Showing posts with label deficits. Show all posts
Showing posts with label deficits. Show all posts

Sunday, January 28, 2018

The Onrushing State Government Pension Fiscal Crisis and Tsunami

Several days ago we posted a post that discussed the impending fiscal collapse of the state governments in New Jersey and California. These impending collapses are due to the reality that state politicians in those states continued to cater to state government union members in order to get their votes at election time. As a result, we have a system in many states that has a ton of unfunded liabilities based on the promises of robust retirement pensions and health care for retired state government employees and union members. That post can be accessed at:

https://loathemygovernment.blogspot.com/2018/01/california-and-new-jerseys-impending.html

But according to a National Review article by Lewis M. Andrews on January 26, 2018, these two states are not the only states that have been led to the brink of insolvency by state politicians and that brink is not that far away:

  • In Illinois, a recent law went into effect that allows the state Comptroller to seize any Illinois town or country’s share of sales, excise, or other taxes if that town or county does not keep up its pensions payments and contributions.
  • This obviously will result in other budget lines of a town or county to go down which will result in less government services to those citizens in those towns and counties.
  • For example, Mattoon city officials have already said that they will get rid of ambulance services in order to make up for the lost tax revenue going into pension funding, funding that is half a million dollars more this year than last year.
  • Normal, Illinois is going to raise property taxes to make up its pension contribution shortfall.
  • East St. Louis, Illinois may see its ENTIRE tax money confiscated by the state to fulfill its pension requirements, leaving it nothing at all for ANY other government service, police, fire, ambulance, schools, etc.
  • But the problem of unfunded pension and retirement liabilities, estimated by some to be as high as $6 TRILLION, is not restricted to Illinois, New Jersey and California.
  • Florida towns and cities will have to pony up an incremental $178.5 million in the their upcoming budgets to cover their pension liabilities for government retirees.
  • The San Diego school district is asking parents of its kids which services they would prefer to get cut in order to make up their contributions to California’s deeply indebted pension system.
  • Fulton, Kentucky has already cut back its hospital and ambulance services and still faces an annual $114,000 annual pension shortfall.
  • To cover the current deficits, Connecticut would have to raise overall taxes by 14% and New Jersey would have to raise taxes a whopping 26%.

Seriously bad financial conditions and yet rather than fix the root causes of the pension problem, as always, politicians have resorted to tricks, gimmicks, and lies to cover up the impending disasters:

  • In 2016, San Francisco’s Bay Area Rapid Transit (BART) subway system sought voter approval to bond $3.5 billion in infrastructure improvements even though the needed upgrade was already covered by an ongoing capital fund, causing speculation that the $3.5 billion would be secretly diverted to cover pension expenses.
  • Former New Jersey Governor Christie Christie and General Assembly Speaker Vincent Prieto agreed to a shell game that made the state lottery an asset of the pension fund which, while it would help reduce the pension fund deficit, it would rob other state government functions of the funds it currently gets from lottery proceeds.
  • California Sonoma County voters recently shot down a proposal to increase the sales tax increase because it was suspected the increase would be only funneled into the local pension fund deficit.
And keep in mind these deficits and funding shortfalls have occurred during a record stretch of positive economic results, we have not had a recession in almost ten years. You can imagine what is going to happen when the economy eventually dips into a recession.

Politicians making bad promises that they cannot fulfill just to ensure their careers and cushy pay checks, pensions and benefits are protected and prolonged. It is going to be a rocky ride, probably sooner than later, when it comes to government's reckoning of its fiscal condition and insanity. And not a politician, or leader, in sight, who has the gumption and courage to do the right thing. 

Term limits anyone?

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org
http://www.bankruptingamerica.org

http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w






Wednesday, August 2, 2017

August, 2017, Part 2,Political Class Insanity: MIsmanaging Taxpayer Wealth From Texas To Kentucky

It is the beginning of another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

1) According to Elizabeth Harrington, writing for the Washington Free Beacon on July 26,2017, the Housing and Urban Development (HUD) entity of the Federal government has been very busy wasting taxpayer money in a very original way:
  • According to a HUD inspector general report, the organization spent over $800,000 on apartments for people who “did not exist.
  • And this was in just one housing complex (Beverly Place) in one county in Texas.
  • Apparently, housing managers at the housing complex defrauded the government and taxpayers by stealing the identities of former tenants and falsifying incomes.
  • According to the inspector general’s findings: "Beverly Place's owner did not administer its project-based Section 8 program in accordance with HUD regulations. Specifically, the owner billed HUD for at least 97 tenants who did not exist or whose income eligibility was either falsified or unsupported."
  • These so-called “ghost tenants” are people who either never lived in the apartment building or were past tenants who had moved out.
Fortunately, this fraud was uncovered, the people responsible are looking at prison time, and the government is going after the owners of the apartment complex to recoup the money illegally paid out. But did I mention this was only one housing complex in one county? I believe there are over 3,000 counties across the country, how much other fraud do we think the American taxpayer is paying for in the other thousands of counties? Insanity.

2) Okay, HUD seems to be doing a good job of misusing taxpayer wealth but let’s rest assured it is not the only government entity that is inefficient and ineffective in executing its duties. Consider an article by Kelsey Harkness, writing for the Heritage Foundation on July 21,2017, concerning an Obama administration Commerce Department job program:
  • A Federal job training program that was supposed to train residents of Kentucky’s coal country to become computer code writers has succeeding in only placing 17 residents into tech jobs at a cost of $2 million. 
  • This means it cost well over $100,000 per person placed in a job, hardly an efficient use of training funds.
  • The program was supposed to spend $4.5 million through 2019 to train up to 200 people from an economically struggling region of Kentucky, or a job placement cost of $22,500 per placement.
  • Instead, less than 9% of the 200 have been trained at a cost that was about five times more expensive than planned.
  • Interapt, the company supposed to do the training and receive the Federal funding is closing up shop in Kentucky two years before the program was to end.
  • Former students did not have kind words for Interapt: “Interapt was kind of smart,” one woman who participated in the training program said. “They preyed upon underemployed and unemployed people because we were vulnerable.”
  • Another former student: “It was a light at the end of a dark tunnel for me, a way to rise up out of the poverty my family has lived in for years and make a bright future for my wife and kids. Now it is a shattered dream.”
  • Another student: “It was like a bad joke poorly told, it felt unreal. I never would have imagined that I’d be asked out. I’d poured my heart into this program.”
Despite this massive failure of employment and taxpayer money, the company is trying to expand its program to other parts of the country while again tapping into Federal and state government money. And this is probably just one of many, many other failed job programs that the American taxpayer is funding for missed objectives and the dashing of hopes of desperate Americans everywhere.

3) Washington Democrats did a horrific job running the economy at the beginning of the Obama administration when they had control of the White House and both houses of Congress. As a result, they ran up four consecutive years of annual trillion dollar Federal government spending deficits, the first time any administration came close to exceeding an annual trillion dollar deficit. 

They put the country on a path that would double the national debt from $10 trillion to almost $20 trillion in short eight years. In other words, during the Obama reign, the Federal government overspent its tax revenue stream by about the same amount that ALL previous administrations had overspent their tax revenue streams.

Given this insanely bad handling of the Federal government budget, it should come as no surprise that we now find out that the Democratic National Committee (DNC) is flat broke. In fact, according to reporting by the New York Observer and Federal government documents, the Democrats nationally are $3.3 million in debt. The DNC has $7.4 million in bank accounts as assets but owes over $10 million in expenses.

Bottom line: if you cannot efficiently and effectively manage millions of dollars under your own direct control, how can you expected to efficiently and effectively manage trillions of dollars of the Federal government? Given the past years of ever mounting national debt and fiscal mismanagement, you cannot be expected to manage either money streams.

So what did we learn today: HUD cannot manage taxpayer wealth, the Commerce Department, the government entity responsible for the Kentucky training fiasco above, cannot manage taxpayer wealth, and the Democrats cannot manage their own wealth. Strike one, strike two, strike three, the taxpayer loses. More insanity to follow.


Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:


www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org

http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w






Tuesday, September 6, 2016

September, 2016, Political Class Insanity, Part 2: The Looming Debt Disaster.Pentagon Credit Card For Strip Joints,and MOre

It is the beginning of another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

The current monthly record for the number of days that were needed to cover one month's worth of insanity is ten. We almost equaled that record last month when we needed nine days to cover one month’s worth of political class insanity. There is a very good chance that the ten day record could fall this month since as we get closer and closer to the election, the volume of ineptness grows almost exponentially. 

But today and for all of the posts this month, let’s start off with a welcome piece of honest political dialog. It comes from a State Department spokesperson.Mark Toner, who is about to start the daily State Department press briefing. In a joking matter, he makes the following quote: "Welcome to the State Department. I think we have some interns in the back. Welcome. Good to see you in this exercise in transparency and democracy." 

He then bursts out laughing at his own quote, indicating he also knew what a joke the Obama administration has been, especially Mr. Toner’s State Department, when it comes to cover ups, lack of transparency, denial of Freedom of Information Act requests, the prosecution of whistleblowers, etc. But at least it was a little refreshing to finally hear some actual honesty out of Washington as we see from the actual clip of the news conference:


With that context of honesty, let’s see what other insanity has been going down:

1) Yesterday, we discussed the scandal where the Pentagon had lost over $6.0 TRILLION over the years, trillions that could not be properly accounted for by the auditors. Today we get an idea where a little of that money may have ended up. According to a recent Washington Free Beacon article by Morgan Chalfont, a recent analysis of government issued credit cards to Pentagon employees found that those cards were often used for personal expenses at casinos and stip clubs.

Details of the misuse of the credit cards included the following:
  • A sampling of credit card usage found that almost two dozen Pentagon employees charged $8,544 to their government credit cards for personal use, of which some of those dollars were obtained by using ATMs at casinos.
  • This came out in a follow up audit from 2015 where the inspector general found that over $1 million had been improperly charged to government credit cards by Pentagon employees.
  • The latest inspector general probe confirmed that Pentagon management had not taken enough appropriate action after the first audit found the misspending.
  • One Navy civilian employee was found to have misspent almost $30,000 of taxpayer wealth at casinos and other locations even though that employee had been explicitly identified in the first audit.
  • In addition, the latest audit found that of the 29 employees reviewed, 22 were improperly reimbursed for 131 vouchers totaling $8,544 during the review period. Thus, over 70% of those audited had misused their government credit cards.
  • The original audit found that 4,427 improper credit card transactions totalling $952,258 were done at casinos and 900 transactions were done at “adult entertainment establishments” between July 2013 and June 2014.
Now we at least know where some of the lost $6.0 TRILLION ended up. The frustrating thing is that the Pentagon management was told what was going on as a result of that first audit and the second audit found virtually no improvements in behavior had occurred. Insane.

2) Let’s stay in the defense area for this next piece of insanity. According to a recent article on the Freedom Post website, written by Tim Brown on August 23, 2016, a Federal judge recently sentenced Wenxia Man, a California citizen and a naturalized citizen, to jail for trying to illegally export military equipment to a foreign nation.

But she was not trying to export a few rifles or grenades. Federal prosecutors presented evidence that she was trying to send F-135, F-22 and F-16 engines from Air Force fighter jets to China as well an MQ-9 Reaper drone aircraft, worth = $50 million. She was caught in a Federal law enforcement undercover operation before she could ship any military hardware to a “technology spy” in China.

The pure insanity of this situation is that despite trying to ship major military equipment and military secrets to a foreign, semi-hostile power, she was given only four years in prison. Are you kidding me? People selling marijuana get more jail time and in no way do they endanger our national security like this woman tried to do. Talk about bad law enforcement and judicial priorities and penalties. Insane.

3) We recently did a dedicated post that showed how bad the Obama administration and the Washington political class had handled our country’s economic affairs over the past eight years or so:

XXXXX

Despite the favorable tailwinds of a massive economic stimulus program, low energy costs, and trillions of dollars pumped into the economy by the Federal Reserve, the resulting economic results were historically anemic and pathetic. Low overall economic growth, stagnant wage growth, doubling of the national debt, various unemployment problems, etc. were the result of their ineptness.

And those results are not getting any better, as outlined in a recent Washington Free Beacon article by Ali Meyer on August 26, 2016. That article reported that the U.S. economy expanded at a pathetic rate of 1.1% in the second quarter of 2016, a downward revision from the original estimate. This second quarter, 2016 growth in the GDP was much lower than the same period in 2015 when the quarterly growth was a more respectable 3.7%.

Thus, the worst economic recovery in the possibly the past 80 years continues with the Washington political class having no idea how to bust out to a more robust economic environment.

4) It is no secret that the Obama administration and its economic mismanagement has resulted in:
  • The doubling of the national debt in eight years.
  • Four consecutive years of having an annual Federal budget deficit of over a trillion dollars.
  • So far, incurring the seven highest annual Federal budget deficits in the history of the country.
  • Raising the national debt to annual total GDP ratio to over 100% from only 60% when Obama took office.
  • Horrific budget management that will burden future generations of Americans with really heavy debt loads and interest payments.
And according to a recent Heritage Foundation article by Michael Sargent on August 24, 2016, this situation is not about to change any time soon:
  • The budget deficit in 2016 is likely to rise again after falling for a few years down, from the whopping trillion dollar deficits earlier in the Obama Presidency.
  • Not only are the budget deficits likely to start rising again but a recent analysis from the Congressional Budget Office (CBO) predicted that this year’s budget deficit will be $50 billion higher than they last estimated.
  • This year’s budget deficit is now estimated at $590 billion, a deficit that would require every U.S.household to pay an additional $5,000 or so in incremental income taxes to cover.
  • This is a 35% deficit increase in just one year from 2015 to 2016.
  • The CBO expects trillion dollar deficits to return by as soon as 2024 unless Washington gets its act together.
  • Within ten years, at the current spending rate, the national debt load will be up to $28 TRILLION, almost triple what it was when Obama took office.
  • If interest rates jump up unexpectedly, then the debt increase would be even more dramatic.
  • And no amount of tax increases will overcome the anticipated spending increases of the Federal government.
  • Only four spending categories, Social Security, Medicare, Medicaid, and interest on the debt will eat up the majority of Federal government spending, going from 69% of the Federal budget today to 77% in ten years.
  • Think about that last number: three out of every four dollars spent in ten years will be on these programs with far less left for the military, infrastructure improvements, welfare assistance, education, and other functions.
  • Annual interest on the national debt by itself will triple over the next ten years. 
The good news, which is really bad news, is that we are likely to see the collapse of the economy and the country long before we reach these horrid milestones. 

Thus, what Hitler, Stalin, Putin, Mussolini, and many others could not do to us, we are likely to do to ourselves because no one in Washington or on the campaign trail wants to talk honestly about what needs to be done to prevent this fiscal meltdown. Not Trump, not Hillary, not any Democrat or Republican Congressional person running for office. 

The insanity is that problem is right there in black and white numbers and no one in the political class has the nerve, the courage, the smarts, or the will to fix what is the biggest issue facing the country today: runaway government spending and waste. So sad.

Two days into the insanity and we already see the highly probable end of the republic. Imagine what the rest of the insanity that still needs to be covered in the coming days.


Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:


www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org

http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w








Friday, September 25, 2015

Retro 5: Who Really Caused The Great Recession? Part 1 - "Duped America" Highlights

Given family engagements in town this week, we will be rerunning some of our most popular posts, posts that have garnered the most attention and which showed that we are currently enduring the worst set of politicians America has ever had.

MONDAY, MAY 14, 2012


Who Really Caused The Great Recession? Part 1 - "Duped America" Highlights

One character flaw about President Obama that constantly bugs me and which we have discussed many times before in this blog (see:http://loathemygovernment.blogspot.com/2009/08/blame-game-part-2.html), is his refusal to accept any responsibility for the failures of his administration. In his mind, the mostly non-existent accomplishments of his Presidency are due to a variety of external forces including:

- His favorite whipping boy excuse, the Bush administration. Never mind that the country's economy really started to come apart (soaring unemployment and soaring national debt and budget deficits when the Democrats, Nancy Pelosi, and Harry Reid took over Congress in 2007 after the 2006 midterm elections), as the following graphs illustrate (double click on the graphs to get a bigger picture):















- The Japanese tsunami.
- ATM machines.
- Europe's financial woes.
- The Arab spring, which increased oil prices.
- Wall Street
- Banks
- Congress.
- Republicans, even though from 2007 through the end of 2011 the Democrats controlled 80% of the Federal government:










There is any old saying that goes as follows: "Don’t tell me how rocky the sea is, just bring the darn ship in." Obama has never understood this concept. No one forced him to be President. Any good manager coming into a new job should assess what the situation is and then try to progress from that point.

That is what leaders do, they look forward. Obama continues to look back to blame anyone or any organization for the failures and inadequacies of his administration. Rather than focus on the future and how to get there, he wastes time and energy to cover his own shortcomings. Blaming others in the past does not calm the seas he inherited and does not bring in the darn ship.

But if he honestly did look into the past, which I doubt he is capable of doing, he would not like what he sees. In the next two days we will present an argument that says the Great Recession was not caused by the following factors:

  • The Bush administration
  • The Japanese tsunami
  • ATM Machines
  • Europe's financial woes
  • The Arab Spring
  • Republicans in Congress
  • Republicans in general
  • Wall Street
  • Banks
What really caused the Great Recession and the destruction of wealth, high unemployment, and general economic malaise that still haunts us today, were Washington Democrats. It was not Wall Street, it was not greedy banks, it was not Bush, it was not Republicans, etc.

It was purely and simply the insistence of Democrats in Washington that home ownership in predominantly Democratic voting areas be made easier to accommodate. That was the single root cause of all of our current economic troubles. Sure, Wall Street banks took advantage of the situation for a while to make big profits. Sure, mortgage lenders made shady deals to close mortgages and make their money upfront.

But as we will try to prove over the next two days, based on experts in the industry, none of this happens without the aiding and abetting by Obama's fellow Democrats and Obama himself. His career profited politically by allowing the malfeasance to continue until the crash, an economic crash that wiped out banks, mortgage dealers, construction jobs, home building companies, housing equity wealth, stock market wealth, job growth, etc.

Today we will review the work of Richard Bernstein who has written a book called "Duped America." According to his bio on his website:


Author Richard Bernstein, a former lifelong Democrat, has organized this masterpiece into 31 short easy-to-read chapters. In each and every chapter Bernstein explains how the Democrat Party and their allies in the Mainstream Media have repeatedly attempted to dupe Americans. Each chapter is filled with enough facts to allow you to become more than just knowledgeable about each subject. Duped America is so thoroughly researched it has almost 1,000 footnotes.


Included below is a chapter from the book that he allows anyone to download from his website and thus, I am pretty sure he would not have a problem with me including it here. I am referencing his work since many of the statistics and historical facts he refers to I have already confirmed in previous posts in this blog, making me feel comfortable enough that he has his sources and statistics correct.

The chapter he allows people to download concerns the decades of housing policy abuses by Democrats in Washington that eventually led to the Great Recession. Let me list a few highlights/excerpts from the chapter before you read it in total and let me know what common thread Mr. Obama would realize if he read the chapter himself (the link to Mr. Berstein's website can be accessed viahttp://www.dupedamerica.com/):

  • Democrats created the lax mortgage policies that precipitated the crisis while simultaneously stifling Republican efforts to prevent it.
  • The history of the crisis started with the Community Reinvestment Act (CRA), signed into law by Democrat President Jimmy Carter in 1977.
  • When Democrat Bill Clinton became President in 1992, he broadened the Community Reinvestment Act in ways Congress had never intended.
  • When the Republicans attempted to restore fiscal sanity by paring back the CRA, they were stymied by Democrats.
  • Democrats such as Barney Frank (D-MA), Ted Kennedy (D-MA) and Maxine Waters (D-CA) allied with the Clinton administration to broaden the acceptability of these risky mortgage loans.
  • In 1995, an unrestrained ClintonDemocratic administration announced a comprehensive strategy to push home ownership in America to new heights – regardless of the compromise in credit standards that this would require.
  • Democrat Clinton legalized the securitization of these mortgages, which allowed Fannie and Freddie to finance everything by buying loans from banks, then repackaging and securitizing them for resale on the open market.
  • Fannie Mae and Freddie Mac were big campaign donors, with the bulk of their money going to Democrats.
  • Between 1989 and 2008, the leading recipient of Fannie/Freddie campaign money was Connecticut Democrat Chris Dodd, the Senate Banking Committee Chairman, who collected more than $165,000. In second place was then-Democrat Senator Barack Obama, who, in just three years in the U.S. Senate, took in $126,000. Third, was MassachusettsDemocrat John Kerry, who received $110,000.
  • Since the 1990s, Fannie Mae and Freddie Mac have been run by Democrat appointees.
  • From 1991 to 1998, Fannie Mae was led by James Johnson, a long-time aide to formerDemocrat Vice President Walter Mondale.
  • Johnson’s successor as head of Fannie Mae, Franklin Raines, had previously served as a budget director to Democrat President Bill Clinton.
  • In July 2003, Senators Chuck Hagel (R-NE), Elizabeth Dole (R-NC) and John Sununu (R-NH) introduced legislation to address regulation of them [Fannie Mae and Freddie Mac]. The bill was blocked by theDemocrats.
  • But the legislation [which was reintroduced in 2005] didn’t become law for a single reason:Democrats opposed it on a party-line vote in the Senate Banking Committee.
  • Rep. Artur Davis (D-AL) now admitsDemocrats were in error.
Obviously, the common theme is that the seeds for the destruction of the housing market which led to the destruction in the banking industry which led to high unemployment was planted long ago and tended to fruition by Democratic Presidents, Congressmen, and bureaucrats.

But these are just the headlines. If you really want to be depressed, please read the following downloaded chapter from Mr. Bernstein. The details are far worst according to his research and writings. The political class selfishness, personal enrichment, and abuses of power make their duping of us even more egregious.

****************************
MORTGAGE CRISIS…

Americans wondering who was responsible for the mortgage crisis should ask themselves a question: is owning a home a privilege or a right? Despite the meltdown in 2008, the seeds for the mortgage crisis were sown much earlier by a Democrat Party long convinced home ownership was an entitlement.

As this chapter shows, once that basic premise became conventional wisdom, it was all downhill from there. If one listens to the mainstream media and many Democrats, the blame for the mortgage crisis rests with the Republicans and the Bush administration. They’ve convinced the public that Democrats had nothing whatsoever to do with our current financial woes.

Precisely the opposite is true: Democrats created the lax mortgage policies that precipitated the crisis while simultaneously stifling Republican efforts toprevent it. The history of the crisis started with the Community Reinvestment Act (CRA), signed into law by Democrat President Jimmy Carter in 1977.

The law was designed to foster home ownership in low-income communities by pushing banks to aggressively lend to low and moderate income people. At first, it was easy to comply with the CRA. Banks merely had to demonstrate that they did not discriminate in making loans in poor and black neighborhoods.

When Democrat Bill Clinton became President in 1992, he broadened the Community Reinvestment Act in ways Congress had never intended. In 1995, rather than submit legislation that the Republican-led Congress was certain to reject, Clinton bypassed Congress entirely, ordering the TreasuryDepartment to rewrite the CRA rules.

 As a result, banks were forced to fulfill loan “quotas” in low income neighborhoods. That wasn’t the only problem. CRA also allowed community activist groups such as ACORN (Association of Community Organizations for Reform Now), for whom Barack Obama once worked in Chicago, and NACA (Neighborhood Assistance Corporation of America) to file complaints that could affect a bank’s CRA rating.

Failure to comply with CRA or a bad rating meant a bank might not be allowed to expand lending, add new branches or merge with other companies. Banks with poor CRA ratings were also hit with stiff fines. This rewrite of CRA gave activist groups like ACORN and NACA unprecedented power. Protests often held in bank lobbies or in front of the homes of bank officials, coupled with threats of litigation, allowed these groups to extort huge sums of money from financial institutions.

In response, financial institutions began allocating more funds to low-income, high risk borrowers.Loans started being funded on the basis of race and often little else. CRA became an excuse for lowering credit standards.

Many Democrats have claimed that banks subject to the CRA represented few of the mortgages that led to our current problems. Not true. Nearly 4 in 10 subprime loans made between 2004 and 2007 were funded by CRA-covered banks such as Washington Mutual and Indy Mac. Many other subprime lenders not covered by the Act were, in effect, beholden to CRA mandates because they were owned by banks that were subject to it.

Since CRA only covered banks, the Clinton administration created a separate department at Housing and Urban Development to police “fair lending” policies at other institutions such as Countrywide and lending behemoths, Fannie Mae and Freddie Mac.

The result? Countrywide made more loans to minorities than any other lender, and not surprisingly, was one of the first lenders overwhelmed by loan defaults. As groups like ACORN ran their intimidation campaigns against local banks, they eventually hit a roadblock. Banks told them they could afford to reduce their credit standards by only a little – since Fannie Mae and Freddie Mac refused to buy up these risky loans for resale on the secondary market.

ACORN realized that unless Fannie and Freddie were willing to relax their credit standards as well, local banks wouldn’t make enough loans to individuals with bad credit histories or with very little money for a down payment. Democrats such as Barney Frank (D-MA), Ted Kennedy (D-MA) and Maxine Waters (D-CA) allied with the Clinton administration to broaden the acceptability of these risky mortgage loans. When the Republicansattempted to restore fiscal sanity by paring back the CRA, they were stymied by Democrats — and by ACORN.

In 1995, an unrestrained Clinton administration announced a comprehensive strategy to push home ownership in America to new heights – regardless of the compromise in credit standards that this would require. Fannie and Freddie were given massive subprime lending quotas, which would increase to about half of their total business by the end of the decade.

Then came the single most catastrophic decision leading to the housing crisis: Clinton legalized the securitization of these mortgages, which allowedFannie and Freddie to finance everything by buying loans from banks, then repackaging and securitizing them for resale on the open market.

Thus, began the meltdown. In 1997, Bear Stearns handled the first securitization of CRA loans — $385 million worth — all guaranteed by Freddie Mac. Subsequently, a subprime market that had been a relatively modest part of the mortgage business with $35 billion in loans in 1994 soared to $1 trillion by 2008.

Regrettably, this massive bundling of subprime mortgages wound up poisoning the entire mortgage industry. Fannie and Freddie used their “affordable housing mission” to avoid restrictions on their accumulation of mortgage portfolios. They arguedthat if they were constrained, they wouldn’t be able to adequately subsidize affordable housing. As a result, by 1997, Fannie was offering mortgages witha down payment of only 3 percent. By 2001, it was purchasing mortgages with “no down payment at all.”

 By 2007, Fannie and Freddie were required by Housing and Urban
Development to show that 55 percent of their mortgage purchases were to low and moderate income borrowers, and, within that goal, 38 percent of all purchases were to come from underserved areas (usually inner cities).

Meeting these goals almost certainly required them to purchase loans with low down payments and other deficiencies that would characterize them assubprime or Alt-A. The decline in lending standards was also facilitated by competition. Fannie and Freddie were now competing with private-label mortgage lenders such as investment and commercial banks to fulfill the affordable housing requirements imposed by Congress.

The inevitable result? Everyone was scraping the bottom of the mortgage barrel in search of new borrowers. Once the looser lending standards were offered to low and middle income buyers, it was naïve to believe that they wouldn’t lead to more relaxed standards for higher-income and prime borrowers as well. This spreading of looserstandards to the prime market greatly increased the availability of credit for mortgages, and ultimately led to the bubble in housing prices.

Unsurprisingly, Fannie Mae and Freddie Mac were huge campaign
contributors to Congress, spending millions to ensure no reform would be implemented to restrict them. In all, 354 members of Congress receivedfunds. The bulk of the money went to Democrats.

Between 1989 and 2008, the leading recipient of Fannie/Freddie campaign money was ConnecticutDemocrat Chris Dodd, the Senate Banking Committee Chairman, who collected more than $165,000. Dodd opposed restrictions on Fannie and Freddie and pushed hard for the continuance of subprime loans. In second place was then-Senator Barack Obama, who, in just three years in the U.S. Senate, took in $126,000. Third, was Massachusetts Democrat John Kerry, who received $110,000.

Since the 1990s, Fannie Mae and Freddie Mac have been run by Democrats. From 1991 to 1998, Fannie Mae was led by James Johnson, a long-time aide to former Democrat Vice President Walter Mondale. Johnson made headlines in 2008 when Barack Obama picked him to chair his vice presidential selection committee. He had to resign in disgrace when it was revealed he had taken out at least five below-market real estate loans totaling more than $7 million from Countrywide Financial Corporation.

Johnson’s successor as head of Fannie Mae, Franklin Raines, had previously served as a budget director to President Bill Clinton. From 1995 to 2005, Raines pocketed nearly $100 million in compensation before leaving because of a scandal involving profit and loss reports manipulated to increase his annual bonuses.

Another well-known Democrat, Jamie Gorelick, served as vice chair of Fannie from 1998 to 2003. Prior to that, she was Janet Reno’s Deputy Attorney General during the Clinton years, when the Clinton Justice Department was aggressively compelling banks to make subprime loans to unworthy borrowers.

And Rahm Emanuel, current White House Chief of Staff, also served as a director at Freddie Mac. Most Americans are not aware that Fannie and Freddie, while lining the pockets of politicians, also funnels hundreds of millions of dollars to a host of leftist groups and causes promoting the Democrat agenda.

The grantmaking arms of Fannie and Freddie – specifically the Fannie Mae Foundation and the Freddie Mac Foundation – gives tens of millions of dollars each year to predominantly left-wing organizations such as the American Civil LibertiesUnion; the NAACP and National Urban League;pro-illegal immigration groups like the Mexican American Legal Defense and Education Fund, and the National Council of La Raza; pro-Democrat community activist groups like ACORN; and former president Jimmy Carter’s Carter Center.

The Republicans were not oblivious to Fannie and Freddie’s problems. Bush’s 2001 budget called runaway subprime lending a “potential problem”and warned of “strong repercussions in financial markets.” In July 2003, Senators Chuck Hagel (R-NE), Elizabeth Dole (R-NC) and John Sununu (R-NH) introduced legislation to address regulation of them.

The bill was blocked by the Democrats. 30 In September 2003 Bush’s Treasury Secretary, John Snow, proposed what The New York Times called “the most significant regulatory overhaul (of Fannie and Freddie) in the housing finance industry since the savings and loan crisis a decade ago.”

Did the Democrats in Congress welcome reform? Here’s how Barney Frank (D-MA), the ranking Democrat on the Financial Services Committee,responded:

“I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored entities we are talking about here, Fannie Mae and Freddie Mac, are not in crisis…. I do not think at this point there is a problem with a threat to the Treasury…. I believe that we, as the FederalGovernment, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals.”

In 2005, Republican Senators Hagel, Sununu, Dole, and later John McCain reintroduced legislation to once again address regulation of Fannie and Freddie. In essence, the bill would have required Fannie and Freddie to eliminate their investments in risky subprime loans. According to Kevin Hassett, writing in Bloomberg.com, “if that bill had become law, then the world today would be different.”

But the legislation didn’t become law for a single reason: Democrats opposed it on a party-line vote in the Senate Banking Committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democrat opposition, couldn’t even get the Senate to vote on the bill.

Had the bill passed in 2005, the mortgage meltdown would have been far less intense. In 2005, 2006 and 2007, approximately $1 trillion of these terrible mortgage loans were funded by Fannie and Freddie at a time when housing prices were at their highest. When housing prices fell dramatically, losses from those mortgages turned out to be tremendous.

Bottom line: if Fannie Mae and Freddie Mac weren’t buying these subprime loans, the market for them would likely not have existed. Rep. Artur Davis (D-AL) now admits Democrats were in error:

“Like a lot of my Democratic colleagues, I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourageaffordable home ownership when in retrospect I should have heeded the concerns raised by the regulator in 2004. Frankly, I wish my Democraticcolleagues would admit when it comes to Fannie and Freddie, we were wrong.”

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Edward R, Murrow once eloquently stated: "Our major obligation is not to mistake slogans for solutions." I do not intend to tell anyone who to vote for in November. However, I do ask that any voter fulfill their major obligation to be as informed as possible and not be easily swayed by shallow slogans like Hope, Change, Winning The Future, Forward, etc.

Understand the root causes of our problems like Mr. Bernstein does above relative to the current economic situation we are stuck in. It takes some work but both our personal and national futures depend on understanding the motives of our usually selfish politicians and how their actions have caused so much pain and agony. Unless you understand the root causes and causers of our problems, we will never find the solutions to resolve them.



Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:


www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org

http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w




Friday, March 20, 2015

The Failed Presidency Of Barack Obama, Part 8: Previously Identified 61 Examples of Failure

Over the past week or so we have been reviewing the many ways and perspectives on how the Obama Presidency has been a total failure:
  • We reviewed the many, many lies and deceptions of this administration and this President, from cutting the annual budget deficit in half to promising that you could keep your doctors under Obama Care to many others.
  • We reviewed the many high ranking Obama administration officials that have illegally and immorally conducted government business, and likely government shenanigans, using personal, unofficial computers and email accounts, undermining the spirit and letter of the Freedom of Information Act, other laws, and Obama's own promise to operate the most transparent administration ever
  • We reviewed the many instances where this administration has either allowed government functions and departments to continue to overspend but under deliver or allowed them to get even worse than when he took office.
  • We also reviewed some past posts that we had done previously that laid out numerous reasons and actions that should have already led to the impeachment of this Presidency, based on violations of existing law, judicial rulings, and the Constitution.
Despite all of these analyses across different aspect of being President, we are still nowhere close to being done. Between today and yesterday we will have reviewed previous posts from January, 2014 where we laid out over 60 reasons why this Presidency is a failure. Yesterday we went through the first 40, today we finish up with the next 21.

While these are not necessarily grounds for impeachment, they certainly are grounds for failure, with many of these failures using Obama’s own words to show how far short his administration has fallen of being even somewhat effective. Afterwards, we will update that original list with many other examples of failure that have occurred since that early 2014 analysis.


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THURSDAY, JANUARY 30, 2014

Part 3: The Next 21 Reasons That Are Not Grounds For Impeachment and Removal From Office

Twenty More Reasons (Reasons 41 Through 61) For Which Obama Cannot Be Impeached and Removed From Office.

Let’s face it, the country is not in great shape these days. We have a government that cannot even develop a website despite spending well over $600 million to do so. We have a political class that is more concerned with their own welfare and perpetual reelection than the general welfare of Americans. We have a skyrocketing national debt that will burden Americans for generations to come. We have anemic economic growth. We have a President who claims he has no knowledge of the multitude of scandals erupting around him. Major safety nets such as Social Security, Medicare, and Medicaid are lunging towards insolvency. We have lost the war on drugs. The list seems endless some days.
In these desperate times, a person typically wants to find a culprit and make them accountable. The most obvious culprit is the leader of the country, President Obama. Unfortunately, there is a difference between incompetence vs. high crimes and misdemeanors that would allow the country to impeach and remove a sitting President from office.

Having stupid policies and programs, and mismanaging them to boot, is not grounds for removal from office. Maybe it should be, it would save the country a lot of suffering, but that is not allowed under our current legal system. The voting booth is supposed to be for that purpose. In order to remove someone from office, they must violate any of the tenets of the Constitution and Bill of Rights or existing law under which they should have been operating.

We have been trying to make that distinction over the past few days. While many of us feel that the Obama administration has been the worse one in the history of our country, sinking even below the disaster that was the Carter administration, there are a load of failures that cannot be used for impeachment and removal from office. We have been covering those failures and disasters in the past few days along with today.

Those first two lists of forty failures can be found at:



Today, after we finally finish going through the myriad of reasons that can not be used for impeachment and removal from office, we will go through a still substantial list of reasons while President Obama should be removed from office for high crimes and misdemeanors in the following days. Consider that list to be the list of charges that would be read at a potential lawbreaker’s arraignment. 

That list of charges would then go to a grand jury, i.e. the House of Representatives, where they would decide which charges, i.e. indictments, if any, would be brought forth. Those indictments would then be debated and voted on for conviction or non-conviction in the Senate. 

That is the process: arraignment based on likely criminal charges, grand jury-like action in the House to lock down substantial and provable violations of the law, Constitution, and Bill of Rights, leading to a formal indictment, and then onto the Senate for trial, based on the House indictments. 

But first, lets finish going through the many disasters and failures that cannot be put on the list of charges that are reviewed for indictments that are then part of a Senate impeachment proceeding. Keep in mind that you cannot remove a President from office:

  • For having ineffective and/or stupid policies. 
  • For being ineffective in executing his duties of office. 
  • For being arrogant, narcissistic, and pompous. 
  • For waging class warfare and dividing the nation into voting blocs. 
  • For lying about his past or his promises. 
That is the reason that the following failures, and the many, many failures we have discussed over the previous two days, are not grounds for impeachment and removal from office; they may be despicable, they may be embarrassing, they may be wasteful, they may be outright deceptions, but they are not grounds for removal under the Constitution.

[Note: associated with many of the failures listed we have attached notable quotes from the President and other reputable sources to show how far and how quickly his promises and assertions degenerated into lies, deceptions, and failures]

President Obama cannot be impeached and removed from office because...

41) He failed to live up to his promise of reducing the obscene number of earmarks in the annual Federal government expense stream, with the value of earmarks at almost the exact same level of waste as when he took office five years ago.

Relevant Obama quote: “We need earmark reform, and when I'm President, I will go line by line to make sure that we are not spending money unwisely.”

42) He signed the renewal of the Patriot Act with little discussion or change, a piece of legislation that has caused a significant drop off in freedom and privacy in this country.

Relevant Obama quote: "We will revisit the Patriot Act and overturn unconstitutional executive decisions issued during the past eight years." 

43) His administration has, at times, incurred MONTHLY deficit spending levels that were higher than almost every other ANNUAL spending deficits from every other President including Bush.

Relevant Obama quote: “Today I’m pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we’ve long neglected. But I refuse to leave our children with a debt that they cannot repay — and that means taking responsibility right now, in this administration, for getting our spending under control.”

44) He failed to foresee the Arab spring, resulting in an unpreparedness that has considerably weakened the American influence in the entire Middle East region.

45) His Obama Care legislation has resulted in many new taxes being directly or indirectly imposed on every American.

Relevant Obama quote: “If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime.”

46) The national debt has increased over $7 TRILLION during his first five years in office, imposing an individual debt burden of over $50,000 on every man, woman and child in the country.

Relevant Obama quote: Relevant Obama quote: "America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit."

47) Of his many lies, one the biggest lie was to blame Congress for the impacts of the sequester, an idea that he proposed, and an idea he later denied ever proposing despite the public record of his proposal.

Relevant Obama quote: “The sequester is not something that I’ve proposed. It is something that Congress has proposed.”

Relevant Obama quote (Bob Woodward): “What the president said is not correct [that he did not propose the sequester]. He is mistaken. And its refuted by the people who work for him.” 

48) In cahoots with Congress, he secretly signed legislation that modified the STOCK Act, a secret signing that allowed Congressional members and their staffs to again conduct stock trading based on their insider secret knowledge of legislation that was pending, proposed or possible in the future.

49) He allowed his administration to spend millions of dollars to buy fake Twitter and Facebook hits and followers while at the same time signing legislation that reduced the pension benefits of our veterans.

50) Despite wining the Nobel Peace prize, according to Gallup's international polling, 23% of world citizens in a recent opinion poll still view the United States as the biggest threat to world peace, almost three times more than the next nearest threat (Pakistan), and more than four times higher than either Russia or China.

51) Despite promising to have the most transparent administration ever, Transparency International recently proclaimed that corruption in the United States was growing faster than anywhere else in the world except Cuba, Dominca, and Burkina Faso.

52) Analysis of IRS records showed that 36 Obama White House employees owed over $800,000 in back taxes and over 300,000 Federal employees owed about $3.5 billion in back taxes but all of whom were allowed to continue to draw their full Federal salaries and benefits; which should not be a surprise since he nominated any number of tax evaders and/delinquent tax payers to important government positions including Kathleen Sibelius (head of Health and Human Services), Timothy Geithner (Secretary of the Treasury), Solis (head of the Labor department), Tom Daschle (who ended up not working for this administration) and others.

53) He broke his promise not to sign non-emergency legislation before it had been posted on the Internet for at least five days.

54) He broke his promise to televise the Congressional hearings regarding Obama Care debates and proceedings on C-SPAN so the entire country would understand what was going into the legislation.

55) He lied when he stated that the Supreme Court had never overturned any law that had been passed by Congress, he lied when he said the auto bailouts he supported prevented Detroit from going bankrupt (it did go bankrupt), he lied when he said that Al Qaeda was almost defeated since we now know that Al Qaeda controls more physical territory in the world than it ever has before including battlegrounds in Iraq that cost Americans hundreds of lives and billions of dollars, he lied when he denied saying that he had ever declared a “red line” regarding Syria’s use of chemical weapons. (relevant Obama quote: “A red line for us is when we start seeing a whole bunch of chemical weapons moving around.”), he lied when he falsely claimed that health insurance companies were the cause of millions of insurance policies being cancelled when in truth it was the Obama Care legislation requirements that legally forced the cancellations, and he lied when he falsely claimed that an insurance company had refused to pay for his mother’s cancer treatment. Note: the Obama Care lies are too numerous to mention here, please go to the following link for a detailed discussion of those additional lies the phrase, "unfolding disaster"int he search box above.

56) Three years after the Dodd-Frank financial industry reform legislation has been passed, less than half of the needed regulations required by the legislation have been written by the executive branch.

57) He vindictively shut down White House tours and DC war memorials during the sequester and government shutdown, claiming lack of government funds, but somehow found government funds to keep his favorite government run golf course open the whole time.

58) He insulted the families who had loved ones die or be wounded by the Fort Hood terrorist attacker, Nidal Hasan, by claiming they were merely victims of “workplace violence” and not terrorism; this cold designation resulted in those families and victims not getting just compensation for their losses and suffering while at the same time paying over $200,000 in government salary and benefits to the shooter and terrorist Hasan as he awaited trial. 

59) He refused to fire the IRS employees who lost $67 million from an Obama Care slush fund, he refused to fire ATF employees who lost over 400 million cigarettes in their position, he failed to fire anyone connected with the $600 million Obama Care website that did not work, he failed to fire anyone who was connected with the botched rollout of Obama Care including Health and Human Services Secretary Kathleen Sebelius, etc.

60) He refused or did not care to rein in absolutely stupid and unnecessary government spending including research money used to build a robotic squirrel, development of a video game to simulate prom week, conducting pottery classes in Morocco, determining when dogs became man’s best friend, constructing a million dollar bus stop in Arlington, Virginia, keeping a dog handler (earning over $100,000 a year) on the White House payroll to handle the Obama family’s dog’s needs, keeping three full time professional calligraphers on staff, and other such extraneous, unnecessary and wasteful spending and nonsense.

61) He criticized waterboarding and secret rendition of suspected terrorists but then went forth and simply just killed suspected terrorists and collateral damage civilians directly by drone attacks.

Relevant Obama quote: "We will not ship away prisoners in the dead of night to be tortured in far off countries, or detain without trial or charge prisoners who can and should be brought to justice for their crimes, or maintain a network of secret prisons to jail people beyond the reach of the law." 

Let’s stop at 61 reasons. We could go on but you get the idea: this administration botched the whole Syrian civil war/poison gas debacle, tried to bribe a Pennsylvania politician (Joe Sestak) not to run against an incumbent Pennsylvania Senator (Arlen Specter), failed to take care of 200,000 veterans who are homeless on our streets, needlessly and recklessly stationed 2,500 U.S. Marines in Australia for no reason, failed to rein in a growing poverty level, etc., etc., etc.

But let’s stop at these 61 reasons that cannot be used to impeach and remove the President from office. They are 61 reasons to get you ticked off for mismanagement of the economy, mismanagement of taxpayer funds, ineffective economic policies and results, cronyism, insider trading, etc. But no matter how ticked off you get, not impeachable offenses

But that does not mean there are not impeachable offenses in play. And that will be our topic over at least the next two days, serious breeches of the Constitution and existing laws that do rise to the standard of serious “crimes and misdemeanors.”

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Eight posts and we have still not identified all of the reasons why this administration is an abject failure. More evidence of the failure in the following days.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org

http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w