Accounting Office for a decade before resigning last spring. He is ready. See previous Paul B. Farrell.
Walker was the "voice of reason" in Washington while Congress and the White House kept wasting trillions like out-of-control drunks, digging America deeper into debt. Nobody listened.
Politicians ignored Walker's warnings, making matters worse as we went from a surplus of $5 trillion in 2000 to crushing debt that's now $9.6 trillion.
Washington tuned out, so Walker went on the road, on the "campaign trail" so to speak, taking his fiscal-conservative message directly to the people in town-hall meetings with his "Fiscal Wake-up Tours," where he spoke of a "fiscal cancer," comparing America to Rome. Now his message is a new film: "I.O.U.S.A.: One Nation. Under Stress. In Debt."
Unfortunately, the film's not a major Hollywood studio release. Why? Even with co-stars like Warren Buffett and a "Saturday Night Live" skit with Steve Martin, it'll bomb at the box office, go to video fast. The 16 reviews I read will scare people away, not draw them in.
Movie-goers would rather see a horror film classic like "Halloween," "Friday the 13th" or "Night of the Living Dead." Why? Because horror films are emotionally cathartic experiences. When you leave the theater, the horror stays behind.
But with "I.O.U.S.A." America's debt will haunt you for years. It already totals about $150,000 for every single household. Worse yet, it's metastasizing $1.9 billion each and every day on the National Debt Clock. So who will go see the film? Few: * Liberals. Maybe a small contingent of lefties. But they already know the story about America's lethal addiction to living on borrowed money. * Conservatives. No way. They actually love big deficits and big federal debt. That money comes out of taxpayers' wallets, pays for their wars and all the profitable deals with China and oil producers that make neocons personally rich. * Main Street. The other 95% of Americans are too focused on their own personal problems; gas, food, rent, foreclosures, inflation, teen pregnancies, credit-card fees, outsourced jobs, and so much more. They'll go to the new Bond film, or stay home and watch the new fall shows, like "Terminator," "Prison Break" and "Fringe."
Sorry folks, but while I recommend this new film starring Walker, it's no "Dark Knight," "Tropic Thunder" or "Ironman." If Congress turned a deaf ear to Walker's "Fiscal Wake-up Tours," this film won't work either. Great message but doomed to the art-theater circuit.
So what will wake up America? Only one thing: A major disaster. Another 9/11 attack? More likely another, bigger financial meltdown during the next presidential term, crippling an already weakened U.S. Treasury and Federal Reserve, set up by more leadership failures in Washington, driving America deeper into debt hell. So here's my adaptation of the 8 most "megahorror" debts to focus on: A format for a film festival highlighting the "The Megahorror Hits of American Debt:"
1. Horrors of Endless Massive War Debt
Vote for the war films symbolizing the horrors of America's addiction to war debt: Think "Apocalypse Now" and "Platoon" or write in your choice. Remember, Americans love war! We love starting wars, spending 54% of our tax money on war. Iraq and Afghanistan wars cost about $12 billion a month. Warning: If we can't find bin Laden in hell or Pakistan, the odds are the Pentagon and neocons will bomb Iran to stimulate our war economy.
2. Horrors of Gluttonous, Addictive Oil Debt
My favorite horror film on our oil addiction is "Mad Max." In a post-apocalyptic world people are killing each other for a few gallons of gas. America is just 5% of the world, yet burns 25% of the oil. By 2050 the planet's population will explode by 68%, from 6.6 billion today to 9.6 billion, all competing with us, demanding more.
Peterson says global warming is the "first cousin" of energy addiction. So the best horror film pick here is loosely based on Pentagon war studies: "The Day After Tomorrow," a coming Ice Age.
3. Horrors of Trillions in Trade Deficits and Foreign Debt
Neocon dreams of globalization and free trade have become a nightmare. America's a new third-world debtor nation. China and oil-producing countries own over half our debt, buy 70% of new debt. Foreigners own us. Now we're forced to sell them our best assets. Expect re-regulation, nationalization pressures and more wars. Best horror flick picks: Think Darth Vader commanding the Death Star in "Star Wars," "Invasion of the Body Snatchers," "The Alien."
4. Horrors of Killer Social Security and Medicare Debt
The Social Security Trust Fund "isn't funded" and "can't be trusted." It's a government-run Ponzi scheme. You put in cash. Washington puts in a paper IOU, then wastes your retirement cash to cover their current out-of-control deficits. A scam. Entitlements total about $75 trillion.
When 78 million baby boomers try to retire over the next few decades, no cash! Watch out, the next generation will balk at paying boomers. Best films revealing the horrors of government corruption: "All the President's Men," "The Bourne Ultimatum."
5. Horrors of Cheap Money, Self-indulgent Consumerism, Zero Savings
Top films targeting this horror: "Barbarians at the Gate," "Other People's Money" and, of course, Oliver Stone's "Wall Street," where "greed is [always] good!" Give us cheap money, so we can indulge in our most immediate gratifications at the mall. Unfortunately Main Street's also trapped in this delusional get-rich-quick mindset that narrowly focuses on the next paycheck, quarterly earnings and annual bonus, never saving for an iffy future.
6. Horrors of Skyrocketing Health-care Debt
Best horror films here: "Thank You for Not Smoking," "Sicko," "Flatline," "One Flew Over the Cuckoo's Nest." With 45 million uninsured, this is a disgrace, a total moral failure: Greed consumes Big Pharma and our insurers. They steal from taxpayers with no-bid contracts. While America's health-care costs are over twice per capita of other developed countries, our longevity and health are no better, and getting worse with rising obesity rates.
7. Horror of a Failing Educational System Debting America's Future
Here the biggest horrors are exposed on television: The illiterates on Leno's Jay Walking, "Jeopardy" and "Are You Smarter Than a Fifth-Grader?" Asia awards more graduate degrees in critical technology areas, while half our kids in urban areas, a third overall, never graduate high school. Our kids are unprepared to compete for fast-food jobs let alone with Asia.
8. Horrors of Failed Leaders Triggering Catastrophic Debt Meltdown
Best film: Hopefully a crisis will trigger a revival of "It's a Wonderful Life," wake us to what's killing us from within, without totally destroying us. As Nobel economist Milton Friedman put it in "Capitalism and Freedom," his 1962 classic on conservative economics, that may be impossible: "Only a crisis -- actual or perceived -- produces real change" because in the aftermath of a crisis "the politically impossible becomes politically inevitable."
But that's high-risk: In that worst-case scenario, our fate parallels the Rome of Caligula, decadent, vulnerable, ripe for a "Fiscal Armageddon," and eventually overrun by foreigners. Perhaps a better film to highlight the horrors of debt piled up by Washington's current leaders: "The Texas Chainsaw Massacre."
www.marketwatch.com/
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Bozur
Amicus
Posts: 5,515
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Post by Bozur on Sept 22, 2008 23:39:27 GMT -5
Taxpayers Mad As Hell, And Not Going to Take This Anymore
money.cnn.com — US taxpayers may be on the hook for one of the biggest frauds in US history. Taxpayers are mad as hell about the US government's decision to bail out Wall St with $700 Billion US dollars leaving the taxpayer on the hook. Reminds me of the movie Network 1976 with everyone screaming "I'm Mad As Hell And I'm Not Going to Take This Anymore". More… (Business & Finance)
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Mad as hell - taxpayers lash out We asked you what you had to say about the bailout, and we heard you loud and clear: 'No way!'
By David Goldman, CNNMoney.com staff writer Last Updated: September 21, 2008: 5:28 PM EDT
NEW YORK (CNNMoney.com) -- "NO NO NO. Not just no, but HELL NO," writes Richard, a reader from Anchorage, Alaska.
"This is robbery pure and simple," Anna from Denver posted on CNNMoney.com's TalkBack blog this weekend.
"It's our money! Let these companies die," added Claudio from Plainville, Conn.
After President Bush petitioned Congress Saturday for the authority to spend up to $700 billion to to bail out a financial industry on the verge of collapse, he said the high price tag was not only justified, but essential.
"It is a big package because it's a big problem," Bush told reporters at a news conference. "The risk of doing nothing far outweighs the risk of the package."
But when asked what they thought of the government's proposal, most readers gave an overwhelming thumbs down.
"I'm tired of rewarding institutions and people for the bad decisions they have made," said Dean from Madison, Wis. "Sure, it will hurt tax payers if/when some of these institutions fail, but perhaps we need to let that happen. We do not need more big government involved in our lives. Enough is enough." Don't hand me the tab
Readers focused most of their indignation on having to foot the bill for irresponsible lenders and borrowers.
"Companies, like individuals, should be held responsible for their decisions," wrote Jorge from El Paso, Texas. "This buyout does not address the other problems in the pipeline such as personal credit default and market slowdowns in most industries. No new jobs will be created."
Paul from Portsmouth, N.H., said banks are getting the soft treatment when taxpayers are suffering.
"It is time for the financial institutions of this country to be called to the mat. We should be expecting and demanding responsible and ethical business practice, not rewarding it at the expense of taxpayers."
And John from Springfield, Va., said the government action actually hurts the people it is intended to help.
"The government does not have $700 billion dollars. WE have $700 billion, and it is being taken from us. If this is passed then the next administration and the next will be extracting this one from the people who are supposedly being protected by this bailout." Where's my bailout?
Other readers wanted to know why the government didn't spend the $700 billion investment on the majority of responsible Americans who are suffering because of the bad bets of the few.
"Why not take the billions and ... make funds available to home owners stuck in the loans these idiots created, marketed and sold," asked Don from Coarsegold, Calif. "It will put the money where it should be with the little guy who made a mistake, instead of the big guy who created the problem."
Jordan from Charlestown, Ind., asked why different rules applied to big banks and ordinary investors.
"Once I invested in something and lost money. Maybe I could just change the rules of investing so that my loss turns into a gain? Oh, I forgot only banks can do that!" Vote these jerks out
Some readers said it was time for the politicians who support the bailout to get the heave-ho come November.
"I will be watching to see which of our representatives vote for this bailout," said R. Kidd in Troy, N.C. "Let the American people see how many we can fire come election time."
And many readers, including Danny from Texas said we should stop typing and start dialing the lawmakers who are prepared to give the OK to the bailout.
"Call your Congressman. Stop blogging, posting comments, and call your congressman. This is the patriotic thing to do. Let them hear your opinion, show them this is still America and that you will not stand for this!!" A necessary sacrifice
But not all readers agreed. Some thought the bailout was an unfortunate but necessary move to rescue our financial system from collapse.
For instance, Bill from St. Louis said he changed his mind about the bailout when he realized the consequences of doing nothing.
"I was opposed to the bailout at first, but realized that the scope of this thing is global and so massive that the entire global economy could collapse if nothing was done. ...The priority has to be resolving the present crisis of confidence in our economy. Remember, if Wall Street collapses, Main Street will go with it."
Andy from Chicago said the cost to the taxpayer will not be what the headline number makes it seem.
"This money is not a handout to companies. It's simply giving banks and mortgage companies loans, since the banking system itself is too unstable to raise this kind of capital. And no, the government cannot just use the $700 billion to pay back all the citizens that will be hurt by this. If the companies like AIG fail, the cost will be far far greater than $700 billion. Wake up!!"
And Surfta from Brooklyn, N.Y., says the government action is really not a bailout at all.
"It's NOT a bailout. The government is not handing out cash, they actually stand to make a great deal of money out of this, which will trickle down to YOU. First priority should be to try to control and fix the problem, then regulate sufficiently to make sure this NEVER happens again." To top of page
First Published: September 21, 2008: 2:07 PM EDT money.cnn.com/
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Bozur
Amicus
Posts: 5,515
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Post by Bozur on Sept 30, 2008 0:03:40 GMT -5
Economist: Why Bankruptcy is Better than Wall Street Bailout
cnn.com — Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown. This bailout was a terrible idea. Here's why.More… (Business & Finance)
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Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.
CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.
This bailout was a terrible idea. Here's why.
The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.
Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.
This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.
Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets. Don't Miss
The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.
The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.
Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.
In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.
Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.
Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.
Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.
The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.
If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.
The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.
Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.
So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.
The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer. www.cnn.com/
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Post by chalkedon on Sept 30, 2008 6:52:31 GMT -5
Ron Paul predicted this meltdown 5 yrs ago...Not too mention the bail out warning he couldnt stress enough... www.cnn.com/2008/POLITICS/09/23/paul.bailout/Now CNN posts the obvious...God how I hate the mainstream media and politicians in the states...
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