Deficit Accountability Act of 2009

I think this is a novel idea. Please take time to contact your member of Congress today and request that they co-sponsor this legislation. Congress should not get a pay increase if they can't balance the books! This was introduced by Rep. Cliff Stearns (FL-6) and co-sponsored by Rep. Howard Coble (NC-6).


Deficit Accountability Act of 2009 (Introduced in House)

HR 201 IH


111th CONGRESS

1st Session

H. R. 201
To provide that no automatic pay adjustment for Members of Congress shall be made in the year following a fiscal year in which there is a Federal budget deficit.


IN THE HOUSE OF REPRESENTATIVES

January 6, 2009
Mr. STEARNS introduced the following bill; which was referred to the Committee on House Administration, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


--------------------------------------------------------------------------------


A BILL
To provide that no automatic pay adjustment for Members of Congress shall be made in the year following a fiscal year in which there is a Federal budget deficit.


Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Deficit Accountability Act of 2009'.

SEC. 2. EFFECT OF A BUDGET DEFICIT.

Section 601(a) of the Legislative Reorganization Act of 1946 (2 U.S.C. 31) is amended--

(1) in paragraph (2)(A), by striking `Subject to subparagraph (B),' and inserting `Subject to subparagraph (B) and paragraph (3),'; and

(2) by adding at the end the following:

`(3) An adjustment under paragraph (2) otherwise scheduled to take effect in a calendar year shall not be made if, as determined by the Office of Management and Budget, there was a deficit (as defined by section 3 of the Congressional Budget and Impoundment Control Act of 1974) in the preceding fiscal year.'.

A List of US Reps who Voted for HR 1586, Imposing a 90% Tax on Bonuses for TARP Recipients

What follows is a list of the US Reps who succumbed to populist fervor and voted for H.R. 1586, imposing a 90% tax on bonuses received by employees of certain TARP recipients (the bill was sponsored by Rep. Charles Rangel, D-NY, and co-sponsored by 51 other Democrats)

The bill, which passed 328-93, is widely believed to be an unconstitutional 'bill of attainder.'

243 Democrats and 85 Republicans voted for the bill; 6 Dems and 87 Repubs voted against it. 6 Dems and 4 Repubs did not vote.

Here is a list of representatives who voted, "Yea" on the bill. See if your congressman is on the list:

Yea HI-1 Abercrombie, Neil [D]
Yea NY-5 Ackerman, Gary [D]
Yea AL-4 Aderholt, Robert [R]
Yea NJ-3 Adler, John [D]
Yea LA-5 Alexander, Rodney [R]
Yea PA-4 Altmire, Jason [D]
Yea NJ-1 Andrews, Robert [D]
Yea NY-24 Arcuri, Michael [D]

Yea CA-43 Baca, Joe [D]
Yea WA-3 Baird, Brian [D]
Yea WI-2 Baldwin, Tammy [D]
Yea GA-12 Barrow, John [D]
Yea TX-6 Barton, Joe [R]
Yea CA-31 Becerra, Xavier [D]
Yea NV-1 Berkley, Shelley [D]
Yea CA-28 Berman, Howard [D]
Yea AR-1 Berry, Robert [D]
Yea IL-13 Biggert, Judy [R]
Yea CA-50 Bilbray, Brian [R]
Yea FL-9 Bilirakis, Gus [R]
Yea GA-2 Bishop, Sanford [D]
Yea NY-1 Bishop, Timothy [D]
Yea OR-3 Blumenauer, Earl [D]
Yea MO-7 Blunt, Roy [R]
Yea OH-16 Boccieri, John [D]
Yea CA-45 Bono Mack, Mary [R]
Yea AR-3 Boozman, John [R]
Yea OK-2 Boren, Dan [D]
Yea IA-3 Boswell, Leonard [D]
Yea VA-9 Boucher, Frederick [D]
Yea FL-2 Boyd, Allen [D]
Yea PA-1 Brady, Robert [D]
Yea IA-1 Braley, Bruce [D]
Yea AL-2 Bright, Bobby [D]
Yea FL-3 Brown, Corrine [D]
Yea SC-1 Brown, Henry [R]
Yea FL-5 Brown-Waite, Virginia [R]
Yea FL-13 Buchanan, Vern [R]
Yea NC-1 Butterfield, George [D]
Yea CA-44 Calvert, Ken [R]
Yea MI-4 Camp, David [R]
Yea VA-7 Cantor, Eric [R]
Yea LA-2 Cao, Anh [R]
Yea WV-2 Capito, Shelley [R]
Yea CA-23 Capps, Lois [D]
Yea MA-8 Capuano, Michael [D]
Yea CA-18 Cardoza, Dennis [D]
Yea MO-3 Carnahan, Russ [D]
Yea PA-10 Carney, Christopher [D]
Yea IN-7 Carson, André [D]
Yea LA-6 Cassidy, Bill [R]
Yea DE-0 Castle, Michael [R]
Yea FL-11 Castor, Kathy [D]
Yea KY-6 Chandler, Ben [D]
Yea MS-1 Childers, Travis [D]
Yea NY-11 Clarke, Yvette [D]
Yea MO-1 Clay, William [D]
Yea MO-5 Cleaver, Emanuel [D]
Yea SC-6 Clyburn, James [D]
Yea TN-9 Cohen, Steve [D]
Yea VA-11 Connolly, Gerald [D]
Yea MI-14 Conyers, John [D]
Yea TN-5 Cooper, Jim [D]
Yea CA-20 Costa, Jim [D]
Yea IL-12 Costello, Jerry [D]
Yea CT-2 Courtney, Joe [D]
Yea FL-4 Crenshaw, Ander [R]
Yea NY-7 Crowley, Joseph [D]
Yea TX-28 Cuellar, Henry [D]
Yea MD-7 Cummings, Elijah [D]
Yea PA-3 Dahlkemper, Kathleen [D]
Yea AL-7 Davis, Artur [D]
Yea IL-7 Davis, Danny [D]
Yea KY-4 Davis, Geoff [R]
Yea CA-53 Davis, Susan [D]
Yea OR-4 DeFazio, Peter [D]
Yea CO-1 DeGette, Diana [D]
Yea CT-3 DeLauro, Rosa [D]
Yea PA-15 Dent, Charles [R]
Yea FL-21 Diaz-Balart, Lincoln [R]
Yea FL-25 Diaz-Balart, Mario [R]
Yea WA-6 Dicks, Norman [D]
Yea MI-15 Dingell, John [D]
Yea TX-25 Doggett, Lloyd [D]
Yea IN-2 Donnelly, Joe [D]
Yea PA-14 Doyle, Michael [D]
Yea OH-1 Driehaus, Steve [D]
Yea TN-2 Duncan, John [R]
Yea MD-4 Edwards, Donna [D]
Yea TX-17 Edwards, Thomas [D]
Yea MI-3 Ehlers, Vernon [R]
Yea MN-5 Ellison, Keith [D]
Yea IN-8 Ellsworth, Brad [D]
Yea MO-8 Emerson, Jo Ann [R]
Yea NY-17 Engel, Eliot [D]
Yea CA-14 Eshoo, Anna [D]
Yea NC-2 Etheridge, Bob [D]
Yea CA-17 Farr, Sam [D]
Yea PA-2 Fattah, Chaka [D]
Yea CA-51 Filner, Bob [D]
Yea LA-4 Fleming, John [R]
Yea VA-4 Forbes, James [R]
Yea NE-1 Fortenberry, Jeffrey [R]
Yea IL-14 Foster, Bill [D]
Yea MA-4 Frank, Barney [D]
Yea NJ-11 Frelinghuysen, Rodney [R]
Yea OH-11 Fudge, Marcia [D]
Yea CA-24 Gallegly, Elton [R]
Yea PA-6 Gerlach, Jim [R]
Yea AZ-8 Giffords, Gabrielle [D]
Yea TX-20 Gonzalez, Charles [D]
Yea VA-6 Goodlatte, Robert [R]
Yea TN-6 Gordon, Barton [D]
Yea FL-8 Grayson, Alan [D]
Yea TX-9 Green, Al [D]
Yea TX-29 Green, Raymond [D]
Yea AL-5 Griffith, Parker [D]
Yea AZ-7 Grijalva, Raul [D]
Yea KY-2 Guthrie, Brett [R]
Yea IL-4 Gutierrez, Luis [D]
Yea NY-19 Hall, John [D]
Yea IL-11 Halvorson, Deborah [D]
Yea IL-17 Hare, Phil [D]
Yea CA-36 Harman, Jane [D]
Yea FL-23 Hastings, Alcee [D]
Yea NM-1 Heinrich, Martin [D]
Yea NV-2 Heller, Dean [R]
Yea CA-2 Herger, Walter [R]
Yea SD-0 Herseth Sandlin, Stephanie [D]
Yea NY-27 Higgins, Brian [D]
Yea IN-9 Hill, Baron [D]
Yea CT-4 Himes, James [D]
Yea TX-15 Hinojosa, Rubén [D]
Yea HI-2 Hirono, Mazie [D]
Yea NH-2 Hodes, Paul [D]
Yea MI-2 Hoekstra, Peter [R]
Yea PA-17 Holden, Tim [D]
Yea NJ-12 Holt, Rush [D]
Yea CA-15 Honda, Michael [D]
Yea MD-5 Hoyer, Steny [D]
Yea WA-1 Inslee, Jay [D]
Yea NY-2 Israel, Steve [D]
Yea IL-2 Jackson, Jesse [D]
Yea TX-18 Jackson-Lee, Sheila [D]
Yea TX-30 Johnson, Eddie [D]
Yea GA-4 Johnson, Henry [D]
Yea IL-15 Johnson, Timothy [R]
Yea NC-3 Jones, Walter [R]
Yea WI-8 Kagen, Steve [D]
Yea PA-11 Kanjorski, Paul [D]
Yea OH-9 Kaptur, Marcy [D]
Yea RI-1 Kennedy, Patrick [D]
Yea MI-5 Kildee, Dale [D]
Yea MI-13 Kilpatrick, Carolyn [D]
Yea OH-15 Kilroy, Mary Jo [D]
Yea WI-3 Kind, Ronald [D]
Yea IL-10 Kirk, Mark [R]
Yea AZ-1 Kirkpatrick, Ann [D]
Yea FL-22 Klein, Ron [D]
Yea FL-24 Kosmas, Suzanne [D]
Yea MD-1 Kratovil, Frank [D]
Yea OH-10 Kucinich, Dennis [D]
Yea NJ-7 Lance, Leonard [R]
Yea RI-2 Langevin, James [D]
Yea WA-2 Larsen, Rick [D]
Yea CT-1 Larson, John [D]
Yea IA-4 Latham, Thomas [R]
Yea CA-9 Lee, Barbara [D]
Yea NY-26 Lee, Christopher [R]
Yea MI-12 Levin, Sander [D]
Yea CA-41 Lewis, Jerry [R]
Yea GA-5 Lewis, John [D]
Yea IL-3 Lipinski, Daniel [D]
Yea NJ-2 LoBiondo, Frank [R]
Yea IA-2 Loebsack, David [D]
Yea CA-16 Lofgren, Zoe [D]
Yea NY-18 Lowey, Nita [D]
Yea NM-3 Lujan, Ben [D]
Yea MA-9 Lynch, Stephen [D]
Yea NY-25 Maffei, Daniel [D]
Yea NY-14 Maloney, Carolyn [D]
Yea IL-16 Manzullo, Donald [R]
Yea CO-4 Markey, Betsy [D]
Yea MA-7 Markey, Edward [D]
Yea GA-8 Marshall, James [D]
Yea NY-29 Massa, Eric [D]
Yea UT-2 Matheson, Jim [D]
Yea CA-5 Matsui, Doris [D]
Yea NY-4 McCarthy, Carolyn [D]
Yea TX-10 McCaul, Michael [R]
Yea CA-4 McClintock, Tom [R]
Yea MN-4 McCollum, Betty [D]
Yea WA-7 McDermott, James [D]
Yea MA-3 McGovern, James [D]
Yea NY-23 McHugh, John [R]
Yea NC-7 McIntyre, Mike [D]
Yea WA-5 McMorris Rodgers, Cathy [R]
Yea CA-11 McNerney, Jerry [D]
Yea FL-17 Meek, Kendrick [D]
Yea NY-6 Meeks, Gregory [D]
Yea LA-3 Melancon, Charles [D]
Yea FL-7 Mica, John [R]
Yea ME-2 Michaud, Michael [D]
Yea MI-10 Miller, Candice [R]
Yea CA-7 Miller, George [D]
Yea NC-13 Miller, R. [D]
Yea WV-1 Mollohan, Alan [D]
Yea KS-3 Moore, Dennis [D]
Yea WI-4 Moore, Gwen [D]
Yea VA-8 Moran, James [D]
Yea KS-1 Moran, Jerry [R]
Yea CT-5 Murphy, Christopher [D]
Yea PA-8 Murphy, Patrick [D]
Yea PA-12 Murtha, John [D]
Yea NY-8 Nadler, Jerrold [D]
Yea MA-2 Neal, Richard [D]
Yea VA-2 Nye, Glenn [D]
Yea MN-8 Oberstar, James [D]
Yea WI-7 Obey, David [D]
Yea MA-1 Olver, John [D]
Yea TX-27 Ortiz, Solomon [D]
Yea NJ-6 Pallone, Frank [D]
Yea NJ-8 Pascrell, William [D]
Yea AZ-4 Pastor, Edward [D]
Yea NJ-10 Payne, Donald [D]
Yea CO-7 Perlmutter, Ed [D]
Yea VA-5 Perriello, Thomas [D]
Yea MI-9 Peters, Gary [D]
Yea MN-7 Peterson, Collin [D]
Yea WI-6 Petri, Thomas [R]
Yea ME-1 Pingree, Chellie [D]
Yea PA-19 Platts, Todd [R]
Yea CO-2 Polis, Jared [D]
Yea ND-0 Pomeroy, Earl [D]
Yea NC-4 Price, David [D]
Yea FL-12 Putnam, Adam [R]
Yea WV-3 Rahall, Nick [D]
Yea NY-15 Rangel, Charles [D]
Yea MT-0 Rehberg, Dennis [R]
Yea WA-8 Reichert, Dave [R]
Yea TX-16 Reyes, Silvestre [D]
Yea CA-37 Richardson, Laura [D]
Yea TX-23 Rodriguez, Ciro [D]
Yea TN-1 Roe, David [R]
Yea KY-5 Rogers, Harold [R]
Yea AL-3 Rogers, Michael [R]
Yea MI-8 Rogers, Michael [R]
Yea CA-46 Rohrabacher, Dana [R]
Yea FL-16 Rooney, Thomas [R]
Yea IL-6 Roskam, Peter [R]
Yea FL-18 Ros-Lehtinen, Ileana [R]
Yea AR-4 Ross, Mike [D]
Yea NJ-9 Rothman, Steven [D]
Yea CA-34 Roybal-Allard, Lucille [D]
Yea CA-40 Royce, Edward [R]
Yea MD-2 Ruppersberger, C.A. [D]
Yea IL-1 Rush, Bobby [D]
Yea WI-1 Ryan, Paul [R]
Yea OH-17 Ryan, Timothy [D]
Yea CO-3 Salazar, John [D]
Yea CA-39 Sanchez, Linda [D]
Yea CA-47 Sanchez, Loretta [D]
Yea MD-3 Sarbanes, John [D]
Yea IL-9 Schakowsky, Janice [D]
Yea MI-7 Schauer, Mark [D]
Yea CA-29 Schiff, Adam [D]
Yea OH-2 Schmidt, Jean [R]
Yea IL-18 Schock, Aaron [R]
Yea OR-5 Schrader, Kurt [D]
Yea PA-13 Schwartz, Allyson [D]
Yea GA-13 Scott, David [D]
Yea VA-3 Scott, Robert [D]
Yea NY-16 Serrano, José [D]
Yea PA-7 Sestak, Joe [D]
Yea NH-1 Shea-Porter, Carol [D]
Yea CA-27 Sherman, Brad [D]
Yea IL-19 Shimkus, John [R]
Yea NC-11 Shuler, Heath [D]
Yea NJ-13 Sires, Albio [D]
Yea MO-4 Skelton, Ike [D]
Yea NY-28 Slaughter, Louise [D]
Yea WA-9 Smith, Adam [D]
Yea NJ-4 Smith, Christopher [R]
Yea TX-21 Smith, Lamar [R]
Yea OH-18 Space, Zachary [D]
Yea CA-12 Speier, Jackie [D]
Yea SC-5 Spratt, John [D]
Yea CA-13 Stark, Fortney [D]
Yea FL-6 Stearns, Clifford [R]
Yea MI-1 Stupak, Bart [D]
Yea OH-13 Sutton, Betty [D]
Yea TN-8 Tanner, John [D]
Yea CA-10 Tauscher, Ellen [D]
Yea MS-4 Taylor, Gene [D]
Yea NM-2 Teague, Harry [D]
Yea MS-2 Thompson, Bennie [D]
Yea CA-1 Thompson, C. [D]
Yea OH-12 Tiberi, Patrick [R]
Yea MA-6 Tierney, John [D]
Yea NV-3 Titus, Dina [D]
Yea NY-21 Tonko, Paul [D]
Yea NY-10 Towns, Edolphus [D]
Yea MA-5 Tsongas, Niki [D]
Yea OH-3 Turner, Michael [R]
Yea MI-6 Upton, Frederick [R]
Yea MD-8 Van Hollen, Christopher [D]
Yea NY-12 Velazquez, Nydia [D]
Yea IN-1 Visclosky, Peter [D]
Yea OR-2 Walden, Greg [R]
Yea MN-1 Walz, Timothy [D]
Yea TN-3 Wamp, Zach [R]
Yea FL-20 Wasserman Schultz, Debbie [D]
Yea CA-35 Waters, Maxine [D]
Yea CA-33 Watson, Diane [D]
Yea NC-12 Watt, Melvin [D]
Yea CA-30 Waxman, Henry [D]
Yea NY-9 Weiner, Anthony [D]
Yea VT-0 Welch, Peter [D]
Yea FL-19 Wexler, Robert [D]
Yea KY-1 Whitfield, Edward [R]
Yea OH-6 Wilson, Charles [D]
Yea VA-1 Wittman, Rob [R]
Yea VA-10 Wolf, Frank [R]
Yea CA-6 Woolsey, Lynn [D]
Yea OR-1 Wu, David [D]
Yea KY-3 Yarmuth, John [D]
Yea FL-10 Young, C. W. [R]
Yea AK-0 Young, Donald [R]
Not Voting LA-7 Boustany, Charles [R]
Not Voting TX-7 Culberson, John [R]
Not Voting TN-4 Davis, Lincoln [D]
Not Voting MA-10 Delahunt, William [D]
Not Voting NY-22 Hinchey, Maurice [D]
Not Voting CA-42 Miller, Gary [R]
Not Voting CA-38 Napolitano, Grace [D]
Not Voting TX-22 Olson, Pete [R]
Not Voting CA-19 Radanovich, George [R]
Not Voting IN-3 Souder, Mark [R]

Update: Michelle Malkin has a broken out a list of the 85 republicans who voted for the bill.

Dave Ramsey: How to deal with setbacks

by Dave Ramsey
www.daveramsey.com

(You can catch Dave Ramsey on a radio near you - or go to the FoxBusiness Network to watch his show)

Failure? I never encountered it. All I ever met were temporary setbacks. —Dottie Walters

We’ve all encountered setbacks. They’re just a part of life. But one thing makes the difference between a setback and a failure—your attitude. If you don’t believe that, hello! This is your wake-up call!

MyTotalMoneyMakeover.com members Carl and Tricia in Indiana are an amazing example to us all. For several months, they and their three youngest children have been surviving on as much as a 60% pay cut, all while maintaining a fully funded emergency fund and learning how to live on $60-a-week grocery budget. How have they done it?

According to Tricia, the biggest help has been simply having a plan and a six-month emergency fund socked away. They have made substantial sacrifices to maintain their long-term financial goals. Eating out has become a rare, almost celebratory occasion. Tricia cooks nearly all of their meals from scratch. She’s a true home economist who not only hunts for bargains but also home schools her three youngest children. They have avoided Murphy a couple of times thanks to a tax refund and squeezing extra dollars out of their monthly budget.

In addition to day-to-day family obligations, Tricia and Carl have been proactive in their community by helping their neighbors who are financially hurting and losing their jobs. They have hosted a money workshop and Financial Peace University, and they have also been mentoring four families in their hometown. They invite other couples over for dinner, discuss the Baby Steps, and show them how to apply the proven principles to their lives.

While most people would have interpreted Carl’s income drop as a devastating blow, Tricia and Carl have seen it as an opportunity to pass on the knowledge they’ve gained and continue to live on less than they make. Because of their dedication to planning and saving, their family is taking a vacation this year to the Grand Canyon!

See, there’s nothing flashy to it. Your attitude and decisions make a world of difference every day, despite everything going on around you. It takes discipline, creativity and sacrifice to win in all areas of your life. No one ever said it was easy, but most things in life that are worth it are not easy.

On this date in 1959...

March 15, 1959:
An 11-year-old girl living in Miami, Fla., sent her savings of $61 to President Dwight Eisenhower to be used to pay down the rising national debt. The fifth-grader had been saving for a horse. The debt had reached $285,578,690, not including another $422.6 million not subject to statutory limit.

Complaints pile up against debt collectors

By ALISON YOUNG
The Atlanta Journal-Constitution
Sunday March 15, 2009

Consumers complain that a Marietta debt collection firm uses deceit and abusive tactics to collect money, even when it isn’t owed, records show.

Enough complained that the Georgia Governor’s Office of Consumer Affairs began investigating last fall. It ordered Frederick J. Hanna & Associates to answer questions about collection practices, consumer disputes and what it does to ensure the validity of debts.

But for three months the state’s top consumer watchdog agency and the debt collector have been in a standoff.

Frederick J. Hanna & Associates says its tactics are none of the state agency’s business. Because it’s a law firm, the debt collector contends it is outside the consumer office’s jurisdiction. It refuses to answer the agency’s questions.

“We don’t feel like they’re entitled to anything. Period,” Frederick Hanna said. He said his firm gets 50,000 new debt files each month and its collection methods are legitimate.

The consumer office says it has a right to investigate whether the firm’s tactics are breaking state law. “If we perceive an infraction of the law, we don’t believe your status as a law firm will protect you,” said Bill Cloud, a spokesman for the consumer office.

A hearing is scheduled March 30 in Cobb County Superior Court and the outcome could have a significant impact on thousands of Georgia consumers targeted by debt collectors — especially those who don’t owe money.

Here and across the nation, consumers complained more about debt collectors than any other industry in 2008, according to new data from the Federal Trade Commission’s Consumer Sentinel Network.

The network, used by law enforcement, tracks complaints to the FTC, as well as to groups such as the Better Business Bureau, FBI, U.S. Postal Inspection Service, Social Security Administration and the National Consumers League.

Last month the FTC issued a report saying the debt collection legal system needs reform and the 1977 Fair Debt Collection Practices Act needs to be modernized to reflect changes in technology, debt and the collection industry.

While the FTC said timely payment of debts is important, it said the law needs changes to better ensure that collectors are going after the right people for the right amounts of money. The law also needs to mandate that collectors give consumers better information about their legal rights.

Complaints about debt collectors are on the rise and some of the tactics firms use are already illegal, Cloud said.

“A lot of them are buying up ‘zombie debt.’ It’s old debt you cannot collect anymore by normal means,” Cloud said. “It’s essentially debt renewal. To get you back on the hook they try to intimidate and try to berate you.”

Zombie debt, like the name implies, is debt — legitimate or not — that refuses to die. It may be debt that resulted from identity theft years ago that the original creditor wrote off. It may be a legitimate debt that is several years old, was already paid off or has been legally erased by bankruptcy. The debt gains new life when sold to a collection agency for pennies on the dollar.

In November, the state consumer office served an investigative demand notice, similar to a subpoena, on Frederick J. Hanna & Associates. It asked for documents about the firm’s collection practices, including those involving zombie debts. Officials with the consumer office declined to give details about the complaints they have received about the firm, citing the ongoing investigation.

The firm has an “F” rating with the BBB because of its complaint history, including failing to respond to consumer concerns, according to BBB records.

State officials are investigating potential violations of Georgia’s Fair Business Practices Act, according to the notice, including allegations the firm engaged in abusive or oppressive tactics prohibited under state and federal laws and allegations the firm used misleading and deceptive methods. The notice does not provide details or examples.

Hanna said Friday that if the consumer office wants to review a few specific files, he’d allow it. But he said he has hundreds of thousands of files and it is unreasonable to provide them all, as has been requested.

Until recently, it was unclear whether the state Fair Business Practices Act could be applied to debt collectors. In 2007, the Georgia Court of Appeals held that collection of a debt is a consumer transaction covered by the law.

Frederick J. Hanna & Associates, in documents filed in Cobb County Superior Court, says the consumer office is asking for an unreasonable amount of information. But beyond that, the debt collection law firm contends that the consumer office has no jurisdiction over the practice of law and therefore no jurisdiction over its activities. The consumer office is seeking an order from the court to force the firm to comply with its demand for documents and information.

State consumer officials have opened a similar investigation of Mann Bracken, a national debt collection law firm with an office in Atlanta. Mann Bracken also contends the consumer office doesn’t have jurisdiction, according to Fulton County court records. Lawyer conduct is regulated only by the State Bar and the Supreme Court of Georgia, the firm said in documents filed in court.

Hanna said Spotlight should not be focusing on debt collection firms. The problem is the debtors and the amount they owe, he said, adding that consumers should try to work with people like him.

Cloud warned that consumers should be careful about anything they say to a debt collector. Insist the firm send you written proof you owe the money, he said.

“If this is an old debt and you do not believe you owe this money, do not in any way, shape or form reaffirm this debt,” Cloud said. “They are probably recording you.”



————————————————


DEBT: KNOW YOUR RIGHTS

The federal Fair Debt Collection Practices Act prohibits debt collectors from using abusive or deceptive practices, such as threats of harm, harassing phone calls or misrepresenting what you owe. Here are some tips from the Federal Trade Commission:

Proof of debt: All collectors must send you a “validation notice” within five days after they first contact you. It must include how much you owe and what you need to do if you don’t think you owe the money.

Managing calls: Collectors can’t call you at inconvenient times, such as before 8 a.m. or after 9 p.m., unless you agree to it. They also can’t call you at work if you’ve told them that you are not allowed to take personal calls there.

Calls limited to others: Collectors are generally prohibited from discussing your debt with anyone besides you, your spouse or your attorney. They can only contact other people to find out your address, your home phone number and where you work.

For more information about your rights, go to: www.ftc.gov.


——————————


ID THEFT CAN CAUSE DEBT PROBLEM

David Vallin of Canton was one of the 4,430 Georgia consumers who complained about debt collectors last year to agencies in the FTC’s Consumer Sentinel Network.

Vallin said a firm with a Michigan address began calling and sending letters last fall, ordering him to pay $322 for cellphone bills unpaid since 2006.

Vallin assumed T-Mobile, where he’d once had an account, had simply made a mistake. “I knew I’d paid it off,” he said.

But after a few calls, Vallin said it was clear the bills weren’t his. They were for two separate accounts and five phone lines. But his name and Social Security number were on the accounts.

“I have no idea how they got my information,” said Vallin, 23, who complained to the BBB last fall and then turned to a private identity theft protection firm to help him freeze his credit against further fraud and sort out the debt collection mess.

Vallin said he learned last week that the matter is nearly resolved; he said the ID theft protection firm told him that T-Mobile has agreed that the accounts were fraudulent and is calling off the debt collector.

T-Mobile officials said they can’t comment on individual accounts. The company issued a statement saying such situations are rare and that the company has safeguards to prevent identity thieves from opening accounts.

Georgians filed 10,748 complaints last year about various types of identity theft — many involving the fraudulent opening of accounts or use of credit. Nearly 1,200 complaints involved phone or utilities fraud; 1,900 involved credit card fraud, according to the FTC’s data.

“Identity theft, that’s our No. 1 consumer education item,” said Fred Elsberry Jr., president of the BBB serving metro Atlanta, Athens and northeast Georgia.

You can find help at the Governor’s Office of Consumer Affairs’ detailed help guide. The FTC’s tips are at www.ftc.gov/idtheft.


——————————


WHERE TO COMPLAIN

Whether it’s an abusive debt collector, a problem with identity theft or one of the many scams consumers encounter each year, these groups can help:

Governor’s Office of Consumer Affairs (Georgia): 1-800-436-7442.

Better Business Bureau (Georgia): 404-766-0875, www.bbb.org

Federal Trade Commission: www.FTCComplaintAssistant.gov


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TOP CONSUMER COMPLAINTS

Georgia residents filed 27,470 complaints in 2008 with government and nonprofit watchdog agencies about fraud and other consumer issues. Here are the top categories:

Issue type Complaints

Debt collectors: 4,430

Internet services (providers, Web hosts) 1,455


Credit bureaus, report issues: 1,439

Shop-at-home, catalog sales: 1,239

Television, electronic media (reception, installation, billing, etc.): 1,229

Foreign money offers, counterfeit check scams: 1,017

Banks, lenders (predatory lending, overdraft charges, customer service, etc.): 911

Prizes, sweepstakes, lotteries: 861

Telecom equipment and mobile services: 844

Business opportunities, work-at-home, employment agencies: 712

Source: FTC Consumer Sentinel Network, www.ftc.gov/sentinel/reports/sentinel-annual-reports/sentinel-cy2008.pdf

China 'worried' about U.S. Treasury holdings

By Joe McDonald
Associated Press

BEIJING - China's premier didn't say it in so many words, but the impled warning to Washington was blunt: Don't devalue the dollar through reckless spending.

Premier Wen Jiabao's message is unlikely to be misunderstood at the White House, which is counting on Beijing to help pay for its stimulus package by buying U.S. bonds. China already is Washington's biggest foreign creditor, with an estimated $1 trillion in U.S. government debt. A weaker dollar would erode the value of those assets.

"Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried," Wen said at a news conference Friday after the closing of China's annual legislative session. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets."

The appeal suggested the outlines of Chinese President Hu Jintao's stance when he meets with President Barack Obama at an April 2 summit in London of the Group of 20 major economies on possible remedies for the global crisis.

Wen gave no indication whether Beijing wants changes in U.S. policy. But economists said his comments reflect fears that hihger U.S. budget deficits from Washington's $787 billion stimulus package could drive down the dollar and the value of China's Treasury notes.

In Washington, White House press secretary Robert Gibbs responded to Wen's concerns by saying the Chinese should rest assured because investments in the U.S. are the safest in the world.

Gibbs also said Congress can help by passing Obama's budget for next year, which promises to halve the deficit by the end of his term.

Analysts estimate China keeps nearly half of its $2 trillion in foreign currency reserves in U.S. Treasuries and notes issued by other government-affiliated agencies.

"Inside China there has been a lot of debate about whether they should continue to buy Treasuries," said Frank Gong, chief China economist for JP Morgan.

Beijing is trying to increase its leverage at the London G-20 meeting by remeinding its partners of its role in financing U.S. spending, Gong said.

Finance officials from the G-20 meet this weekend. U.S. Treasury Secretary Timothy Geithner is pressing for a new coordinated global stimulus. Japan is supportive but European governments are reluctant to make expensive commitments before they see how current plans are working.

A Short History of the National Debt

Deficits are nothing new. It's the trend that should worry us.

by John Steele Gordon

When President Barack Obama signed the American Recovery and Reinvestment Act of 2009 into law yesterday, he was adding to what is already almost guaranteed to be the largest deficit in American history. In January, the Congressional Budget Office projected that the deficit this year would be $1.2 trillion before the stimulus package. That's more than twice the deficit in fiscal 2008, more than the entire GDP of all but a handful of countries, and more, in nominal dollars, than the entire United States national debt in 1982.

But while the sum is huge, it is not in and of itself threatening to the solvency of the Republic. At 8.3% of GDP, this year's deficit is by far the largest since World War II. But the total debt is, as of now, still under 75% of GDP. It was almost 130% following World War II. (Japan's national debt right now is not far from 180% of that nation's GDP.)

Still, it's the trend that is worrisome, to put it mildly. There have always been two reasons for adding to the national debt. One is to fight wars. The second is to counteract recessions. But while the national debt in 1982 was 35% of GDP, after a quarter century of nearly uninterrupted economic growth and the end of the Cold War the debt-to-GDP ratio has more than doubled.
It is hard to escape the idea that this happened only because Democrats and Republicans alike never said no to any significant interest group. Despite a genuine economic emergency, the stimulus bill is more about dispensing goodies to Democratic interest groups than stimulating the economy. Even Sen. Charles Schumer (D., N.Y.) -- no deficit hawk when his party is in the majority -- called it "porky."

It was not ever thus. Before the Great Depression, balancing the budget and paying down the debt were considered second only to the defense of the country as an obligation of the federal government. Before 1930, the government ran surpluses in two years out of three. In 1865, the vast debt run up in the Civil War amounted to about 30% of GDP; by 1916 it was less than a tenth of that.

There even was a time when the U.S. made it a deliberate policy to pay off the national debt entirely -- and succeeded in doing so. It remains to this day the only time in history a major country has been debt free. Ironically, the president who achieved this was the founder of the modern Democratic Party, Andrew Jackson.

Jackson was a Jeffersonian through and through. The smaller the federal government, the more he liked it. And, like Jefferson, he hated banks, speculation and the "money interest." Unlike Jefferson, however, he was born poor and made his own fortune. An early personal encounter with debt had taught him to fear it. When the notes of someone who had bought land from him proved worthless, he became liable for the debts he had secured with those notes, and it took him years to pay them off.

When he ran for president the first time, in 1824, Jackson called the debt a "national curse." He vowed to "pay the national debt, to prevent a monied aristocracy from growing up around our administration that must bend to its views, and ultimately destroy the liberty of our country."

"How gratifying," he wrote in 1829 as he began his presidency, "the effect of presenting to the world the sublime spectacle of a Republic of more than 12 million happy people, in the 54th year of her existence . . . free from debt and with all . . . [her] immense resources unfettered!"

When Jackson entered the White House, the national debt, which had reached $125 million at the end of the War of 1812, had already been reduced to $48 million. To get it to zero he was perfectly willing to forego what were then called "internal improvements" and are now known as infrastructure projects. One Kentucky congressman, after a trip to the White House to beg Jackson to sign one such bill, reported to his allies that "nothing less than a voice from Heaven would prevent the old man from vetoing the Bill, and [I doubt] whether that would!"

At the end of 1834, Jackson reported in the State of the Union message that the country would be debt free as of Jan. 1, 1835, with a Treasury balance of $440,000. Government revenues that year would be twice expenses.

It didn't last long, to be sure. The great prosperity of the early 1830s broke in the summer of 1836 when a bubble in land speculation, fueled by easy credit, abruptly ended. The bubble burst, ironically enough, thanks to Andrew Jackson's issuance of the "specie circular," which required that all land bought from the government, except that actually settled on, be paid for in gold or silver.

By the next spring, just as Jackson left the White House, the longest contraction in American history -- six years -- had begun. As one Wall Streeter put it, "The fortunes we have heard so much about in the days of speculation, have melted like the snows before an April sun." Federal revenues fell by half that year and the national debt was back, this time for good.

While today there is no hope of balancing the budget -- or wisdom in trying to -- until the economy substantially improves, we could make a sort of down payment on reforming Washington's porky ways by simply starting to tell the truth.

It has been widely noted that 2009 will have the first "trillion-dollar deficit" in American history. Actually it's the second. In fiscal 2008, the national debt increased from $9 trillion to slightly over $10 trillion. Yet the budget deficit in the last fiscal year was officially reported as being $455 billion. How could the national debt have increased by considerably more than twice the "deficit"? Simple. Just call the money borrowed from the Social Security trust fund an "intragovernmental transfer" and exclude it from the calculation of the deficit.
Corporate managers have gone to jail for less book cooking than that.

Mr. Gordon is the author of "Hamilton's Blessing: The Extraordinary Life and Times of Our National Debt" (Walker, 1997).

Newest National Debt Statistics posted March 2009

From www.treasurydirect.gov as of March 9, 2009.

Debt held by the public:
$6,662,204,653,404.08

Intragovernmental holdings:
$4,290,458,377,199.33

Total:
$10,952,663,030,603.41

Interest payments
February 2009:
$10,311,076,391.59

Fiscal Year 2009:
$148,761,285,212.28

Gifts to reduce the public debt
January 2009:
$1,688,747.34

Fiscal Year 2009:
$2,201,574.06

INCREASE IN NATIONAL DEBT DURING FISCAL YEAR 2009:
$927,938,133,690.92

INCREASE IN NATIONAL DEBT SINCE 'HOPE and CHANGE' of OBAMA ADMINISTRATION BEGAN:
$323,781,545,093.18
($6,745,448,856.11 per day since January 20, 2009)

Ron Paul says to stop the spending

The following appeared on page 3A of the St. Paul Pioneer Press on Monday March 9, 2009.

Remember Congressman Ron Paul, the long-term libertarian-like representative from Texas who sought the Republican presidential nomination last year and come within something like 1,000 delegates of upsetting John McCain?

Paul warned all during his campaign about a looming economic disaster if government just kept growing and growing and printing more money like Republicans and Democrats wanted.

Paul was on Bloomberg TV recently, and he patiently explained that we got into this national financial whirlpool by spending too much government money, and so the solution was probably not to spend even more money.

"We should be cutting spending. We should be trying to live within our means and not just try to spend our way out of a recession that was brought upon us by too much spending and too much borrowing and too much printing-press money," he said.

Paul also said the reason housing prices are falling is that there's too much housing on the market. So, Paul reasons, instead of spending hundreds of billions of deficit dollars to build more houses, making hte supply even larger, politicians should risk unpopularity, cut spending and taxes and let the market settle out.
- New York Times and Los Angeles Times contributed to this report

Forbes: The U.S. Financial System Is Effectively Insolvent

Nouriel Roubini
Forbes

For those who argue that the rate of growth of economic activity is turning positive--that economies are contracting but at a slower rate than in the fourth quarter of 2008--the latest data don't confirm this relative optimism. In 2008's fourth quarter, gross domestic product fell by about 6% in the U.S., 6% in the euro zone, 8% in Germany, 12% in Japan, 16% in Singapore and 20% in South Korea. So things are even more awful in Europe and Asia than in the U.S.

There is, in fact, a rising risk of a global L-shaped depression that would be even worse than the current, painful U-shaped global recession. Here's why:

First, note that most indicators suggest that the second derivative of economic activity is still sharply negative in Europe and Japan and close to negative in the U.S. and China. Some signals that the second derivative was turning positive for the U.S. and China turned out to be fake starts. For the U.S., the Empire State and Philly Fed indexes of manufacturing are still in free fall; initial claims for unemployment benefits are up to scary levels, suggesting accelerating job losses; and January's sales increase is a fluke--more of a rebound from a very depressed December, after aggressive post-holiday sales, than a sustainable recovery.

For China, the growth of credit is only driven by firms borrowing cheap to invest in higher-returning deposits, not to invest, and steel prices in China have resumed their sharp fall. The more scary data are those for trade flows in Asia, with exports falling by about 40% to 50% in Japan, Taiwan and Korea.

Even correcting for the effect of the Chinese New Year, exports and imports are sharply down in China, with imports falling (-40%) more than exports. This is a scary signal, as Chinese imports are mostly raw materials and intermediate inputs. So while Chinese exports have fallen so far less than in the rest of Asia, they may fall much more sharply in the months ahead, as signaled by the free fall in imports.

With economic activity contracting in 2009's first quarter at the same rate as in 2008's fourth quarter, a nasty U-shaped recession could turn into a more severe L-shaped near-depression (or stag-deflation). The scale and speed of synchronized global economic contraction is really unprecedented (at least since the Great Depression), with a free fall of GDP, income, consumption, industrial production, employment, exports, imports, residential investment and, more ominously, capital expenditures around the world. And now many emerging-market economies are on the verge of a fully fledged financial crisis, starting with emerging Europe.

Fiscal and monetary stimulus is becoming more aggressive in the U.S. and China, and less so in the euro zone and Japan, where policymakers are frozen and behind the curve. But such stimulus is unlikely to lead to a sustained economic recovery. Monetary easing--even unorthodox--is like pushing on a string when (1) the problems of the economy are of insolvency/credit rather than just illiquidity; (2) there is a global glut of capacity (housing, autos and consumer durables and massive excess capacity, because of years of overinvestment by China, Asia and other emerging markets), while strapped firms and households don't react to lower interest rates, as it takes years to work out this glut; (3) deflation keeps real policy rates high and rising while nominal policy rates are close to zero; and (4) high yield spreads are still 2,000 basis points relative to safe Treasuries in spite of zero policy rates.

A line against spending abuse

The following appeared in a recent edition of the Wisconsin State Journal.

The 8,750 add-ons that bloated Congress' recent federal spending bill by $7.7 billion revealed a glaring weakness in how Washington, D.C., works.

Or, more correctly, doesn't work.

The weakness is the lack of a line-item veto to allow presidents to save taxpayers from the costly pork that members of Congress slip into spending bills as favors to narrow interests.

Wisconsin's Democratic Sen. Russ Feingold and Republican Rep. Paul Ryan, along with Republican Sen. John McCain, are promoting a bill that would gratn the president modified line-item veto powers.

Congress should adopt it.

At stake is the president's ability to serve as a check on legislative abuses by Congress.

A line-item veto gives an executive the power to strike specific provisions from a bill before it becomes law.

Forty-three governors, including Wisconsin's, have line-item veto powers. President Bill Clinton briefly wielded a presidential line-item veto, but the Supreme Court ruled that particular veto unconstitutional.

The new proposal from Feingold, Ryan and McCain is modified to meet the Supreme Court's objections. The plan requires the president to submit his line-item vetoes to Congress within 30 days of signing a bill.

Congress would then accept or reject the vetoes, as one package, by majority vote within 12 days.

The limited veto bears no resemblance to the Frankenstein veto powers that formerly allowed Wisconsin governors to rewrite legislative intent. Wisconsin voters banned the Frankenstein veto last year after a campaign by the State Journal editiorial board.

The new federal proposal is aimed at reining in pork-barrel spending, the practice of allowing lawmakers to gain favor, or return favors, back home.

The name for the process the results in pork-barrel spending is earmarking. An earmark allows a member of Congress to reserve money for a project, even though no federal agency has requested funding for the project.

Not all earmarks are pork. But earmarks often pose the risk of waste and even corruption because they are attached to large spending bills, where they slip through without separate debate.

Furthermore, earmarks have far outgrown their place, as demonstrated by the 8,750 earmarks in the recent $410 billion federal agency spending bill.

Through a line-item veto, a president would have the power to rescind wasteful earmarks and force Congress to publicly vote on them as a separate package.

In the name of fiscal responsibility, Congress should approve a limited line-item veto for the president.

Repo lots overflow with reclaimed cars

By Chris Woodyard, USA TODAY

Car and truck repossessions this year are headed for the highest level in at least a decade, thanks to easy credit and a faltering economy, says an economist for one of the largest wholesale auto auction services.

So many vehicles are being snatched from owners who stop making payments that some repo operators and auto auctioneers say lots are overflowing.

This year's predicted 10% rise in vehicle repos to 1.6 million would be a third higher than 10 years ago, says Thomas Webb, chief economist for a unit of Atlanta-based Manheim, which sells cars to dealers worldwide. The increase comes atop a 10% rise in repos last year.

Webb blames overly "generous" auto loans in the past couple of years as a key factor in driving up defaults that lead to repossessions.

He says the rate might be even higher if employment hadn't remained strong despite the slowing economy.

An executive at another big auto auctioneer says that easy subprime car loans in recent years are a big reason for the flood of repossessed cars.

"We're experiencing significant growth in repo volume to the point where we're using additional lots to store them," says Tom Kontos, executive vice president of Indiana-based Adesa Auctions. "Our inventories are growing to record levels," caused by repos on top of a glut of cars coming off leases and out of rental service.

While the nation has been transfixed by rising home foreclosures, scant attention has been paid to what is usually a consumer's second-largest purchase: their car or truck.

Wells Fargo, (WFC) for example, reported last month that it charged off $1 billion in auto loans last year, 3.5% of its portfolio, compared with $857 million in 2006. The bank says it expects a higher write-off rate this year.

The rise of bad loans, however, has meant busy times for "repo men," whose work can involve seizing cars from driveways in the dead of the night.

"Our business has skyrocketed," says Patrick Altes, president of Falcon International in Daytona Beach, Fla. In recent times, his service saw a first wave of defaults that involved picking up boats and recreational vehicles.

Now, it's cars and trucks, often in affluent neighborhoods.

"A lot of the vehicles we're getting are high-dollar pickups" whose owners got caught in the construction downturn, Altes says.

The repo surge has boosted business for locksmith Amy Palmer. She makes new keys for seized vehicles at Manheim's auction lot in Ocoee, Fla., one of Manheim's 144 locations in 14 countries.

"It's phenomenal," she says. "If you're not paying for your house, who is paying for the car?"

Violence between repo men, car owners on the rise

HALSELL, Ala. (AP) - With the economy in shambles, auto reposessions are expected to rise, and violence along with them.

The shooting death of Alabama resident Jimmy Tanks by a repo man in the wee hours of June 26 points to part of the problem. The local sheriff says Tanks did what anyone would have done at 2:30 a.m.—he went outside, armed, to check on the noise.

The repo man, Kenneth Alvin Smith, who faces murder charges, says Tanks fired first.Part of the problem is a largely unregulated industry nationally.

Since Tanks’ death, two other repo men from the same company Smith worked for were shot, one fatally.

Joe Taylor, whose Florida-based company insures repossession companies, said licensing and training is the answer.

All three Alabama shootings were in the middle of the night. An industry leader says that’s a problem, and that smart operators don’t work those hours.

Stimflation: Tidal Wave of Debt to Hit America

by Ernest Istook
Human Events

Trickle-down economics are out. The tidal wave is in -- a tidal wave of new spending. And new borrowing.

In his Tuesday night address to Congress and the nation, President Barack Obama blithely ignored the elephant in the room. While outlining his policy dreams, he glossed over the impact of the massive borrowing required to finance them.

The likely consequences of this borrowing include: inflation (and possibly, hyperinflation); the choking off of private sector borrowing (because government soaks up so much available credit); and excessive dependence on foreign money. Nations that lend money to a cash-strapped Uncle Sam will want to dictate terms including not just higher interest rates, but also changes to our foreign policy.

This is “stimflation.” Stimflation is massive inflation created when government spends too much, under the pretext of stimulating the economy.

Not even enormous tax hikes can cover the new spending Obama outlined, much less cover the deficit that he inherited and promptly doubled. Being an excellent salesman, the president never mentioned the price of what he was selling. Those details will trickle out in the next few weeks.

When spending exceeds tax revenues, government must borrow or crank up the printing presses. Or both. Last weekend, Secretary of State Hillary Clinton urged the Chinese to continue lending money to the U.S. government -- a message she’ll likely deliver to other nations also. While China holds $696 billion in Treasury bills, the total amount America owes to all foreign nations now exceeds $3 trillion. Our dependence on foreign oil is nothing compared to our dependence on foreign money.

Like any overextended debtor, we may find it harder and harder to convince other nations to keep lending to us -- especially as they watch our spending and the national debt soar to new heights. International credit is drying up as other nations spend on their own needs -- just at the moment that America must increase its borrowing to pay for the stimulus and the latest round of government bailouts. Interest rates paid for Treasury borrowing have begun to increase as our new borrowing climbs faster than ever before. The stimulus bill authorized Treasury to borrow $12.1 trillion -- a trillion more than the old debt limit. Foreign investors are growing wary of our ability to keep making payments, which last year included $454 billion in interest alone.

As Michael Goodwin wrote in the New York Daily News, “Hillary Clinton must have swallowed hard before setting foot in Beijing this week. More accurately, it was her knee that touched the ground, for Clinton practically begged China to let us get even deeper into hock.”

The Heritage Foundation’s J.D. Foster says, “The China ATM has dispensed over a trillion dollars to the United States in this decade. But now Beijing faces serious troubles at home. How long will it be willing to keep shipping hundreds of billions of dollars a year to an increasingly suspect customer?”

Because most of our debt is short-term, it must be re-borrowed constantly. Our Treasury issued or renewed over $10 trillion in debt during fiscal 2008. This roll-over debt is an ever-hungry beast that must be fed constantly, making us susceptible to sudden swings in what lenders require, including what interest they charge. Lenders must be constantly reassured and persuaded that the U.S. government is the best place to invest. As our Treasury borrows more, especially when it must offer higher interest rates, it dries up the pool of credit available for homes and businesses. Alex Adrianson of the Heritage Foundation writes:

“A tidal wave of deficit spending by the U.S. government is already increasing the costs of borrowing, retarding economic recovery, and confirming again a key contention made repeatedly by critics of Keynesian-style stimulus plans: That government spending, on net, does not add to the economy. The more government borrows to finance its spending, the less capital is available to be invested in the private economy.”

President Obama took note of the private sector credit crunch on Tuesday night. “Credit has stopped flowing the way it should…,” he said. “With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other. When there is no lending, families can’t afford to buy homes or cars. So businesses are forced to make layoffs. Our economy suffers even more, and credit dries up even further.”

What’s missing from Obama’s analysis? Any recognition that excessive government spending has been a prime cause of this credit crunch.

Which brings us to Option B: “With borrowing so problematic, why not just shift the Treasury’s printing presses into overdrive?”

The Wall Street Journal’s George Melloan predicts that, once borrowing becomes too expensive,
“The Obama administration and Congress will call on Ben Bernanke at the Fed to demand that he create more dollars -- lots and lots of them. . . . And what will be the result? Well, the product of this sort of thing is called inflation. . . . We learned that in the late 1970s, when the Fed's deficit financing sent the CPI up to an annual rate of almost 15%. That confounded the Keynesian theorists who believed then, as now, that federal spending "stimulus" would restore economic health….

As the global economy slows and Congress relies more on the Fed to finance a huge deficit, there is a very real danger of a return of stagflation. I wonder why no one in Congress or the Obama administration has thought of that as a potential consequence of their stimulus package.”

Imagine the negative impact on jobs if interest rates climb to the high double-digits of the 1970s.

Melloan and others are describing the impact of spending decisions already made. The bailouts. The stimulus. Yet to come are the bloated $410 billion “omnibus” bill, introduced this week.

The far greater costs of a cap-and-trade tax on most energy. The higher taxes. And the rest of the left wing agenda speeding through Congress and the White House. They will add to the tidal wave of borrowing that is about to inundate us and drown many.

Some will see a silver lining because inflation will push back up the nominal value of houses and stocks. But the buying power diminishes, and mortgages with adjustable rates will re-set to reflect higher interest.

Maybe it’s time that amusement parks should get federal funds, too, because we’re in for a government-sponsored roller coaster ride.

Ernest Istook calls himself a "recovering Congressman" from Oklahoma. He is now a Distinguished Fellow at The Heritage Foundation and chairs the National Advisory Board for Save Our Secret Ballot, www.SOSballot.org

Update from Dave Ramsey on the Economy

I’m tired of hearing all the gloom and doom coming from the media about the economy and unemployment—I bet you are, too! Let’s take a minute to look at the true reality of the situation and what we can do about it.

Yes, many people have lost their jobs and houses. You may be one of them. But guess what? People have lost their jobs and houses even in a bull market. About 93% of people are still employed. That is pretty good! I was alive in the 1970s when unemployment hit double digits, and we’re nowhere near that right now! I’m not making light of the fact that some people are struggling; I’m just putting the situation in the proper perspective.

Even though you may be currently unemployed, that doesn’t mean you have to participate in the recession. People like me who have chosen to not participate acknowledge the reality of a slow economy and suffering people. However, we have decided that we’re not going to form our lives around the negativity coming out of the media and government. We’re intensifying our efforts and going to have the best year of our lives in spite of things slowing down.

Some people who find themselves unemployed will go into new careers or start their own businesses where they have the best year of their lives—professionally, financially and emotionally. Their current job losses are actually blessings in disguise. They believe this and are formulating game plans based on it. I guarantee there are men in their garages right now starting their own mechanic shops. The next Mary Kay Ash is writing up a business plan for new products she’s just created. College students are developing “the next best thing” in their dorm rooms as you are reading this. This is reality!

So think about your skills and interests. How can you leverage those passions into something you enjoy doing every day while earning money for it? If you haven’t lost your job but dread going to work, maybe it’s time to fire your employer and go in a new direction. When you have a game plan for your money and career, you will have a sense of empowerment because you aren’t a slave to the lender (or employer).

When employers start hiring because they believe their businesses will grow, recessions end. Many who have stopped hiring a healthy amount have been paralyzed by fear. They’ve lost hope. People who continue going about their lives in normal ways (without being irresponsible and buying stuff they can't afford) believe in the future. It’s called hope.

You can have fear or hope. It's your choice.

I choose hope.

Seven action steps if you’ve lost your job (or think you might)

My Email to Dave Ramsey concerning VistaPrint

Since Dave Ramsey receives hundreds of emails a day from listeners, I thought I would post my email to daveonair in case he doesn't use it in his radio show.

"Dave:

I just found myself as a victim of the VistaPrint scam and I want to make your listeners aware of.

A friend of mine gave me his business card and let me know that they had a promotional offer for 250 free business cards - you just pay the shipping. Since I am starting up an internet business, I thought it would be something to check into so I went to their site and, sure enough, a promotional offer for 250 free business cars - you just pay the shipping.

I read over the fine print to make sure that I wasn't signing up for any monthly services that I don't need and to make sure there was not a "catch," as I wanted to make sure this was an above-board operation.

Seeing no subscriptions or anything out of the ordinary, I placed the order. A week later I received my 250 business cards and let me tell you - they looked sharp. The $5.45 was deduted from my account and I got what I paid for.

While looking at my bank statement today, I noticed the following: 64059 DDA PURCH AP9*VISTAPRINTRWRD 888-243-6185 CT US 905527000093 with a deduction in the amount of $14.95.

I called the number and cancelled, but then did an internet search to see that others have the same problem.

VistaPrint might be a reputable company for their printing, but the fact that they allowed 3rd parties to harvest bank accounts and have numerous class action lawsuits (including one that I am probably going to join) tells me now to STAY AWAY.

Here is the response that I emailed them: "My account was debited the $5.45 for the order I placed in January. On 25 Feb 2009, I received a $14.95 charge for Vista Reweards which I did not authorize. Please credit my account the $14.95 or I will lodge formal complaints with the Federal Trade Commission, Better Business Bureau and my Attorney General. Furthermore, if there is one more deduction from my account I will contact my attorney."

I will probably not see the $14.95 back and will contact the bank tomorrow to make sure they don't authorize any more debits.

Dave, I just paid a stupid tax for not checking them out further. While the amount is miniscule, VistaPrint is not acting on principle and I encourage your listeners to stay away."

This day in history - the Legal Tender Act

It was 147 years ago today...

The U.S. Congress passes the Legal Tender Act, authorizing the use of paper notes to pay the government's bills. This ended the long-standing policy of using only gold or silver in transactions, and it allowed the government to finance the enormously costly war long after its gold and silver reserves were depleted. The Legal Tender Act allowed the government to print $150 million in paper money that was not backed by a similar amount of gold and silver.

Many bankers and financial experts predicted doom for the economy, as they believed that there would be little confidence in the scheme. There were also misgivings in Congress, as many legislators worried about a complete collapse of the nation's financial infrastructure. These notes, called "greenbacks," worked much better than expected. It allowed the government to pay its bills and, by increasing the money in circulation, greased the wheels of northern commerce. The greenbacks were legal tender, which meant that creditors had to accept them at face value.

The same year, Congress passed an income tax and steep excise taxes, both of which cooled the inflationary pressures created by the greenbacks. Another legal tender act passed in 1863, and by war's end nearly a half-billion dollars in greenbacks had been issued. The Legal Tender Act laid the foundation for the creation of a permanent currency in the decades after the Civil War.

GOP Gov. Jindal calls Obama's plan irresponsible

By CHARLES BABINGTON
Associated Press Writer

WASHINGTON – Republican leaders continued their attacks on President Barack Obama's handling of the economy Tuesday, calling it irresponsible and certain to increase taxes and federal debt.

Responding in advance to Obama's televised speech to a joint session of Congress, top Republicans said the president relies too heavily on spending, and not enough on tax cuts, to try to revive the gasping economy. They said they want to work with Obama, and sometimes blamed congressional Democrats more than him. But their criticisms were sharp and plentiful.

"The way to lead is not to raise taxes and put more money and power in hands of Washington politicians," Louisiana Gov. Bobby Jindal, who gave the Republican Party's official response, said in excerpts released early. The massive economic stimulus bill recently enacted by Obama and congressional Democrats, Jindal said, will expand the government, "increase our taxes down the line, and saddle future generations with debt."

"It's irresponsible," said Jindal, who is eyeing a presidential bid in 2012.

The tone of the Republicans' response was in keeping with their nearly unanimous opposition to the $787 billion economic stimulus bill, which was backed by only three Republicans in the Senate and none in the House. Some Democrats and independents think the Republicans are blundering and misreading most Americans' sentiments about the need for massive government action to help the economy.

In the latest New York Times/CBS News poll, about three-fourths said Obama was trying to be bipartisan, and almost as many faulted the response of Republican officials, which was seen as politically motivated.

Despite such findings, GOP lawmakers say they believe they will be proven right in the long run.
House Republican leader John Boehner of Ohio said Tuesday that Republicans want to help Obama find "responsible solutions to the challenges facing our nation, but thus far congressional leaders in the president's own party have stood in the way."

Boehner, Jindal and other Republicans repeatedly accused Democrats of wanting to raise taxes, but the Obama-backed stimulus package has extensive tax cuts.

Jindal acknowledged that to some degree, Republicans deserved the drubbing they took in the last two national elections.

"Our party got away from its principles," he said. "You elected Republicans to champion limited government, fiscal discipline, and personal responsibility. Instead, Republicans went along with earmarks and big government spending in Washington." But that is changing, he said.

Taking advantage of his moment in the national spotlight, Jindal publicized a Web link Tuesday (http://www.bobbyjindal.com/sotu/) allowing respondents to receive early excerpts of his planned televised response, and to donate to his political organization. Jindal also collected their e-mail and postal addresses, which could prove handy in a presidential race.

After String of Quick Loans, Obama Plans to Shrink National Debt

The following was posted by Belinda Jackson at the personalmoneystore.com. I notice a lot of inaccuracies in it, which I will highlight below each section in red.

President says he’ll cut deficit by two-thirds
After he handed out billions of dollars in quick loans to banks, auto retailers and the nation as a whole, President Barack Obama’s next goal may surprise you. He plans to cut the annual deficit by two-thirds in the next four years.

It is going to be hard to cut the annual deficit by 2/3 in the next four years when you added tons of money to the debt and compound interest kicks in, which shrinks the available funds in the budget each year, as the interest on the National Debt is a mandatory expenditure. Unless severe spending cuts kick in, which I don't believe will happen with this administration, Obama will never be able to achieve that target.

Big plans
At the beginning of Obama’s presidency, the national debt was $1.2 trillion. That amount will rise to $1.5 trillion after initial spending from the quick loans and other programs in the economic stimulus package. However, Obama’s economic projections say that by the end of 2013, the deficit will be down to $533 billion.

At the beginning of Obama's presidency, the national debt was $10,628,881,485,510.23 according to the U.S. Treasury Department's Bureau of the Public Debt (www.treasurydirect.gov). This is a far cry from $1.2 trillion. We haven't had a $1.2 trillion debt since the 1980s. It is unclear as to how much the debt will rise due to compound interest, recurring deficits in the ensuing years, loss of GDP due to the recession and loss of tax revenue due to high levels of unemployment and shrinkage in business output.

How to slash a deficit
The major components of Obama’s plan are Iraq troop withdrawal and higher taxes on the wealthy. Obama says he’ll release his budget outline Thursday. This outline will also make clear how he intends to deliver campaign promises on health care and energy policy, according to the New York Times.

Funding the Iraq war has accounted for a huge percentage of the nation’s spending, and Obama says his troop withdrawal plan will save about $90 billion.

Increasing taxes on the wealthy will not result in a net gain of revenue for the government. Government revenue will actually DECREASE as the "wealthy" create and use tax shelters, park their money in tax free investments (municipal bonds instead of U.S. Treasuries) or just keep it in the bank.

The Iraq War money is a lot less than the interest on the National Debt. Since the beginning of FY 2009, the taxpayers were on the hook for $138,450,208,820.69, which is much larger than the $90 billion savings in his troop withdrawal plan. In FY 2008, taxpayers paid $451,154,049,950.63 in interest on the debt, which will only go up with the Bush-Paulson bank bailout, and Obama's Automotive Bailout and Stimulus packages.

A few new taxes
Obama proposes taxing income from investments in hedge funds and private equity partners at ordinary income tax rates. Right now those types of income are taxed like capital gains, at the rate of 15 percent. His policy would consider those funds income, and thus they could be taxed up to 35 percent, which is what the most wealthy pay in income tax.

See section above regarding taxation on the wealthy.

Fewer tax cuts
During Obama’s campaign, he said he would immediately get rid of the Bush tax cuts on income, dividends and capital gains. However, because of the economy crisis, he plans to instead let them lapse, as scheduled, after 2010 for individuals who make more than $250,000 a year.

Tax cuts stimulate economic growth. Allowing the tax cuts to expire will only make the recession worse due to a further slow-down in growth. That, along with the increased borrowing and spending could help push the current recession into a depression.

Spending cuts
Obama’s proposal will also include spending cuts. One program he proposes spending less money on is Medicare Advantage, which subsidizes insurance companies that cover seniors who could acquire health coverage directly from the government.

He plans to scale back spending on on private contractors. This type of spending went up considerably during the Bush administration. Many of the cuts Obama proposes include cutting spending on private contractors used for defense purposes.

The spending cuts are a starting point but definitely don't go far enough. The pork barrel spending in the stimulus plan would have been a better starting point. Eliminating waste, fraud and abuse from ALL government agencies would go even further. I'll take the spending cuts as long as they are true cuts - not the political definition of a cut being a reduction in the increase in growth of a government program. If indeed, they are true cuts, I'll support them.

Campaign promises
During his campaign Obama said he would double the United States’ spending on foreign aid. However, given the stimulus package and the economic hardship the nation faces, Obama concedes he will have to scale back that promise.

The economy has been in a recession since shortly after he started campaigning. Why make these promises in the first place? I think foreign aid should be slashed until we get government spending under control.

Healthy promises
However, Obama will not scale back his promise to make sure the 46 million Americans who don’t have health insurance will be covered. He says he can achieve this promise without adding to the deficit thanks to cost-saving changes to health care and by raising revenues.

There are better ways that have been pointed out in the public debate, largely by the minority party. All President Obama has to do is embrace them and implement them. Government take over of health care will not solve the problem, it will make it worse. This will add billions more to the National Debt, which will not help his goal of cutting the deficit in half in four years.

Energetic promises
Obama says his energy policy will create new revenue by 2012. He plans to charge companies for permits for greenhouse gas emissions, which would be the main revenue generator. Obama assumes that companies will pass the cost of the permits on to customers, so he says the government will use most of the revenue to offset higher utility bills and related expenses. The remaining revenues would go toward developing alternative energy.

If Obama assume that companies will pass the cost of the permits on to customers, and he will use the government revenue to offset the higher utility bills, then it seems to me it is a waste of time and money. It sure doesn't solve any problems and creates more for both energy producers and consumers. He should leave well enough alone.

Closing arguments
Obama says is strategy is ”investing in what we need, cutting what we don’t, and restoring fiscal discipline.”

“We can’t generate sustained growth without getting our deficits under control,” he added.

After all the quick loans being handed out, it’s nice to see some debt management kicking in.

He's right - we cannot generate sustained growth without getting our deficits under control. That may be his rhetoric right now but his policies, starting with the $35 billion bailout package for the Big 3 automakers, $787 billion in the stimulus bill, further tax increases on the wealthy, increasing the tax on energy companies, and I'm sure he'll think of adding more to the already high 31% corporate income tax, it not getting deficits under control. Add in compound interest and we are going to have even a larger gap. Then what?

In conclusion, we only have to look at Iceland's Bankruptcy, the huge debt Spain incurred with the Spanish Armada, England's near economic collapse, the Weimar Republic in Germany after World War I and Japan's "missing decade" among others to see that these policies will not solve anything but make matters worse. It truly is time for some fiscal sanity.

Obama pledges to slash deficit — after increase

(So just how EXACTLY does this rationale work? You increase borrowing to slash the deficit? I think Congressional Republicans need to hold him at his word if he wants to half the deficit in four years - except they need to go a step further by using CBO pre-inauguration projections which King Banian of SCSU Scholars denotes would have been only 147 billion instead of 555 billion.)

By LIZ SIDOTI
Associated Press

WASHINGTON – Urging strict future restraint even as current spending soars, President Barack Obama pledged on Monday to dramatically slash the skyrocketing annual budget deficit as he started to dole out the record $787 billion economic stimulus package he signed last week.

"If we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road," the president warned, promising to cut the yearly deficit in half by the end of his four-year term. "We cannot simply spend as we please and defer the consequences."

He said he would reinstitute a pay-as-you-go rule that calls for spending reductions to match increases and would shun what he said were the past few years' "casual dishonesty of hiding irresponsible spending with clever accounting tricks." He called the long-term solvency of Social Security "the single most pressing fiscal challenge we face by far" and said reforming health care, including burgeoning entitlement programs, was a huge priority.

Wall Street seemed unimpressed by all the talk. The Dow Jones industrials dropped 251 points for the day.

Obama goes before Congress and the nation Tuesday night to make the case for his agenda and his budget plans, which the White House is to release in more detail on Thursday.

On Monday, he sought to prepare people for tough choices ahead.

He summoned allies, adversaries and outside experts to what the White House characterized as a summit on the nation's future financial health one week after triumphantly putting his signature on the gargantuan spending-and-tax-cut measure designed to stop the country's economic free fall and, ultimately, reverse the recession now months into its second year.

At the same time, federal regulators announced a revamped program to shore up the nation's banks that could give the government increasing ownership. It was the administration's latest attempt to bolster the severely weakened banking system without nationalizing any institutions, which the White House has said it does not intend to do.

Obama said there would be another summit next week on health care reform. "It's not that I've got summititis here," he added wryly.

By the president's account, the administration inherited a $1.3 trillion deficit for the current fiscal year from the Bush administration — that's the figure Obama says he'll cut in half — and the stimulus law, coupled with rescue efforts for ailing automakers, the financial industry and beleaguered homeowners will raise this year's red ink to $1.5 trillion.

The administration hopes to trim the deficit by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government.

"We are paying the price for these deficits right now," Obama said, estimating the country spends $250 billion — one in every ten dollars of taxpayer money — in interest on the national debt. "I refuse to leave our children with a debt that they cannot repay."

As an example of a purchasing process "gone amok," the president said he had ordered a thorough review of his new fleet of Marine One helicopters, now far over budget. He was asked about the fleet by former presidential rival John McCain at the end of the White House meeting.

"The helicopter I have now seems perfectly adequate to me," Obama said, to laughter. "Of course, I've never had a helicopter before. So, you know, maybe I've been deprived and I didn't know it."

Earlier, Obama met with Republican and Democratic governors who are poised to benefit from his unprecedented emergency economic package. He told the chief executives, attending a three-day National Governors Association meeting in Washington, that he would begin distributing $15 billion to their states within two days to help them with Medicaid payments to the poor.

The recession has strapped state budgets, in particular in regard to the Medicaid program that is jointly underwritten by states and the federal government. In total, states will eventually receive $90 billion for Medicaid from the new law.

One month into office as the economy continues its downward spiral, Obama is seeking to balance twin priorities: turning around dismal conditions with a huge injection of spending while lowering huge budget deficits. With his re-election race just a few years away, he also has an interest in avoiding being labeled as a big-government, big-spending Democrat.

The White House meetings opened a jam-packed White House week that includes a State-of-the-Union-style address to Congress Tuesday night and the president's first budget proposal on Thursday. A common thread: addressing current economic turmoil while controlling the country's long-term costs.

"This will not be easy," Obama told his White House audience, which included congressional leaders, 2008 GOP presidential nominee McCain, and Republican Sen. Judd Gregg of New Hampshire, who recently backed out as Obama's commerce secretary.

After Obama spoke, attendees broke into five groups to brainstorm how to address costly areas including military weapons, Social Security, health care and tax reform.

During one, Rep. Henry Waxman, D-Calif., said, "Our deficit really cannot be controlled until we figure out how to deal with health care costs." At another, House Republican leader John Boehner of Ohio proposed raising the Social Security retirement age to 70 over a number of years.

Afterward, Obama emphasized areas where he said there was agreement and consensus on moving forward in a bipartisan way, including that the country must ensure people have retirement security, that the tax process must be simplified and that the existing budgeting process isn't working. He also directed his team to pull together a final report from the sessions in 30 days.