Comprehensive List of All 14 Tax Hikes in Obama's "Stimulus 2.0" Plan

National Debt: $14,683,910,471,706 - Increased by $4,057,033,422,793 since Obama’s Inauguration because of unbridled spending, bad decisions, and agenda to transform the U.S. into a second rate country and incompetence.  So now he wants more money to up the debt even further through another failed stimulus.  Call Congress and tell then NO!!

There are fourteen new or higher taxes in President Obama's "Stimulus 2.0" plan he wants Congress to pass. Permanent tax hikes for new spending.

President Obama has asked Congress to pass his “American Jobs Act,” a bill which is a series of permanent tax increases funding temporary tax relief and new spending programs.  The overall act is a net tax increase (score pending).  All tax hikes are scheduled to take effect in 2013.   Below is a comprehensive list of the 14 tax hikes in the bill (in order of appearance in Stimulus 2.0):

Spectrum Tax (Sec. 278): A new $4.8 billion hidden tax on wireless consumers. Levied on users of licensed spectrum, the tax will hit consumers who use mobile phones, tablets, and other wireless devices. Worst of all, the Federal Communications Commission could raise or punitively-target this Spectrum Tax at whim from this $4.8 billion floor.

28% Limit on Itemized Deductions and Employer-Provided Health Insurance (Sec. 401).  Under the Stimulus 2.0 tax hike, no matter what tax bracket you fall in, you can only benefit from deductions as if you are in the 28 percent bracket or less.  This denies taxpayers in the top two brackets the full deduction for mortgage interest, charitable contributions, and state taxes that other taxpayers can claim.  In addition, this tax increase limits most non-itemized deductions and exclusions for these taxpayers, in particular those for employer-provided health insurance, health savings accounts (HSAs) and self-employed health insurance premiums.  Moving expenses and the foreign earned income exclusion would also be limited.  For taxpayers in 2013’s top bracket of 39.6 percent, this would chop 30 percent of the value of all these exclusions and deductions.

“Carried Interest” (Sec. 411).  Under current law, capital gains earned by managers of investing partnerships are taxed (properly) as capital gains.  This bill would tax them instead as ordinary income, raising their tax rate from 15 percent today to 39.6 percent in 2013.

Airplane Tax Hike (Sec. 421).  Businesses should be able to expense all equipment in the year of purchase (President Obama would seem to agree, since he called for an extension of 100% “bonus depreciation” which does precisely that).  However, Stimulus 2.0 inconsistently also calls for a longer “depreciation” (slow deduction over time) of one business expense—airplane purchases.  The bill calls for the depreciable life of aircraft (not just “corporate jets”) to be extended from 7 to 12 years.  This is a tax hike that will kill jobs, just like the 1990 yacht tax killed that industry a generation ago.
Intangible Drilling Costs (Sec. 431).  Current law allows energy companies to deduct most (only 70% of these costs for the larger companies) of the costs associated with drilling.  All expenses should be deductible in the year they are incurred.  Stimulus 2.0 would repeal this and make companies deduct the costs very slowly over fifteen years.

Tertiary Injectants (Sec. 432).  Current law allows energy companies to deduct the cost of injecting materials into older energy reservoirs in order to keep them productive.  This is the proper tax treatment of this cost.  Stimulus 2.0 would replace this very ordinary deduction with precisely nothing.  Energy companies would simply have to eat the cost with after-tax dollars.

Percentage Depletion (Sec. 433).  This refers to a provision of law that allows taxpayers to recover their lease investment in a mineral interest through a percentage of gross income from a well.  Stimulus 2.0 would repeal this provision ONLY for investments in oil and gas wells.  Interestingly, the largest oil companies don’t benefit from this today, so this tax increase is targeted only at smaller energy companies and their investors.

Manufacturer Tax Deduction (aka “Section 199”) (Sec. 434).  All employers are today allowed to deduct up to 9% of the cost of domestic manufacturing—all employers, that is, except energy companies, who can only deduct 6% of such costs.  Stimulus 2.0 would deny this deduction entirely to energy companies, singling them out by picking winners and losers in the tax code.

Oil and Gas Passive Losses (Sec. 435).  In general, “passive” (trade or business activities without active participation) losses are not allowed to be claimed by taxpayers.  There is an exception for investment in oil and gas extraction.  Stimulus 2.0 repeals this exception, which will tend to hit small energy companies and their investors the hardest.

Geological and Geophysical Costs (Sec. 436).  Currently, small energy companies can deduct the costs of exploring for new sources of energy over two years (again, the proper treatment should be to expense in the first year).  Stimulus 2.0 would stretch this period to seven years.  This only affects small, independent energy employers as larger companies are ineligible for the two-year treatment under current law.

Enhanced Oil Recovery Credit (Sec. 437).  This credit, intended to spur oil production even when prices are low, can only be claimed when oil is less than $42 per barrel.  Oil is currently about $87 per barrel, so this credit is nowhere near claim-able.  Nonetheless, Stimulus 2.0 repeals the credit just to raise taxes while scoring cheap points against energy employers.

Marginal Well Production Credit (Sec. 438).  This credit is the same as the Enhanced Oil Recovery Credit in Sec. 437, but it is only use-able when oil prices drop to $27 per barrel.  Stimulus 2.0 repeals this credit for similar reasons.

Dual Capacity Rules (Sec. 441).  The U.S. is one of the only nations which attempts to tax on a “worldwide” basis—even on income which has already faced income taxation in other countries.  When combined with the highest corporate tax rate in the developed world, “worldwide” taxation is an uncompetitive jobs killer.  In order to avoid international double taxation, employers can claim a tax credit for income taxes paid overseas.  Stimulus 2.0 makes it more difficult for energy companies to claim this tax credit, exposing their worldwide income to international double taxation—potentially shipping jobs overseas to avoid paying taxes twice.

Dual Capacity Discrimination Against Oil and Gas Employers (Sec. 442).  In addition to the dual capacity rule repeal of Sec. 441, this provision of Stimulus 2.0 makes it even more difficult for oil and gas employers to avoid double taxation than it does for all other taxpayers to avoid double taxation.  It adds insult to the injury of dual capacity rule repeal.

What do you think? 

Will any of these 14 tax hikes help create jobs?

Source:  Americans for Tax Reform

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The Road to Serfdom

Zuckerman: Obama's Done Everything Wrong

Obama punted on the economy and reversed the fortunes of the Democrats in 365 days.

He’s misjudged the character of the country in his whole approach. There’s the saying, “It’s the economy, stupid.” He didn’t get it. He was determined somehow or other to adopt a whole new agenda. He didn’t address the main issue.

This health-care plan is going to be a fiscal disaster for the country. Most of the country wanted to deal with costs, not expansion of coverage. This is going to raise costs dramatically.

In the campaign, he said he would change politics as usual. He did change them. It’s now worse than it was. I’ve now seen the kind of buying off of politicians that I’ve never seen before. It’s politically corrupt and it’s starting at the top. It’s revolting.

Five states got deals on health care—one of them was Harry Reid’s. It is disgusting, just disgusting. I’ve never seen anything like it. The unions just got them to drop the tax on Cadillac plans in the health-care bill. It was pure union politics. They just went along with it. It’s a bizarre form of political corruption. It’s bribery. I suppose they could say, that’s the system. He was supposed to change it or try to change it.

Even that is not the worst part. He could have said, “I know. I promised these things, but let me try to do them one at a time.” You want to deal with health care? Fine. Issue No. 1 with health care was the cost. You know I think it was 37 percent or 33 who were worried about coverage. Fine, I wrote an editorial to this effect. Focus on cost-containment first. But he’s trying to boil the ocean, trying to do too much. This is not leadership.

• More Daily Beast opinion on Obama’s first year Obama’s ability to connect with voters is what launched him. But what has surprised me is how he has failed to connect with the voters since he’s been in office. He’s had so much overexposure. You have to be selective. He was doing five Sunday shows. How many press conferences? And now people stop listening to him. The fact is he had 49.5 million listeners to first speech on the economy. On Medicare, he had 24 million. He’s lost his audience. He has not rallied public opinion. He has plunged in the polls more than any other political figure since we’ve been using polls. He’s done everything wrong. Well, not everything, but the major things.

I don’t consider it a triumph. I consider it a disaster.

One business leader said to me, “In the Clinton administration, the policy people were at the center, and the political people were on the sideline. In the Obama administration, the political people are at the center, and the policy people are on the sidelines.”

I’m very disappointed. We endorsed him. I voted for him. I supported him publicly and privately.

I hope there are changes. I think he’s already laid in huge problems for the country. The fiscal program was a disaster. You have to get the money as quickly as possible into the economy. They didn’t do that. By end of the first year, only one-third of the money was spent. Why is that?

He should have jammed a stimulus plan into Congress and said, “This is it. No changes. Don’t give me that bullshit. We have a national emergency.” Instead they turned it over to Harry Reid and Nancy Pelosi who can run circles around him.

It’s very sad. It’s really sad.

He’s improved America’s image in the world. He absolutely did. But you have to translate that into something. Let me tell you what a major leader said to me recently. “We are convinced,” he said, “that he is not strong enough to confront his enemy. We are concerned,” he said “that he is not strong to support his friends.”

The political leadership of the world is very, very dismayed. He better turn it around. The Democrats are going to get killed in this election. Jesus, looks what’s happening in Massachusetts.

It’s really interesting because he had brilliant, brilliant political instincts during the campaign. I don’t know what has happened to them. His appointments present somebody who has a lot to learn about how government works. He better get some very talented businesspeople who know how to implement things. It’s unbelievable. Everybody says so. You can’t believe how dismayed people are. That’s why he’s plunging in the polls.

I can’t predict things two years from now, but if he continues on the downward spiral he is on, he won’t be reelected. In the meantime, the Democrats have recreated the Republican Party. And when I say Democrats, I mean the Obama administration. In the generic vote, the Democrats were ahead something like 52 to 30. They are now behind the Republicans 48 to 44 in the last poll. Nobody has ever seen anything that dramatic.

Mortimer B. Zuckerman is chairman and editor in chief of U.S. News & World Report and publisher of the New York Daily News. He is also the co-founder and chairman of Boston Properties Inc. He is a trustee of the Council on Foreign Relations, the Washington Institute for Near East Studies, and the International Institute of Strategic Studies.

Source: The Daily Beast

Celebrating Obama's One Year Anniversary

Only 6% of Eligible Homeowners Helped From Obama's Housing Program

Making Home Affordable Program hasn't helped enough, some say

(CNN) -- When President Obama unveiled the Making Home Affordable Program in March, he said it would help "responsible folks who have been making their payments" reduce their monthly mortgage bills and avoid losing their homes to foreclosure.

The Making Home Affordable Program aims to help homeowners avoid losing their homes to foreclosures.

But six months into the program, only 6 percent of the 4 million eligible homeowners have gotten help. A lot more say they've been frustrated with the runaround they've been getting from lenders.

Are the new program's growing pains responsible for the slow start, as bankers say, or is pain to their bottom lines really preventing the program from working, as critics say?

The Making Home Affordable Program is supposed to work this way:

In return for billions of dollars in taxpayer bailout money, banks would offer loans that would reduce troubled borrowers' monthly mortgage payments to 31 percent of their income. To qualify, a homeowner must have an income and must live in the house, and that house can't be worth more than $730,000.

The bank is also allowed to calculate the value of the mortgage against the profit it would make from a foreclosure.

Banks are prohibited from selling a house in foreclosure while the homeowner is being considered for an adjustment. The Treasury Department oversees the program, and the banks signed contracts with Treasury binding them to cooperate. Watch more about how the program has worked so far

Treasury Secretary Timothy Geithner has been so unhappy with the program's pace that he called in lenders for a meeting and demanded they do better.

In a July 9 letter to one servicer, JP Morgan, Geithner and Shaun Donovan, secretary of Housing and Urban Development, wrote "there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we share."

They called on the banks to hire more staff, expand their call centers and allow homeowners "an escalation path for borrowers dissatisfied with the service they have received."

The mortgage industry's top lobbyist says any problems to date are the growing pains associated with getting such a massive program up and running.

"It is working, and it needs to be given some time," says John Courson, head of the Mortgage Bankers Association. He says banks are still staffing up and getting the program off the ground. "It took 90 days to get out the rules and the procedures and the forms, and so that's a fairly new program," he said.

Courson says that lenders are still "training more and more staff as they are getting more and more people who are familiar with this program."

He insists that the banks want to cooperate.

"It's in the banks' best interest to work with those borrowers to keep those loans on the books and avoid foreclosure," Courson said.

But critics say that the program works against the banks' best interests, as the homeowners who most need the program are the riskiest bets.

"If the borrower is really in trouble, [the lenders] probably don't want to do the modification, because they think there's a good chance the borrower will redefault, and they will do a lot of work and they won't collect money," said Paul Willen, an economist with the Boston Federal Reserve who has studied bank foreclosures and modifications.

"The problem with this is in some deep sense, you can't penalize the banks for acting in self-interest. It's a for-profit business."

Others are critical of the voluntary nature of the program and the Obama administration's hands-off relationship with lenders.

The Treasury Department official charged with overseeing the program insists it's "off to a strong start, with hundreds of thousands of trial modifications already underway."

Assistant Secretary for Financial Institutions Michael Barr acknowledges that "servicer performance has been uneven, but servicers have committed to ramping up efforts to improve the process for borrowers," and he insists that "the administration will hold these institutions accountable for their progress."

He says Treasury is on track to help 3 million to 4 million homeowners in three years.

Diane Thompson of the National Consumer Law Center has a theory on why the Obama administration isn't getting tougher with the banks: "This is a voluntary program. I think Treasury has been very concerned to make sure that servicers [the banks] are willing to participate."

She's convinced that banks will improve their track record only if they're forced to make loans.

"Until it's made a mandatory program, I think we will not see a significant drop in foreclosures," Thompson said.

Another problem with the program is that banks don't always have the final say.

Many of these mortgages are held by private investors, and the bank simply acts as a middleman. If investors think they can make more money by foreclosing than modifying the loan, experts say the bank is powerless to override that decision.

Susan Wachter, professor of real estate and finance at the Wharton School, explains, "These are contracts. The government does not have the right to rescind contracts. The government can legislate all they want, but there can be lawsuits."

Willen adds: "What's upsetting about this is that with Making Home Affordable, what you ended up with may be worse [than doing nothing]. We're giving more money to banks, and not preventing many foreclosures."

The Treasury Department has begun stepping up pressure on banks. This month, it began publicly reporting the number of the program's loans the banks had offered, as a way to shame banks into better participation rates.

While JP Morgan-Chase has enrolled 20 percent of its eligible customers and Citibank 15 percent, two banks that got the biggest bailouts have some of the lowest enrollment rates, according to Treasury: Wells Fargo has enrolled 6 percent of eligible customers, and Bank of America 4 percent.

Both banks say that those numbers are misleading -- that they have many more offers in the pipeline and have increased staffing.

Bank of America also says it is bigger than other banks, so it has more applicants to process. Wells Fargo also says that it has refinanced many hundreds of thousands of loans outside of the government program.

Courson said many other banks are also offering their own mortgage modification programs, and if you count those, "a million and a half borrowers were assisted in the first six months in this year."

Multiple administration officials insist to CNN that there is adequate oversight of the program and that the Treasury Department has enlisted Freddie Mac to monitor the banks.

A Freddie Mac official, who would speak only on the condition of anonymity because it is acting "at the direction of Treasury," told CNN that its investigators visit banks, but only after giving the banks' management notice that they're coming.

The agency reviews loan documents, but only those that lenders provide. There are no surprise visits, no tape recordings of bank calls to assure quality assurance, and no way to respond to individual homeowner complaints.

Recently, Freddie Mac began random reviews of cases in which homeowners were denied Making Home Affordable loans. So far, Freddie Mac has not found a single instance of noncompliance worth referring to the Treasury Department for a penalty.

The Treasury Department was unable to show CNN any instance of a lender being penalized for breaking the program's rules.

By Jessica Yellin - CNN National Political Correspondent

I have personally had the experience of dealing with this program and system to help a family member who needed some help trying to wade through this program.  It is a nightmare!  The people who need the program the most, don’t qualify for help and then only 6% of the people who do qualify have received help.  Another Obamanomics nightmare program that didn’t work!  Ask Marion~

Posted:  Knowledge Creates Power

Related Resources: 

• The Truth About the Economy… Obamanomics Is a Failure~
• U.S. Raises Estimate for 10-Year Deficit to $9 Trillion as Bernanke – Tapped by Obama to Continue as Fed Chairman??
• Warren Buffett Joins Critics on Obamanomics:  Too Much Spending – Too Much Debt – Not Sustainable…
• The Failure of Obamanomics
• Obamanomics:  Naive, or Intentionally Destructive
• Why the ‘O’-ministration will implode in weeks
• Renters Left Hanging in the Middle in Foreclosure Proceedings
• Meltdown
• Money Mischief
• The Housing Boom and Bust

The Truth About the Economy… Obamanomics Is a Failure!

This week we found out that Team Obama was off by 2 Trillion Dollars. Hello? In ten years we will be 9 trillion dollars, not $7 trillion, in debt… and counting; and that is without so-called Healthcare reform or Cap and Trade Spending. One Trillion Dollars equals one hundred million dollars. How can you be in charge of the economy, let alone the Country, and be off by 200 hundred million dollars and claim that you know what you are doing? You can’t! You are either incompetent or lying!! Take your pick.

Also, let us remember that most of the debt doesn’t kick in until years 11 through 20.

Then, the real unemployment figures, including all the people who have dropped off the unemployment rolls, cannot find work or are working part-time… which are not part of the official government figures is between 14 and 16 %, depending who is compiling. There are counties in California that are now at 20% unemployment. What happened to the 400 million jobs saved and earned? 40% of the jobs lost are manufacturing and construction jobs that aren’t coming back. And if Cap and Tax, uh, Trade really does pass the Senate at some point, there will be more job losses. In every country where a forced green program has been implemented, there has been a loss of permanent jobs and a pretty quick turn-around loss of temporary jobs.

And the recent slight upsurge in the economy has come to us to by way of a $700+ Billion Stimulus Bill, a Cash for Clunkers Program, and huge incentives and discounts for first time home buyers, mostly buying distressed and discounted properties.

Add to this higher taxes for cigarettes, junk food and alcohol. What was that about no tax increases for people making under $250,000?

Then we are seeing utility shortages… like water in California. The government is asking Americans to cut back in their use. Most have complied; if not they are fined. Then once everyone has cut back and does without, like good citizens, the government will realize that with less usage, comes lower tax intakes, which will cause them to up the prices to recoup those taxes. Then when the shortage is over and you are finally allowed to use the normal amount again, the cost will remain at the higher rate. Explain that to the seniors living on a fixed income, many of whom have lost their nest eggs and retirement investments due to the economy, and now won’t be getting a cost of living increase for the next 2-years… because fuel costs have ‘temporarily’ dropped. And let's not forget, Obama himself told us that Cap and Trade and moving to a green economy, which Australia, China, India, Spain etc have abandoned or refused to support, "will" up the costs of energy for all Americans.

Add this all up and it spells trouble!!!

And now Team Obama and the Dems want to add another $1 Trillion to $1.6 Trillion to the staggering debt for a Healthcare Bill that everyone is realizing won’t work and most Americans don’t want. And let's remember:

• The White House was just 2 Trillion off in their debt estimates.

and

• It is impossible to cover more people, maintain or improve healthcare, and cut costs!

If you think healthcare is expensive now… wait until it is free.

Ask Marion/Marion Algier

• Green Hell
• Glenn Beck's Common Sense
• The End of Prosperity
• Money Mischief
• The Housing Boom and Bust

Warren Buffett Joins Critics on Obamanomics: Too Much Spending – Too Much Debt – Not Sustainable: Stop Spending, Stop Printing Money and No New Big Pr

Double Dip Recession Around the Corner

Times Topics: Warren E. Buffett

IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.

To be sure, we’ve been doing this for a reason I resoundingly applaud. Last fall, our financial system stood on the brink of a collapse that threatened a depression. The crisis required our government to display wisdom, courage and decisiveness. Fortunately, the Federal Reserve and key economic officials in both the Bush and Obama administrations responded more than ably to the need.

They made mistakes, of course. How could it have been otherwise when supposedly indestructible pillars of our economic structure were tumbling all around them? A meltdown, though, was avoided, with a gusher of federal money playing an essential role in the rescue.

The United States economy is now out of the emergency room and appears to be on a slow path to recovery. But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.

To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 percent of gross domestic product. This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.

Because of this gigantic deficit, our country’s “net debt” (that is, the amount held publicly) is mushrooming. During this fiscal year, it will increase more than one percentage point per month, climbing to about 56 percent of G.D.P. from 41 percent. Admittedly, other countries, like Japan and Italy, have far higher ratios and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this one and we will find out.

An increase in federal debt can be financed in three ways: borrowing from foreigners, borrowing from our own citizens or, through a roundabout process, printing money. Let’s look at the prospects for each individually — and in combination.

The current account deficit — dollars that we force-feed to the rest of the world and that must then be invested — will be $400 billion or so this year. Assume, in a relatively benign scenario, that all of this is directed by the recipients — China leads the list — to purchases of United States debt. Never mind that this all-Treasuries allocation is no sure thing: some countries may decide that purchasing American stocks, real estate or entire companies makes more sense than soaking up dollar-denominated bonds. Rumblings to that effect have recently increased.

Then take the second element of the scenario — borrowing from our own citizens. Assume that Americans save $500 billion, far above what they’ve saved recently but perhaps consistent with the changing national mood. Finally, assume that these citizens opt to put all their savings into United States Treasuries (partly through intermediaries like banks).

Even with these heroic assumptions, the Treasury will be obliged to find another $900 billion to finance the remainder of the $1.8 trillion of debt it is issuing. Washington’s printing presses will need to work overtime.

Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

I want to emphasize that there is nothing evil or destructive in an increase in debt that is proportional to an increase in income or assets. As the resources of individuals, corporations and countries grow, each can handle more debt. The United States remains by far the most prosperous country on earth, and its debt-carrying capacity will grow in the future just as it has in the past.

But it was a wise man who said, “All I want to know is where I’m going to die so I’ll never go there.” We don’t want our country to evolve into the banana-republic economy described by Keynes.

Our immediate problem is to get our country back on its feet and flourishing — “whatever it takes” still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.

Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress.

Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

Don't Let Obama "Devour" Your Wealth!

Obama's Dangerous "Eating Problem." Don't Let it Gobble You Up...

Dear Concerned American,

President Obama keeps lecturing about our “obesity epidemic.” But he’s the one who can’t stop eating (or smoking)!

No, not food. It’s worse! Obama is devouring the entire free-enterprise system.

In his first 100 days as president, Obama gobbled up two major automakers, wolfed down nearly 600 banks, gorged on blue-chip companies, and scarfed down the U.S. credit industry. Now he wants dessert.

President “Obama the Hungry” makes King Henry VIII look like a compulsive dieter!
I know something about overeating. It can kill you. Back when I was governor of Arkansas, I was so overweight I developed Type II diabetes. Doctors told me to lay down the knife and fork -- or else. That scared me. I cut the calories and lost 110 pounds. Only then did I regain my health.

Does bloat scare Obama? Heck no. He’s hungry for more! Fresh from gulping down $800 billion of our money to load up his Washington smorgasbord, he’s planning yet another massive banquet. Obama wants to belly up to the table and swallow the best health care system in the world. And you and I will pay the tab for this gargantuan pig-out!

As sure as heartburn follows a chili-dog, this massive “Obama-binge” will trigger hyperinflation. There’s only one way for the President to pay for this feast and you know what it is. Yes, get those presses rolling and print trillions of inflated dollars.

I’ll bet you’re thinking -- well, what can I do about it? True enough, Obama can pretty much do what he wants -- at least until the 2010 mid-term elections come along and we Americans can send him a “slim-down or else” message.

But right now, you and I need to protect the money we’ve earned and invested over the years -- before Obama’s hyperinflation chews our buying power down by multiple percentage points. This is a serious concern, believe me. It’s so serious I won’t pretend, as a politician and talk-show host, to have the answers for you. But I know someone who does.

I urge you to consider the proven financial guidance of Doug Fabian -- the renowned investing advisor who saw the financial meltdown of 2008 coming and saved a whole lot of people a whole lot of money.

Subscribers to Successful Investing, Doug’s newsletter, knew the meaning of terms like “housing bubble” and “sub-prime” long before they became headline news and the source of financial misery for millions.

This is what Doug wrote in 2006, nearly two years before the crash:

“Pay little heed to the real estate industry’s PR campaign to play down the coming housing price slump. It’s happening. The bottom is falling out for many banks, investors, and homeowners right now.”

This is what Doug is writing today:

“Never mind the endless speculation about inflation and interest rates -- they’re going up.”

Doug ’s not just warning his readers about hyperinflation, he’s steering them to investments that make money during inflationary periods. He reminds us that many fortunes were made in the 1970s when America was ravaged by high inflation and brought to the brink of collapse by Jimmy Carter -- a president eerily similar to Barack Obama.

Look, I’m no investing wizard. But I invest. I have to. So do you. Counting on Social Security while Obama is in office is a little like saying, “The Light Brigade is about to charge? Sign me up!”

But having someone with the proven know-how and track record of Doug Fabian is a comfort. That’s some track record, by the way. Successful Investing has generated double-digit annual returns for ordinary investors for 32 years and counting. Best of all, Doug does all the work for you.

Don’t just take my word. Investor’s Business Daily called Doug “one of the best market timers in the business.” And The Hulbert Financial Digest -- the watchdog of investing newsletters -- rated Doug’s trading services in the Top 10 for 2008 -- out of 186 financial publications over all.

Count on it, the “Obama-binge” will result in hyperinflation. ($800 billion in government spending makes it all but inevitable). You can’t control that. But when the day of reckoning comes, you can be one of the few whose portfolio is already adapted to profit from it. Could you ask for anything better? Well, you can. But you’ll have to wait till 2012 before we elect a new president!

Sincerely,

Mike Huckabee

GM May Need More U.S. Job Cuts as Buyouts Fall Short

Aug. 3 (Bloomberg) -- General Motors Co. may have to cut more U.S. hourly jobs after an offer of buyouts and early retirements fell about 7,500 workers short of the reorganized automaker’s target.

The possibility of layoffs was disclosed today by Sherrie Childers Arb, a spokeswoman, in an interview after GM announced that more than 6,000 United Auto Workers members, or 11 percent of the hourly workforce, left the company on Aug. 1.

GM’s latest voluntary exits pushed the total of U.S. hourly workers leaving through buyouts and retirement offers to about 66,000 since 2006. The biggest domestic automaker is shrinking its workforce to match reductions including the shutdown of 14 U.S. plants and 3 warehouses by the end of 2011.

“It’s not surprising they didn’t reach their goal,” said Dennis Virag, president of Automotive Consulting Group Inc. in Ann Arbor, Michigan. With U.S. unemployment at 9.5 percent in June, “workers are more reluctant to accept a buyout because the prospects for other employment are more challenging.”

GM aims to eliminate 13,500 hourly positions in 2009, trimming that payroll to about 40,500 jobs, said Tom Wilkinson, a spokesman. Detroit-based GM began the year with about 61,000 U.S. hourly jobs and cut that total to about 54,000 at the end of April with buyouts and early retirements.

Moving Jobs

Any layoffs probably wouldn’t total 7,500, Childers Arb said. Some employees are likely to leave on their own or retire rather than relocate once GM shuffles work among its facilities, dropping jobs in some locations while keeping others, she said. GM hasn’t said where the job cuts will take place.

Hourly workers who took the buyout and retirement offers are receiving cash payments of $20,000 to $115,000 as well as $25,000 vehicle vouchers.

Chief Executive Officer Fritz Henderson is also paring the U.S. salaried workforce and chopping its eight domestic brands in half.

GM left a government-backed bankruptcy on July 10 as a new company whose largest shareholder is the U.S. Treasury. Losses at predecessor General Motors Corp. totaled $88 billion since the company last posted an annual profit in 2004.

To contact the reporter on this story: Katie Merx - in Southfield, Michigan, at kmerx@bloomberg.net

Source: Bloomberg.com

Posted: Knowledge Creates Power

$23.7 Trillion to Fix Financial System?

In New Report, Neil Barofsky Says It's Possible Government Could Spend $23.7 Trillion to Fix Financial System

Sitting down?

In a July 2009 report on government efforts to fix the financial system, Neil Barofsky, the special inspector general for the TARP, says total government support has the potential to reach $23.7 trillion.

(Brendan Hoffman/Getty Images)

"The total potential federal government support could reach up to $23.7 trillion," says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government's efforts to fix the financial system.

Yes, $23.7 trillion.

"The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn't even imaginable," said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. "If you spent a million dollars a day going back to the birth of Christ, that wouldn't even come close to just $1 trillion -- $23.7 trillion is a staggering figure."

Granted, Barofsky is not saying that the government will definitely spend that much money. He is saying that potentially, it could.

At present, the government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis.

Barofsky's estimate means that if each federal agency spends the maximum potential amount involved in these 50 different initiatives -- if the Federal Reserve ends up spending $6.8 trillion on its programs. If the Treasury Department spends $4.4 trillion, if the Federal Deposit Insurance Corporation spends $2.3 trillion, and so on -- then the numbers add up to a total of $23.7 trillion.

That figure, Barofsky notes, is designed to "suggest the scale and scope of these efforts and not to provide a firm financial statement." It is not a figure that has been evaluated to give an estimate of likely net costs to the American taxpayer. "The actual potential for losses," he says, "is likely to be lower."

But in his new quarterly report to Congress that will be released Tuesday, the watchdog warns that hundreds of billions of taxpayer dollars could be lost if the government does not make certain changes to these programs. The Treasury Department, he cautions, needs to increase the transparency of the $700 billion TARP program, which he says has grown to an unprecedented scope and scale.

"Although Treasury has taken some steps toward improving transparency in TARP programs, it has repeatedly failed to adopt recommendations that SIGTARP believes are essential to providing basic transparency and fulfill Treasury's stated commitment to implement TARP with the highest degree of accountability and transparency possible," Barofsky says in the report.

Barofsky said his office currently has 35 ongoing civil or criminal investigations.

Treasury Should Require TARP Recipients to Report on Use of Funds, Says Barofsky

Barofsky notes that there are currently four specific recommendations that the Treasury Department has not adopted. The department, he believes, should require all TARP recipients to report on their use of funds. The department should also report on the values of its TARP portfolio so taxpayers know about the value of their investments; disclose the identity of any TALF borrowers; and disclose tradings, holdings and valuations of assets of the public-private investment funds that will be buying toxic assets from banks.

This public-private investment program is a key source of concern for the watchdog. In the program, a handful of selected funds will purchase toxic assets -- like mortgage-backed securities -- from banks in an effort to cleanse their balance sheets and help them increase lending.

In his last quarterly report in April, Barofsky cautioned that many aspects of the toxic asset program left it vulnerable to fraud, waste and abuse, such as conflicts of interest for fund managers, collusion with fund managers, money laundering and misuse with the Fed's lending program, known as the TALF.

Since then, Treasury has incorporated many of the watchdog's recommendations, so now "the program has a significantly improved compliance and fraud-prevention regime than that initially proposed," Barofsky says. However, he warns that "there remain some significant areas in which Treasury's plan for PPIP falls short."

One such area is the lack of an informational barrier -- or a wall -- between fund managers making investment decisions on behalf of the program and employees of the fund management company who manage funds that are not part of the program. A fund manager, Barofsky warns, "could generate massive profits in its non-PPIF funds as a result of an unfair advantage."

Treasury has declined to put such a wall in place.

"Failure to impose a wall will leave Treasury vulnerable to an accusation that has already been leveled against it -- that Treasury is using TARP to pick winners and losers and that, by granting certain firms PPIF manager status, it is benefiting a chosen few at the expense of the dozens of firms that were rejected, of the market as a whole, and of the American taxpayer," Barofsky says. "The reputational risk is not one that can be readily measured in dollars and cents, but is rather a risk that could put in jeopardy the fragile trust the American people have in TARP and, by extension, their Government."

"Such transparency not only dissuades misconduct and promotes sound management but also promotes a better understanding of PPIP and thus enhances the credibility of PPIP and TARP more broadly," he says. "Even more importantly, the most significant investors in each PPIF, the American taxpayers, have a right to know the status of their investments. The lack of transparency as to what use TARP funds were put by recipients in other TARP programs, in SIGTARP's view, has damaged the credibility of TARP and therefore may have threatened its viability. Treasury should not repeat that apparent error with PPIP."

However, the department, Barofsky says, plans to disclose "no more than the bare minimum required by statute."

With nearly $24 trillion potentially flying out of federal coffers, the watchdog wants the government to do a lot more than just "the bare minimum."

When Barofsky testifies before the House Oversight and Government Reform Committee on Tuesday, Congress is expected to sound off on the watchdog's findings.

In a separate report released Monday, Barofsky said he obtained responses from banks on what they did with TARP funds, something that the Treasury Department has refused to do. Many of the banks, he said, used some funds to make investments, buy other banks and pay off debts.

"This administration promised an 'unprecedented level' of accountability and oversight, but as this report reveals, they are falling far short of that promise," Issa said. "In fact, the Treasury Department is actively obstructing transparency. The American people deserve to know how their tax dollars are being spent -- especially considering they are the ones who are footing the bill."

Source: abcnews.go.com/Business/Politics / Fox Nation

Posted: Knowledge Creates Power

President Obama's Failed Stimulus

Vice President Biden warned us that there would be "waste" in the stimulus bill. The latest proof comes from the General Services Administration, which announced that the Obama administration is spending $18 million to redesign the Recovery.gov website to show Americans just where their hard-earned tax dollars are being spent. This is unreal and outrageous. If the Obama administration is willing to devote $18 million in taxpayer dollars to a website, imagine what government-run health care will charge taxpayers for an MRI.

In response, the RNC released a web video on President Obama's failed stimulus plan, entitled "Nothing," which can be viewed here:

Don't let President Obama and Congressional Democrats waste your tax dollars or divert attention away from the failure of their economic plan. Pick up the phone now. Call the White House at 202-456-1111 and tell President Obama you have had enough.

Sincerely,

Michael Steele
Chairman, Republican National Committee

After Supporting Obama's Campaign, Powell Now Skeptical of President's Spending Priorities

Colin Powell, who broke ranks with the Republican Party last year to endorse Barack Obama, is now concerned that the president's agenda is increasing the size of government and the federal debt to alarming levels.

Colin Powell, who broke ranks with the Republican Party last year to endorse Barack Obama, now worries that the president's agenda is increasing the size of government and the federal debt to alarming levels.

"I'm concerned at the number of programs that are being presented, the bills associated with these programs and the additional government that will be needed to execute them," the former secretary of state told CNN in an interview to air Sunday.

Powell offered the president some standard Republican advice:

"The right answer is, give me a government that works, keep it as small as possible," said Powell, who said he stays in touch with Obama and has spoken to him recently.

Obama wants to overhaul the health care system and take on climate change while also helping the country emerge from the recession.

"I think one of the cautions that has to be given to the president -- and I've talked to some of his people about this -- is that you can't have so many things on the table that you can't absorb it all. And we can't pay for it all," Powell said.

"And I never would have believed that we would have budgets that are running into the multi-trillions of dollars, and we are amassing a huge, huge national debt that, if we don't pay for in our lifetime, our kids and grandkids and great grandchildren will have to pay for it."

It's not a new theme for Powell.

He complained about the government's size and intrusiveness in his 1996 speech to the Republican National Convention. He said then that the nation no longer could afford more entitlements, higher taxes and more bureaucracy. In the interview with CNN's "State of the Union" that is to air Sunday, Powell said he hasn't changed his mind.

"Keep it as small as possible. Keep the tax burden on the American people as small as possible, but at the same time, have government that is solving the problems of the people," he said.

He said Obama "has to start really taking a very, very hard look at what the cost of all this is. And how much additional bureaucracy and will it be effective bureaucracy."

CNN released excerpts of the interview in advance of the broadcast. - The Associated Press contributed to this report.

Posted: Knowledge Creates Power

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Biden Acknowledges Administration 'Misread' The Economy

Vice President Biden acknowledged today that the administration underestimated the depth of the economic recession months ago as it prepared a recovery package that is only now beginning to take effect.

"We misread how bad the economy was, but we are now only about 120 days into the recovery package," Biden said on ABC's "This Week." "The truth of the matter was, no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having distributed the bulk of the money."

Figures released last week showed that the national unemployment rate has reached 9.5 percent, and that the economy is still shedding nearly half a million jobs a month. In reality if you factor in all the people who have dropped off the unemployment roles but haven’t found work, the unemployment figure is actually at 16% and then their are 4 other groups to factor in… people who have lost their jobs but got severance package so either haven’t hit the unemployment rolls yet or won’t qualify; people who lost their jobs over the past 3 to 4 years who gave up looking to replace their employment as the economy started its march downward; students who graduated this past year that have never found employment other than the part-time jobs they had while in school, and the group which includes seniors and people who were previously out of the job market that have to go back to work now because they’ve lost their investments that they counted on to supplement their incomes.

President Obama pushed through a $787 billion stimulus package within his first month in office to slow the economic slide by replacing retreating private-sector demand, in part, with government spending.

But criticism has been mounting from the left and right, albeit for different reasons, that the plan was misconceived.

Administration officials have argued for weeks that the economic projections made before Obama took office presented an overly optimistic view of the economy, a case Biden reiterated in blunt terms today.

Conservative critics have used the mounting job losses to argue that the stimulus package - a mix of government spending and tax cuts - should have been titled more toward the latter than it was.

Meanwhile, liberal economists such as Paul Krugman have argued for more public spending, just as the stimulus money begins trickling into the economy.

After acknowledging the economic "misreading," Biden said "the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in?"

"And we believe it is the right package given the circumstances we're in," he said.

Asked if a second stimulus package is needed, Biden said it is "premature to make that judgment."

Instead, he said, the administration will monitor the effect of the government spending in the coming months, as the public-works projects financed by federal funds move from the planning stage to the hiring and construction phase.

"And so this is just starting," Biden said. "The pace of the ball is now going to increase."

By Scott Wilson

Wow… Is anyone surprised. Everyone I know could have told them this and come up with better and less intrusive solutions without all their experts, czars and Ivy League educations. The unemployment situation is much worse than the administration’s figures show; the bank bailouts and stimulus plan is a failure with virtually no funds ever trickling down under Joe’s watch; nobody can get a loan and the next crisis, created by this administrations and their unbridled spending in all areas, is the debt crisis. Ask Marion~

National Debt Clock... Tick Tock

Posted: Knowledge Creates Power

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Reagan vs. Obama's Support for Freedom Fighters | The FOX Nation

Video: Reagan vs. Obama's Support for Freedom Fighters | The FOX Nation

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THE FAILURE OF OBAMANOMICS

The data is in for April. Here's what happened:

1. Household personal income (inflation adjusted) rose but every penny - and then some - went into savings or paying down debts. Consumer spending, on which Obama is betting to stimulate the economy, actually fell. None of the stimulus money was sent. None.

2. Meanwhile, to pay for this stimulus spending that didn't stimulate, Obama had to borrow so much money that long term interest rates have almost doubled since he took office, forcing postponement of abandonment of business expansion and hiring across the board.

What a record!

Here are the details. In April, personal household, inflation-adjusted income rose by $122 billion. Of that increase, one-third or $44 billion came from the government's stimulus program.

But while personal income was rising, household savings (which includes paying down credit card balances, mortgages, student loans, car loans, etc) rose by $132 billion -- $10 billion more than the rise in income. So personal consumption dropped 0.1%.’

The stimulus package was a total and complete failure. As predicted, as happened with Bush's 2008 tax cut, as happened with the Japanese stimulus packages of the 90s, fearful consumers sat on their money and wouldn't spend it. Keynesian economics didn't work. Again.

But the debt sure piled up. The deficit quadrupled and is sending interest rates soaring as the government elbows aside businesses and consumers at the loan window, all in a desperate effort to borrow enough money to spend enough money to stimulate the economy which isn't happening.

As we describe in our new book (out June 23rd) Catastrophe, Keynesian economics doesn't work. The theory for rational expectations has taken its place. Consumers are not idiots. They know that when their paycheck is fatter - either because of tax cuts or government spending - that it is not the beginning of nirvana but just a short term, one shot respite from hard times. They know the difference between standing in front on an electric fan and a windy day.

Barack Obama has fatally undermined our currency, our solvency, our financial stability, and - ultimately - our economy all to spend money that has had no economic effect!

Is Obama a failure? Not by his lights. His goal was never to stimulate the economy. His goal was to expand government spending and he used the recession as an excuse to do so. And, by this standard, he is a raging success. With the stimulus spending, the government proportion of GDP will rise from about 35% to about 40% and with health care "reform" it will go soaring into the mid-forties, bringing us to parity with Germany en route to France!

But the results are in: None of Obama's spending is doing anything to help the economy.

Of course, the process of household savings, designed to pay down debt, is very healthy. Economists call it de-leveraging. By the start of the recession, the debt American households owe had risen from 70% of their annual income in 1995 to 140% (excluding mortgages). Now it is on its way back down again. And, eventually, that will lead to a real recovery -- If Obama doesn't wreck the currency and bring on mega-inflation before then. (But he probably will).

By DICK MORRIS & EILEEN MCGANN – Author of Catastrophe
Published on DickMorris.com on June 3, 2009

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Posted: Knowledge Creates Power