Real American Independence Means Freedom from Debt, Spending
By Minyanville Staff Jul 02, 2009 3:55 pm
Real fiscal responsibility is the final frontier.
The assumptions used in the bank stress tests were stress-free. The stress-test timeframe ended in 2010. William Black, former bank regulator and author of The Best Way to Rob a Bank Is to Own One, concludes:
“There were no real examinations. Banks continue to overstate asset quality. The bankers pressured Congress, which extorted the Financial Accounting Standards Board, which gutted the accounting rules on loss recognition. Because there were no real examinations, there were no real stress tests.”
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Even the panel Congress appointed to oversee the Troubled Asset Relief Program (TARP) said: “Unanswered questions about the details of the tests make it impossible to replicate the tests to determine how robust they are or to vary the assumptions to see whether different projections might yield very different results."
Billions in TARP funds went to the likes of GMAC (GM), Capital One (COF), and American Express (AXP) so they would lend it out to over-indebted consumers and jump-start the economy. The $787 billion stimulus plan has dumped wads of cash into the laps of bureaucrats throughout the country in the hopes that something productive might happen.
Senator Coburn of Oklahoma issued a report last week regarding stimulus spending: One town in North Carolina is using stimulus funds to hire an administrator whose job it will be to procure more stimulus funds. You judge whether these projects will jump start our moribund economy:- Optima Lake is in line to receive $1.15 million in federal stimulus money to construct a new guardrail for a lake that doesn't exist. The guardrail's needed for “public safety,” says the Army Corps of Engineers, but there's not much of the public around to protect. Because the lake has never filled with water it's all but useless to potential visitors.
- The repair of 37 rural Wisconsin bridges that average little more than 500 vehicles apiece each day -- with one carrying no more than 10 cars a day. The projects jumped ahead of larger, urban repairs because they were "shovel ready." $840,000 to repair a bridge in Portage County, which carries 260 vehicles a day largely to a backwater saloon and a country club.
- $1.5 million in stimulus money for a $5 million new waste-water-treatment plant in Perkins, Oklahoma. The stimulus money came with strings that will increase the costs. With a new total cost of $7.2 million, the city will be forced to borrow money and, as a result, utility taxes have increased by 60 percent this year.
- A $3 million project to repair taxiways at Hanscom Field, Massachusetts, which Coburn said is for corporate jets. Richard Walsh, a spokesman for the independent state agency that runs the airport, Massport, said only 18% of the traffic at the airport is for corporate jets. Most of the use -- 70% -- is for flight instruction, he said.
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2009-07-02 16:12:17
Excellent article with excellent advice. Until we can throw the wasteful bums out of Washington and until the wasteful companies concede and implode we must do all we can to cut off the very lifeblood that sustains them- our money.
2009-07-02 17:10:35
US debt trap
Great article. Unfortunately the US is hurtling down the debt road and is relying on the country's credit card to maintain the illusion of wealth and prosperity. Sooner or later there will be a debt and/or currency crisis which will force some discipline. The other likehood is runaway inflation which destoys the responsible people (e.g. savers) and rewards the reckless spenders.
Pretty sad.
Pretty sad.
2009-07-02 19:04:26
Good ideas
I too believe in punishing the culprits--ie the large banks and government--that are largely responsible for creating the problem and profiting from taxpayer largesse.
I have and will continue to take these steps, two of which you mentioned:
1. Take all deposits out of the large banks and put them in smaller, SOLVENT local financial institutions.
2. Limit W-4 withholdings to the taxes that will actually be owed.
3. Significantly curtail or in many months eliminate non-essential expenditures.
If more people took these simple steps, the beast would be starved and likely the government would be forced to cut spending.
I have and will continue to take these steps, two of which you mentioned:
1. Take all deposits out of the large banks and put them in smaller, SOLVENT local financial institutions.
2. Limit W-4 withholdings to the taxes that will actually be owed.
3. Significantly curtail or in many months eliminate non-essential expenditures.
If more people took these simple steps, the beast would be starved and likely the government would be forced to cut spending.
2009-07-02 23:10:58
Good stuff
The rich get richer and the poor get poorer because the poor give the rich all of their money. The government gets worse because the rich give the government everyone's money, and the government spends it all at the establishments of the rich, printing more money along the way to devalue it, meaning that the poor have to work even harder to get the same amount of stuff but the rich have even more power because they now have more dollars (even though the dollars aren't worth as much, the numbers are bigger).
We have to learn to live within our places, within our skills, within our local resources. We don't need jobs from "on high" any more than we need security from outside the reach of our own pitchforks.
We have to learn to live within our places, within our skills, within our local resources. We don't need jobs from "on high" any more than we need security from outside the reach of our own pitchforks.
2009-07-03 12:15:15
Once again, the cart before the horse.
The REAL problem is that the average American is completely clueless as to what "their" government is supposed to do FOR them (or TO others). Right now, the government is functioning perfectly - ABSOLUTELY PERFECTLY - at directing tax money to politically connected insiders. This is exactly what's it has evolved to do, and is function flawlessly. This is true for local, state, and the federal government. Politicians work their way up-the-ladder by proving to their sponsors - the current owners of the government - that they'll keep playing the game and keep funneling government cash to their owners.
And what does the average American think of all this? 40% think the fornicating-harlots need to be punished more, another other 40% think we need to spend more, the last 20% are watching American Idle.
Nope, you intellectuals can talk all you want about "fixing" things, but in actual fact NOTHING is broken. Bread and circus has always worked, until it collapses.
And what does the average American think of all this? 40% think the fornicating-harlots need to be punished more, another other 40% think we need to spend more, the last 20% are watching American Idle.
Nope, you intellectuals can talk all you want about "fixing" things, but in actual fact NOTHING is broken. Bread and circus has always worked, until it collapses.
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