Tuesday, June 29, 2010

FANNIE-FREDDIE Bailout Could Cost Taxpayers $1 Trillion...

http://www.cnbc.com/id/37982580

Published: Tuesday, 29 Jun 2010

By: Reported by Steve Liesman, written by Michelle Lodge

For American taxpayers, now on the hook for some $145 billion in housing losses connected to Fannie Mae and Freddie Mac loans, that amount could be just the tip of the iceberg.

According to the Congressional Budget Office, the losses could balloon to $400 billion. And if housing prices fall further, the cost to the taxpayer could hit as much as $1 trillion.

Two things are clear: Taxpayers don’t want to foot the bill, and Fannie and Freddie, taken over by the government in 2008 to stanch the financial bloodletting, need a major overhaul.

“Some of us who don’t even own homes are paying to support others and their home ownership, and they ask ‘why?’ said Robert J. Shiller, a Yale University economics professor and co-creator of the S&P/Case-Shiller Home Price Indices.

The indices measure the US residential housing market by tracking changes in the value of residential real estate both nationally and in 20 metropolitan regions.

Shiller added that the mission of Fannie and Freddie should be severely cut back “so that they’re not helping middle-class homeowners, [but] they’re helping poor people get into the housing market.”

At the crux of the financial crisis, the government took over Fannie and Freddie to avert possible massive losses for banks, money-market funds and, perhaps, most importantly, foreign institutions that purchased billions of Fannie and Freddie debt because of its implied government guarantee.

The Chinese, for example, had invested heavily, and the US decided it didn’t want them to take a loss on their investment.

One possible scenario for the entities is to turn them into utilities, said Sean Dobson, CEO and chair of Amherst Securities.

“Freddie and Fannie could be used to standardize the mortgage product,” Dobson said, “to completely describe what the risks are and then act as a conduit for the capital markets to take the risk.”

Thursday, June 10, 2010

An American working in Mexico (his experience)

From the other side of the fence...

Tom O'Malley, Director with S.W. BELL in Mexico City:

"I spent five years working in Mexico . I worked under a tourist Visa for three months and could legally renew it for three more months. After that you were working illegally. I was technically illegal for three weeks waiting on the FM3 approval.

"During that six months our Mexican and U.S. aattorneys were working to secure a permanent work visa called an 'FM3'. It was in addition to my U.S. passport that I had to show each time I entered and left the country. Barbara's was the same, except hers did not permit her to work.

"To apply for the FM3, I needed to submit the following notarized originals (not copies):

1. Birth certificate for Barbara and me.

2. Marriage certificate.

3. High school transcripts and proof of graduation.

4. College transcripts for every college I attended and proof of graduation.

5. Two letters of recommendation from supervisors I had worked for at least one year.

6. A letter from the St. Louis Chief of Police indicating that I had no arrest record in the U.S. and no outstandingwarrants, and was "a citizen in good standing".

7. Finally, I had to write a letter about myself that clearly stated why there was no Mexican citizen with my skills and why my skills were important to Mexico. We called it our 'I am the greatest person on Earth' letter. It was fun to write.

"All of the above were in English that had to be translatedinto Spanish and be certified as legal translations, and our signatures notarized. It produced a folder about 1.5 inches thick with English on the left side & Spanish on the right.

"Once they were completed Barbara and I spent about five hours, accompanied by a Mexican attorney, touring Mexican government office locations and being photographed and fingerprinted at least three times at each location, and we remember at least four locations where we were instructed on Mexican tax, labor, housing, and criminal law and that we were required to obey theirlaws or face the consequences. We could not protest any of the government's actions or we would be committing a felony. We paid out four thousand dollars in fees and bribes to complete the process. When this was done we could legally bring in our household goods that were held by U.S. Customs in Laredo, Texas. this meant we had rented furniture in Mexico while awaiting our goods. There were extensive fees involved here that the company paid."

"We could not buy a home and were required to rent at very high rates and under contract and compliance with Mexican law.

"We were required to get a Mexican driver's license. This was an amazing process. The company arranged for the licensing agency to come to our headquarters location with their photography and fingerprint equipment and the laminating machine. We showed our U.S. license, were photographed and fingerprinted again and issued the license instantly after paying out a six-dollar fee. We did not take a written or driving test and never received instructions on the rules of the road. Our only instruction was to never give a policeman your license if stopped and asked. We were instructed to hold it against the inside window away from his grasp.If he got his hands on it you would have to pay ransom to get it back.

"We then had to pay and file Mexican income tax annually using the number of our FM3 as our ID number. The company's Mexican accountants did this for us and we just signed what they prepared. It was about twenty legal size pages annually.

"The FM3 was good for three years and renewable for two more after paying more fees.

"Leaving the country meant turning in the FM3 and certifying we were leaving no debts behind and no outstanding legal affairs (warrants, tickets or liens) before our household goods were released to customs."

"It was a real adventure and if any of our Senators or Congressmen went through it once they would have a different attitudetoward Mexico.

"The Mexican government uses its vast military and police forces to keep its citizens intimidated and compliant.They never protest at their capitol or government offices, but do protest daily in front of the United States Embassy. The U.S. Embassy looks like a strongly reinforced fortress and during most protests the Mexican military surrounds the block with their men standing shoulder to shoulder in full riot gear to protect the Embassy. These protests are neaver shown on U.S. or Mexican TV. There is a large public park across the street where they do their protesting. Anything can cause a protest such as proposed law changes in California or Texas."

Please feel free to share this with everyone whothinks we are being hard on the illegals.

Why the USA is Bankrupt - Where we spend $333.8 Billion Each Year!

You think the war in Iraq is costing us too much? Read this:

I have included the URL's for verification of all the following facts...


1. $11 Billion to $22 billion is spent on welfare to illegal aliens each year by state governments.

Verify at: http://www.fairus.org/site/PageServer?pagename=iic_immigrationissuecenters7fd8



2. $2.2 Billion dollars a year is spent on food assistance programs such as food stamps, WIC, and free school lunches for illegal aliens.

Verify at: http://www.cis.org/articles/2004/fiscalexec.HTML



3. $2.5 Billion dollars a year is spent on Medicaid for illegal aliens.

Verify at: http://www.cis.org/articles/2004/fiscalexec.HTML



4. $12 Billion dollars a year is spent on primary and secondary school education for children here illegally and they cannot speak a word of English!

Verify at: http://transcripts.cnn.com/TRANSCRIPTS/0604/01/ldt..0.HTML



5. $17 Billion dollars a year is spent for education for the American-born children of illegal aliens, known as anchor babies.

Verify at http://transcripts.cnn.com/TRANSCRIPTS/0604/01/ldt.01.HTML



6. $3 Million Dollars a DAY is spent to incarcerate illegal aliens.

Verify at: http://transcripts.cnn.com/%20TRANSCRIPTS/0604/01/ldt.01.HTML



7. 30% percent of all Federal Prison inmates are illegal aliens.

Verify at: http://transcripts.CNN.com/TRANSCRIPTS/0604/01/ldt.01.HTML



8. $90 Billion Dollars a year is spent on illegal aliens for Welfare & social services by the American taxpayers.

Verify at: http://premium.cnn.com/TRANSCIPTS/0610/29/ldt.01.HTML



9. $200 Billion dollars a year in suppressed American wages are caused by the illegal aliens.

Verify at: http://transcripts.cnn.com/TRANSC%20RI%20PTS/0604/01/ldt.01.HTML



10. The illegal aliens in the United States have a crime rate that's two and a half times that of white non-illegal aliens. In particular, their children, are going to make a huge additional crime problem in the US .

Verify at: http://transcripts.cnn..com/TRANSCRIPTS/0606/12/ldt..01.HTML



11. During the year of 2005 there were 4 to 10 MILLION illegal aliens that crossed our Southern Border also, as many as 19,500 illegal aliens from Terrorist Countries.. Millions of pounds of drugs, cocaine, meth, heroin and marijuana, crossed into the US from the Southern border.

Verify at: Homeland Security Report:



12. The National policy Institute, estimated that the total cost of mass deportation would be between $206 and $230 billion or an average cost of between $41 and $46 billion annually over a five year period.'

Verify at: http://www.nationalpolicyinstitute..org/PDF/deportation.PDF




13. In 2006 illegal aliens sent home $45 BILLION in remittances to their countries of origin.

Verify at: http://www..rense.com/general75/niht.htm




14.. 'The Dark Side of Illegal Immigration: Nearly One million sex crimes Committed by Illegal Immigrants In The United States .'

Verify at: http: // www.drdsk.com/articleshtml http://ww/%MailScanner has detected a possible fraud attempt from "ww" claiming to be 20w.drdsk.com/articleshtml



The total cost is a whopping $ 338.3 BILLION DOLLARS A YEAR AND IF YOU'RE HAVING TROUBLE UNDERSTANDING THIS AMOUNT OF MONEY; IT IS $338,300,000,000.00 WHICH WOULD BE ENOUGH TO STIMULATE THE ECONOMY FOR THE CITIZENS OF THIS COUNTRY.


Are we THAT stupid? YES, FOR LETTING THOSE IN THE U.S.CONGRESS GET AWAY WITH LETTING THIS HAPPEN YEAR AFTER YEAR!!!!!

Debt under Obama increases $5 billion per day -- 3 times the Bush rate...

http://www.washingtontimes.com/news/2010/jun/2/federal-debt-tops-13-trillion-mark/

By Stephen Dinan
Wednesday, June 2, 2010

The federal government is now $13 trillion in the red, the Treasury Department reported Wednesday, marking the first time the government has sunk that far into debt and putting a sharp point on the spending debate on Capitol Hill.

Calculated down to the exact penny, the debt totaled $13,050,826,460,886.97 as of Tuesday, leaping nearly $60 billion since Friday, the previous day for which figures were released.

At $13 trillion, that figure has risen by $2.4 trillion in about 500 days since President Obama took office, or an average of $4.9 billion a day. That's almost three times the daily average of $1.7 billion under the previous administration, and led Republicans on Wednesday to place blame squarely at the feet of Mr. Obama and his fellow Democrats.

"A $13 trillion debt is an alarm bell and a wake-up call combined, but Democrats are not even trying to pass a budget," said House Minority Leader John A. Boehner, Ohio Republican. "How out of touch can Washington Democrats get? Instead of continuing to pay lip service to this issue, President Obama should call on congressional Democrats to pass a budget that provides the fiscal discipline economists say is needed to create jobs and grow our economy."

The White House would not comment for the record, but an official speaking on the condition of anonymity said the administration is "committed to restoring fiscal responsibility."

Spokesmen for the Democratic chairmen of the House and Senate budget committees didn't return messages Wednesday.

In the budget he submitted to Congress in February, the president acknowledged that his plans are not enough to reduce annual deficits to sustainable levels, which he said amounted to a yearly shortfall of 3 percent of gross domestic product. Mr. Obama called for a fiscal commission to make recommendations to close the gap, and commission members at their meeting last week said even that may not be enough.

"I think we've got to be more ambitious than that," said Alice Rivlin, former director of the Congressional Budget Office. "We really have to pick a trajectory that has the debt coming down. And there's probably no magic of whether it comes down 1 percent a year or 2 percent a year or whatever. But it's got to come down over time."

Underscoring the challenge of finding balance, Congress has not been able to pass a fiscal 2011 budget. The Senate Budget Committee has approved a proposed budget, but it has not been debated on the Senate floor, and House Democratic leaders have indicated that they may give up debt reduction altogether this year.

Several unofficial debt clocks had shown the debt crossing the $13 trillion threshold a week ago, though Treasury said those numbers were not official. Those clocks regularly recalibrate using Treasury numbers, but estimate growth rates in order to provide a per-second update on websites.

Treasury, meanwhile, reports numbers once a day and posts figures for the prior day. There was no figure for Monday because it was a federal holiday.

Total public debt includes two pots of money. One is normal government debt in the form of Treasury bills and bonds held by consumers, while the other is intragovernmental holdings, or money one part of the government borrows from another agency. That includes money borrowed from the Social Security trust funds.

Some analysts say the key measure is not the total public debt, but the debt in the hands of consumers.

That figure stood at $8.573 trillion on Tuesday, having jumped nearly $80 billion from Friday's number. By comparison, that one-day jump is well more than the $59 billion emergency war-spending bill that the Senate passed last week.

Mr. Obama charged the fiscal commission with finding ways to limit that number to 75 percent of gross domestic product.

The other half of the equation, intragovernmental debt to trust funds and the like, totaled $4.478 trillion as of Tuesday - a drop of about $20 billion from Friday's report.

The $13 trillion debt number is not significant other than that it's another milestone, but its tolling shows just how much debt has been amassed in a short time.

It took 197 days for the debt to rise from $12 trillion to $13 trillion, which is the second shortest trillion-dollar rise in history. The fastest trillion came at the end of 2008 and early 2009, when the Wall Street bailout created giant new obligations.

Congressional members and staffers, particularly on the Republican side, took a macabre interest as the debt flirted with $13 trillion all last week. Some lawmakers even jumped the gun in putting out statements based on the unofficial debt clocks.

At $13 trillion, that works out to an obligation of more than $42,000 for every U.S. resident.

"Throughout history, excessive debt has led to the demise of great nations," said Sen Tom Coburn, Oklahoma Republican. "This milestone should be a wake-up call for Congress. No one will bail out America if we continue to live beyond our means."

Earlier this year, Congress and Mr. Obama raised the country's debt limit to $14.3 trillion, hoping it would give the government enough room to spend through the end of this year.

© Copyright 2010 The Washington Times, LLC. Click here for reprint permission.

Soaring costs force Canada to reassess health model

http://news.yahoo.com/s/nm/20100531/hl_nm/us_health_3

By Claire Sibonney - Analysis Claire Sibonney
Mon May 31, 2:38 pm ET

TORONTO (Reuters) – Pressured by an aging population and the need to rein in budget deficits, Canada's provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

Ontario, Canada's most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate "incentive fees" to generic drug manufacturers.

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit -- an idea that critics say is an illegal user fee.

And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.

It's likely just a start as the provinces, responsible for delivering healthcare, cope with the demands of a retiring baby-boom generation. Official figures show that senior citizens will make up 25 percent of the population by 2036.

"There's got to be some change to the status quo whether it happens in three years or 10 years," said Derek Burleton, senior economist at Toronto-Dominion Bank.

"We can't continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

"At some stage we're going to hit a breaking point."

MIRROR IMAGE DEBATE

In some ways the Canadian debate is the mirror image of discussions going on in the United States.

Canada, fretting over budget strains, wants to prune its system, while the United States, worrying about an army of uninsured, aims to create a state-backed safety net.

Healthcare in Canada is delivered through a publicly funded system, which covers all "medically necessary" hospital and physician care and curbs the role of private medicine. It ate up about 40 percent of provincial budgets, or some C$183 billion ($174 billion) last year.

Spending has been rising 6 percent a year under a deal that added C$41.3 billion of federal funding over 10 years.

But that deal ends in 2013, and the federal government is unlikely to be as generous in future, especially for one-off projects.

"As Ottawa looks to repair its budget balance ... one could see these one-time allocations to specific health projects might be curtailed," said Mary Webb, senior economist at Scotia Capital.

Brian Golden, a professor at University of Toronto's Rotman School of Business, said provinces are weighing new sources of funding, including "means-testing" and moving toward evidence-based and pay-for-performance models.

"Why are we paying more or the same for cataract surgery when it costs substantially less today than it did 10 years ago? There's going to be a finer look at what we're paying for and, more importantly, what we're getting for it," he said.

Other problems include trying to control independently set salaries for top hospital executives and doctors and rein in spiraling costs for new medical technologies and drugs.

Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.

"Our objective is to preserve the quality healthcare system we have and indeed to enhance it. But there are difficult decisions ahead and we will continue to make them," Ontario Finance Minister Dwight Duncan told Reuters.

The province has introduced legislation that ties hospital chief executive pay with the quality of patient care and says it wants to put more physicians on salary to save money.

In a report released last week, TD Bank said Ontario should consider other proposals to help cut costs, including scaling back drug coverage for affluent seniors and paying doctors according to quality and efficiency of care.

WINNERS AND LOSERS

The losers could be drug companies and pharmacies, both of which are getting increasingly nervous.

"Many of the advances in healthcare and life expectancy are due to the pharmaceutical industry so we should never demonize them," said U of T's Golden. "We need to ensure that they maintain a profitable business but our ability to make it very very profitable is constrained right now."

Scotia Capital's Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. "(The public) will use the services more wisely if they know how much it's costing," she said.

"If it's absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?"

But change may come slowly. Universal healthcare is central to Canada's national identity, and decisions are made as much on politics as economics.

"It's an area that Canadians don't want to see touched," said TD's Burleton. "Essentially it boils down the wishes of the population. But I think, from an economist's standpoint, we point to the fact that sometimes Canadians in the short term may not realize the cost."

($1=$1.05 Canadian)

(Reporting by Claire Sibonney; editing by Janet Guttsman and Peter Galloway)

OBAMA REDISTRIBUTION OF WEALTH VICTORY: PRIVATE PAY PLUMMETS, GOVT HANDOUTS SOAR:

http://www.usatoday.com/money/economy/income/2010-05-24-income-shifts-from-private-sector_N.htm

5/26/2010

By Dennis Cauchon, USA TODAY

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.

The recession has erased 8 million private jobs. Even before the downturn, private wages were eroding because of the substitution of health and pension benefits for taxable salaries.

The Bureau of Economic Analysis reports that individuals received income from all sources — wages, investments, food stamps, etc. — at a $12.2 trillion annual rate in the first quarter.

Key shifts in income this year:

• Private wages. A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

•Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees.

The shift in income shows that the federal government's stimulus efforts have been effective, says Paul Van de Water, an economist at the liberal Center on Budget and Policy Priorities.

"It's the system working as it should," Van de Water says. Government is stimulating growth and helping people in need, he says. As the economy recovers, private wages will rebound, he says.

Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. "People are paid for being rather than for producing," he says.