Tag Archives: Topic: Debt

Sean Fieler at the WSJ (via Google): The more than five-fold increase in the median income of the American household since 1971, to $50,000 from $9,000, certainly provides the clear appearance of progress. But after the dollar’s 82% loss of purchasing power over the same period is factored in, the median household income rose just 12%. This much more modest increase is largely the result of the growing prevalence of two-income households . . . The median real income for working men over the same 40-year period rose just 8%. And that improvement only accrued to the ever-shrinking percentage of men fortunate enough to still have full-time jobs—just 67%, according to the latest data from the Bureau of Labor Statistics, within a percentage point of the lowest level on record since the figure was first recorded in 1948.

Wall Street Journal (via Google): Chinese and South Korean central-bank officials criticized the U.S. Federal Reserve’s latest easing efforts and advocated reducing Asia’s dependence on the U.S. dollar. The comments Thursday, at a joint seminar in Beijing by the two central banks, are the clearest indication yet of a rising backlash in Asia against U.S. monetary policy, suggesting it could speed up the search for alternatives to the dollar as the main global currency.

Sun Times: Low-wage workers in Chicago are better educated, older and rely more on that income these days to meet basic needs than 10 years ago.

NY Times: Such survival tactics are becoming increasingly commonplace here, with an unemployment rate over 50 percent among young people and more and more households having adults without jobs.

NCPA Policy Digest: In the face of slow growth, the Federal Reserve has pursued another round of quantitative easing to help alleviate economic concerns. However, the Fed’s policy is simply a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy, according to Anthony Randazzo, director of economic research at the Reason Foundation.

Washington Examiner: Current federal regulations plus those coming under Obamacare will cost American taxpayers and businesses $1.8 trillion annually, more than twenty times the $88 billion the administration estimates, according to a new roundup provided to Secrets from the libertarian Competitive Enterprise Institute.

The Hill: Federal Reserve Chairman Ben Bernanke underlined his concerns about the fiscal cliff in a closed-door meeting with senators Wednesday. The head of the nation’s central bank met privately with members of the Senate Finance Committee, as he continued to make his case to lawmakers that they must adjust policy before the end of the year to avert a fiscal cliff of tax hikes and spending cuts that economists argue could thrust the nation back into a recession.

Balkinization: Of the dozen-plus misrepresentation lawsuits filed against law schools by their former students, in recent months three have been dismissed (several have survived motions to dismiss and are in discovery). The core basis for the dismissal is the same in all three: prospective students cannot reasonably rely upon employment data posted by law schools . . . These three law schools, and others facing similar suits, undoubtedly count these decisions as victories. But I cannot shake the sense that they mark a deep wound to the standing of law schools.

Oliver Marc Hartwich at Business Spectator: So what was the role of the Constitutional Court, then? Simply to make sure that any euro crisis decisions taken are compatible with the constitution in general and with its democratic principles in particular. First and foremost among these democratic principles are parliament’s budget rights. No democracy can work if parliamentarians had no control over taxes and expenditures, and thus the Bundestag could not divest itself of this core right of fiscal autonomy, the court stated. Along with this, the judges demanded clarifications in the course of ratifying the European treaties.

The Telegraph: A senior advisor to the Chinese government has called for an attack on the Japanese bond market to precipitate a funding crisis and bring the country to its knees, unless Tokyo reverses its decision to nationalise the disputed Senkaku/Diaoyu islands in the East China Sea.

CNBC: Ratings firm Egan-Jones cut its credit rating on the U.S. government to “AA-” from “AA,” citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country’s credit quality.

CNSNews: By the end of August, according to data released Thursday by the U.S. Treasury, the federal government had already paid out record annual amounts in both Social Security and disability benefits during fiscal 2012—even though there was still a month left in the year.

USA Today: Most college and university endowments have recovered from losses sustained in the recession. Here’s a look at U.S. and Canadian schools that reported endowments for 2011 and, when reported, their maximum pre-recession values. Endowments include investment gains and fundraising. Numbers have not been adjusted for inflation.

USCourts.gov: The Judicial Conference of the United States today agreed to close six non-resident federal court facilities—the latest in a series of cost-cutting measures implemented by the federal Judiciary’s national policy-making body.

CNSNews: American taxpayers everywhere have literally billions at stake in what goes on in this one city’s public school system. Over the past four years, the Chicago public schools have churned through total revenues of approximately $20.27 billion and about $4.26 billion of that revenue—or almost 21 percent of it—has come from the federal government.

Foreign Policy: A team of U.S. State Department economic officials is nearing an agreement on $1 billion in debt relief to Egypt, and plans for increased U.S. investments. The United States has traditionally given Egypt $1.3 billion a year in military assistance, as the country has remained a strong U.S. ally in the region, particularly in its commitment to a peace treaty signed with Israel in 1979.

FoxNews (includes video): Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. China, it turns out, holds less than 8 percent of the money our government has borrowed over the years.

CNBC: The world’s largest economy, which was placed 5th last year, fell two positions to the 7th spot – marking its fourth year of decline.

CNSNews: At 4:00 p.m. on Tuesday, the U.S. Treasury reported that as of the close of business on Friday, Aug. 31, the U.S. debt had reached $16,015,769,788,215.80.

AP reports.

Seth Lipsky at the Wall Street Journal (via Google): In the ferment within today’s Republican Party, there’s a growing realization that America’s system of fiat money is part of the economic problem

NCPA Policy Digest: The persistent inability of the Fed to stimulate aggregate demand makes it difficult to escape the reality that the U.S. economy is stuck in a liquidity trap.

Financial Times: Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar and gold.

The Hill: The Pew Research Center found that median income for the middle class dropped by 5 percent, in the first decade since World War II where family incomes declined across the board. In a decade that saw both recession and a financial crisis, median wealth for the middle class dropped even more sharply, by some 28 percent.

CNSNews: The money the U.S. government owes to foreign entities rose to a record $5.2923 trillion in June, according to data released by the U.S. Treasury Wednesday afternoon.

AP: The University of Virginia, a top-ranked law school, hired 17 percent of its 377 graduates in 2011. The school has a 95 percent rate of fulltime employment in positions requiring bar admission. Subtract those graduates whose salaries are being paid by their alma mater, and it drops to 78 percent. “It’s a Ponzi scheme, in almost a literal sense,” said Paul Campos, who teaches at the University of Colorado Law School in Boulder. “You’re taking money from current students and paying it to unemployed graduates.”

Smart Money: From January through August 6, the government reduced the size of roughly 115,000 retirees’ Social Security checks on those grounds. That’s nearly double the pace of the department’s enforcement in 2011 . . . Many of these retirees aren’t even in hock for their own educations. Consumer advocates say that in the majority of the cases they’ve seen, the borrowers went into debt later in life to help defray education costs for their children or other dependents.

NCPA Policy Digest: People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by the Associated Press.

CNBC: The government’s most widely publicized unemployment rate measures only those who are out of a job and currently looking for work . . . or that count, the government releases a separate number called the “U-6,” which provides a more complete tally of how many people really are out of work. The numbers in some cases are startling.

AP reports.

CNSNews: President Obama is trying to prevent thousands of layoff notices from going out a few days before the November election, Sen. Jame Inhofe (R-Okla.) said on Tuesday.

Wall Street Journal: Some schools are having so much trouble filling their seats that they are negotiating scholarships, accepting some applications long after formal deadlines, and offering up other perks to entice the best prospective students.

AP: A Senate Democratic committee report says for-profit colleges place revenues above education and charge students high tuition and excessive loan rates.

NCPA Policy Digest: Eight state governors have said that they will take advantage of the recent Supreme Court ruling allowing them to opt out of the Affordable Care Act’s (ACA) dramatic expansion of Medicaid. Their actions have been dismissed by liberal columnists as mere partisan posturing, but further analysis reveals that opting out may be the fiscally responsible choice for a number of states, says Avik Roy, a senior fellow with the Manhattan Institute.

Heritage Foundation: Yesterday, the Senate narrowly voted (51-48) to raise taxes on 1.2 million small businesses, which will likely kill more than 700,000 jobs at a time when nearly 13 million Americans are out of work. Senators Joe Lieberman (I-CT) and Jim Webb (D-VA) joined all Republicans in bipartisan opposition to the tax hike.

Newsmax: “It’s the policy of the fed, the destruction of money, the intervention. It’s a system that is very biased against the middle class. It’s been well known that if you destroy a currency, there is a natural transfer of wealth from the middle class to the very wealthy.”

John Ransom at Townhall: There is a dirty secret about state entitlements that liberals don’t want you to know. The collection of a state pension increases the chances that a pensioner will live in poverty. That’s because money put aside for state-guaranteed benefits can not be safely invested at rates that provide for more than a modest retirement unless the state subsidizes retirement benefits through taxes or if retirement savings are invested in riskier, higher yielding investments. Since governments are loath to raise taxes to subsidize a riskless retirement, benefits are eventually reduced. It works that way in London and Moscow as well as Madison and Sacramento.

WSJ: The Obama administration urged Congress to make it easier for people to discharge a portion of certain student debt by filing for bankruptcy protection. The recommendation, in a report by the Education Department and the Consumer Financial Protection Bureau, wouldn’t affect the vast majority of student debt, which is issued by the federal government. It would apply only to the roughly $150 billion, or 15% of total outstanding student debt, issued by private lenders such as SLM Corp.’s Sallie Mae and Wells Fargo & Co.

National Law Journal: The median starting salary has dropped by 17 percent since 2009, according to NALP, and the average salary has decreased by 16 percent.

Cong. Ron Paul: The true evil of inflation is that newly created money benefits politically favored financial interests, especially banks, on the front end. Over time, however, the net result of monetary inflation is always the devaluation of savings and purchasing power. This devaluation discourages saving, which is the key to capital accumulation and investment in a healthy economy. Inflation also tends to hurt seniors and those living on fixed incomes the most.

NPR (includes audio): The increasing debt load of college graduates has affected young people’s lives in untold ways, from career choices to living arrangements. Now add another impact on a key part of young adult life: dating and marriage.

Trial Insider: It appears two U.S. Senators’ criticism of spending for a Maui judicial conference in August by the the 9th U.S. Circuit Court of Appeals paid off. The court announced it was calling off its 2013 conference set for Monterey, Calif. and pushing it back to 2014. | Related post at How Appealing with a new letter to the court and additional coverage.

NCPA Policy Digest: Voters continue to support across-the-board federal spending cuts to help solve the federal budget crisis.

AP: A new law will let companies contribute billions of dollars less to their workers’ pension funds, raising concerns about weakening the plans that millions of Americans count on for retirement.

NCPA Policy Digest: Private corporations are asking Congress to change how they calculate their annual pension contributions, which could create a huge unfunded liability for taxpayers, say Jason J. Fichtner and Eileen Norcross, senior research fellows with the Mercatus Center.

AP: Gov. Rick Perry said Monday that Texas won’t establish an online marketplace for patients to shop for insurance or expand Medicaid . . .

Findlaw: In add to all the articles out there warning people off from law school, U.S. Newspublished a list of law schools whose graduates have the most debt.

CNSNews: A record of 8,733,461 workers took federal disability insurance payments in June 2012, according to the Social Security Administration. That was up from 8,707,185 in May.

Education News: A federal judge has struck down central parts of hotly debated new federal regulations meant to rein in for-profit colleges that often leave students saddled with debts they cannot repay. In a ruling released on Saturday, U.S. District Judge Rudolph Contreras invalidated parts of the Obama administration’s so-called gainful employment regulations, ruling that the Department of Education “failed to provide a reasoned explanation” in arriving at guidelines to assess students’ ability to pay down loans after attending a career training program.

Detroit News: The Treasury Department estimates the taxpayers will lose enormous sums in the auto bailout — more than $20 billion. That is more than Michigan spends on public education, more than the federal government spends on NASA, and more than America gives in foreign aid. None of these losses were necessary to keep General Motors and Chrysler in business. The entire net cost of the bailout came from subsidizing the United Auto Workers’ pay and benefits.

Daily Mail: Starving Greeks queued around the block for free food handouts yesterday as the country’s politicians managed to end a crippling stalemate to form a coalition government.

Richard Vedder at Minding the Campus.

Weekly Standard: A new chart, set to be released later today by the minority office of the Senate Budget Committee, finds that, in the next five years, “U.S. Per Person Debt To Increase 7 Times Faster Than Italian Debt.”

Mirror of Justice: Along with the bleak jobs picture, the class of 2011 emerged with a mountain of debt. The debt is every bit as high at Catholic law schools as anywhere else. Here is the average debt for 2011 graduates of Catholic law schools . . .

Wall Street Journal (via Google): President Obama likes to say that everyone in America should “play by the same rules.” Okay, so then why does the Administration’s new student-loan rule apply to for-profit colleges, but not nonprofits?

NCPA Policy Digest: The median U.S. household lost nearly 39 percent of its wealth from 2007 to 2010, according to a Federal Reserve report released Monday, emphasizing anew the impact of the financial crisis and the recession on ordinary Americans, says USA Today.

Phyllis Schlafly at Townhall: One of the ways to cut the big-spending binge engaged in by the federal government is to terminate the racket of college loans. It’s counterproductive, discriminatory and a bad investment for both taxpayers and students.

AP: The average cost of attending a four-year public university increased by 15 percent over a two-year period.

Yahoo (AP): Olivier Bailly spokesman said Tuesday that, legally, limits could be imposed on movement of people and money across national borders within the EU if it’s necessary to protect public order or public security.

George F. Will at the Washington Post: So taxpayers should pay more and parents and students should borrow more to fund administrative sprawl in the service of stale political agendas? Perhaps they will, until “pop!” goes the bubble.

NY Post: How bad is the US problem? Former Treasury official Lawrence Goodman recently pointed out that investors are shunning US bonds and notes; the lack of other buyers forced the Federal Reserve to buy “a stunning . . . 61 percent of the total net issuance of US government debt” last year.

Washington Times: The federal government is staring at a disastrous fiscal picture with debt approaching 200 percent of GDP within two decades if Congress doesn’t change course on spending and taxes, according to the latest analysis by the Congressional Budget Office released Tuesday.

CNBC: US and European regulators are essentially forcing banks to buy up their own government’s debt—a move that could end up making the debt crisis even worse, a Citigroup analysis says.

Heritage Foundation: One year ago, the state of Wisconsin adopted sweeping reforms that curbed collective bargaining rights among government workers, brought the state’s pension system into line, and empowered those workers to choose whether or not to pay union dues. A firestorm of opposition erupted among public sector unions. But despite all the rhetoric, the reforms did not spell doomsday for government workers.

Heritage Foundation: The number of workers per Medicare beneficiary is falling dramatically. Back in 1965, there were 4.6 workers contributing to Medicare for every person receiving benefits. Today, there are only 3.3 workers, and in 2030, that number will fall to 2.3. That falling ratio is leading to the program’s insolvency. And with longer life expectancy (which of course is a good thing), seniors today are collecting benefits for almost three times as long as when the program first started.

Reuters: China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The Hill: President Obama and House Speaker John Boehner (R-Ohio) clashed during a White House meeting on Wednesday, with the Speaker telling the president that he was “not going to allow a debt ceiling increase without doing something serious about the debt,” Boehner’s office said.

NY Times: Kelsey Griffith graduates on Sunday from Ohio Northern University. To start paying off her $120,000 in student debt, she is already working two restaurant jobs and will soon give up her apartment here to live with her parents. Her mother, who co-signed on the loans, is taking out a life insurance policy on her daughter.

The AP reports.

BBC: Analysts say the vote has wide implications for the whole eurozone. Mr Hollande has vowed to rework a deal on government debt in member countries.

The Hill: Observers said the U.S. and China will both be looking for a way out of the diplomatic fight that allows both sides to save face . . . Willson said he expected the situation to quickly be resolved given the two nations’ mutual dependence. The two countries are tied at the hip economically – China is America’s second-largest trading partner and is the largest single holder of U.S. government debt – and China’s support is needed to get anything done in the UN.

Anna Cuevas at Huffington Post: Is there a correlation between divorce and foreclosure? Does foreclosure increase the likelihood of divorce, or does divorce increase the risk of foreclosure? The answer is both are probably true.

AP: Lawmakers on both sides of the aisle agree: It would be a mistake to let interest rates on student loans double in July. Especially if they’re going to be blamed for it in an election year.

The Hill (video): Krugman, meanwhile, described Paul as “living in the world that was 150 years ago.” “History tells us that in fact a completely unmanaged economy is subject to extreme volatility, subject to extreme downturns. I know this legend that some people like that the Great Depression was somehow caused by the government or the Federal Reserve, but that’s not true. The reality is it was a market economy run amok, which happens repeatedly,” the Nobel Prize winning economist said. That prompted Paul to one-up Krugman, saying the Times columnist “wants to go back 1,000 years or 2,000 years just as the Romans and the Greeks and all other countries debased their currency.”

William McGurn at the Wall Street Journal: Paul Ryan shocked the gentle souls at Georgetown University when he traveled up to their campus last Thursday and said: “We believe that Social Security legislation, now billed as a great victory for the poor and for the worker, is a great defeat for Christianity. It is an acceptance of the idea of force and compulsion.”