We have a saying that I am sure most of you know that starts out, “if you believe that, I have a bridge to sell you.” It is a cliché used to point out the most preposterous assumptions by the most naïve people. It usually gets rolled out when only the slightest amount of thought renders an ideal illogical.
So when the pimply faced ex-pizza delivery guy (because I am sure you checked out the credentials of this perfect stranger that all of the sudden had your best interest in his heart.) who turned into a loan agent told you this did you have him explain how? Did he explain that over the next 30 years, at your 7% rate, on a $100,000 loan you would pay $250,000 plus property tax, insurance, and maintenance costs? This was supposed to be an “investment”? How many times your net (bring home) yearly salary is that? When you finally paid it off, it might be worth $200,000, although historically it would be more like $150,000 and that wouldn’t even take into the rise in cost of living over the past 30 years. So how was this a “responsible decision”? Boy, wait till you get a grasp of how a credit card works.
An investment people should A) never cost more then the purchase price you paid for it. B) Should never be worth less then the price you paid for it. C) Should have the ability to cash out (with maybe some minor penalties) and get your “initial investment” back plus whatever you have earned off of it. And D) If you loose your job, it should be a source of last resort to provide food shelter or clothing for you and your family. You should not be in jeopardy of loosing it because you lost your income. The only thing way a house might be considered an “investment” is if you are planning on leaving the paid off asset to one or all of your kids.
I suppose that you believed him when he said, “borrow to the max now, everybody’s income eventually grows” as well? So you bought shares of a bridge, and now I have to pay for it. Exactly how is the free, fair and just? The biggest problem facing this country is not its economic woes. It is that a large enough portion of our community are not able to make rational responsible decision and are not able to accept blame. I hate GWB and believe he may have doomed this country to a bitter end. But I could never bring myself to believe he was responsible for a hurricane. Now, Cheney? He may have had that kind of influence, being the Anti-Christ and all.
It seems to me that the contents of the current Senate stimulus bill is not at all what I would like to happen economically, and is certainly not what I had in mind when I supported Senator Obama's candidacy.
As I think about what went wrong here, particularly the elimination of pretty much everthing I care about (starting education and research funding) from the Senate compromise, it seems to me that the word "stimulus" is taking the discussion of economics in the US to a very bad place. One basic problem is that a stimulus, in common perception, is something one does in a moment (such as stimulating a nerve). But the problem with this is that an economic activity such as hiring workers or building a factory requires some long term expectation about the future. These activities are investments, and must take place in an environment where there are reasonable expectations about the future.
As I think about it, it seems to me that the much of the banking crisis has the same root. There seems to be much more money floating around than anyone knows what to do with. (Sorry about the poor English.) Banks loan money to others with the expectation that they will be paid back (normally, at least). Loaning money to individuals for things such as houses means that those people will be able to pay back, based on the expectation of continuing income (mostly employment). For business loans, the expectation is that the business will succeed. But if the economic cliimate is such that there is very little hope of such investments paying off, banks will not make loans, and businessmen will not be willing to take loans because they (the vaulted entrepeneurs) will not see any way to effectively use any money the do get in loans.
Investment is for the long term, which provides an environment for successful economic activity. A much better word - and as we have seen in this past week, words really do matter.
Nicholas Duchon.
Unemployment: Regardless of the tax breaks, housing issues and all other ideas in any proposal. If you don’t stop the unemployment and put people back to work so they actually have money to benefit from the tax breaks and housing benefits proposed and so they can start purchasing items, getting loans for homes and vehicles, investing in stock and or otherwise spending money, then regardless of the amount of the package, you will not have stimulated spending or our economy. JOBS are the foundation of stimulation.
JOBS: It is vitally important that the jobs created are created throughout the country with various skills. I assure you that those that have lost their jobs and will lose their jobs are from various locations and with various skills. So specific projects, proposed in any bill, will not suffice since they are limited in both location and skill.
How do you create Jobs?: I continuously hear everyone say, including the President, that our small businesses are the backbone of job creation and our economy. Why is that? It’s because they are all across the country and provide a variety of jobs and they borrow and spend?How do you stimulate small business?: Normally small businesses which are existing or that which wish to start up seek private funding through investement, loans and federal assistance. However due to the current economic EMERGENCY, the private sector options are no longer available. This leaves only Federal funding for small businesses. Our Federal agencies hold many applications from small businesses.: Various agencies have applications from small businesses that want to do work, some of which the government is requesting to be done. Some of which they have come up with on their own, which are called “unsolicited proposals” but which could still be of value. Some of this work is manual labor, some of this work is research and a lot of it is a variety of other opportunities.Some funds could already be available!: Many of these Federal agencies most likely already have some funds set aside for Grant funding or other funding. These agencies could pull all small business applications and Grand Total the amounts needed to fund all of them and the stimulus package could authorize additional funds, which may or may not be needed. The stimulus package and/or a Directive by the President should order these agencies to "clear their coffers". This may seem like an extreme measure, but these are extreme times.Some may argue that this will diminish private investment opportunities.: Contrarily by providing these small businesses with funding to start up or perform work, they can begin to invest and seek investors with the capital which is provided to them and/or with their success as they grow .Perhaps some of the funds being directed to the TARP packages could be redirected here.: Since the issue for our financial institutions is not neccesarily having the money available, but rather a way to move the money, our small businesses can provide for two means of helping with this issue. First they can provide the monies through creating bank accounts and/or making deposits into existing accounts. They will conduct daily business that will begin to rotate these funds and stimulate the economy.The definition of small business has already been defined.: The Government has already defined the term "small business", so there is no need to redefine it or figure out what articulates into a small business.These small businesses have already gone through the Grants.gov verification processes!: Before applying for Grants, SBIR’s and/or STTR’s each business must go through a verification process.There are already established monitoring systems set up.: Government auditing, reports and etc..are already established by each agency.Grants.gov already has bank routing numbers for each business.: As a requirement during the verification process, Grants.gov requires that a bank account already be established. The funds could be dispersed quickly and put to use quickly. Unfortunately the amounts they offer, $100,000 to $150,00 in most case are not sufficient to actually start a business. A business beginning with nothing has to have the funds needed to buy supplies, lease property, purchase equipment etc… and cover salaries for at least a year to allow the business to grow and build a customer base which can sustain them. Another source for small business interest is the Small Business Administration.It is important to provide enough funding: to allow for these businesses to start and to have enough to sustain them for at least a year, two years would be best, so that they can build a customer base to sustain themselves. Not all will succeed and it could be required that unused funds be returned if they fail. But I believe there will be many more that will succeed and some may even provide us all with some unexpected benefits.So have theses agencies, a list of Granting Agencies is on Grants.gov, pull all small business applications and provide funding. Open up more opportunities for small businesses. These small businesses are ready, willing and able to begin work and put others to work, so let them. What is the real benefit of small business?They employ, they buy, they bank, they borrow, they invest, they provide investment opportunities and they spend all across the country.: This stabilizes current businesses and allows them to hire more employees, to buy, to borrow and to spend. They all pay taxes to their states, they pay for permits from municipalities, counties and/or other forms of government, creating State and local revenue. They are perpetual, in that they continue, whereas a stimulus check to Americans may help, it does not provide a continuing of spending and rotation of capital as small businesses would while conducting daily business. They do not require any trade agreement specifications or a “Buy American” provision.Their employees buy, bank, invest, borrow and spend all across the country.: They pay State and local taxes which creates revenue for them.
How do you create Jobs?: I continuously hear everyone say, including the President, that our small businesses are the backbone of job creation and our economy. Why is that? It’s because they are all across the country and provide a variety of jobs and they borrow and spend?
How do you stimulate small business?: Normally small businesses which are existing or that which wish to start up seek private funding through investement, loans and federal assistance. However due to the current economic EMERGENCY, the private sector options are no longer available. This leaves only Federal funding for small businesses.
Our Federal agencies hold many applications from small businesses.: Various agencies have applications from small businesses that want to do work, some of which the government is requesting to be done. Some of which they have come up with on their own, which are called “unsolicited proposals” but which could still be of value. Some of this work is manual labor, some of this work is research and a lot of it is a variety of other opportunities.
Some funds could already be available!: Many of these Federal agencies most likely already have some funds set aside for Grant funding or other funding. These agencies could pull all small business applications and Grand Total the amounts needed to fund all of them and the stimulus package could authorize additional funds, which may or may not be needed. The stimulus package and/or a Directive by the President should order these agencies to "clear their coffers". This may seem like an extreme measure, but these are extreme times.
Some may argue that this will diminish private investment opportunities.: Contrarily by providing these small businesses with funding to start up or perform work, they can begin to invest and seek investors with the capital which is provided to them and/or with their success as they grow .
Perhaps some of the funds being directed to the TARP packages could be redirected here.: Since the issue for our financial institutions is not neccesarily having the money available, but rather a way to move the money, our small businesses can provide for two means of helping with this issue. First they can provide the monies through creating bank accounts and/or making deposits into existing accounts. They will conduct daily business that will begin to rotate these funds and stimulate the economy.
The definition of small business has already been defined.: The Government has already defined the term "small business", so there is no need to redefine it or figure out what articulates into a small business.
These small businesses have already gone through the Grants.gov verification processes!: Before applying for Grants, SBIR’s and/or STTR’s each business must go through a verification process.
There are already established monitoring systems set up.: Government auditing, reports and etc..are already established by each agency.
Grants.gov already has bank routing numbers for each business.: As a requirement during the verification process, Grants.gov requires that a bank account already be established. The funds could be dispersed quickly and put to use quickly.
Unfortunately the amounts they offer, $100,000 to $150,00 in most case are not sufficient to actually start a business. A business beginning with nothing has to have the funds needed to buy supplies, lease property, purchase equipment etc… and cover salaries for at least a year to allow the business to grow and build a customer base which can sustain them. Another source for small business interest is the Small Business Administration.
It is important to provide enough funding: to allow for these businesses to start and to have enough to sustain them for at least a year, two years would be best, so that they can build a customer base to sustain themselves. Not all will succeed and it could be required that unused funds be returned if they fail. But I believe there will be many more that will succeed and some may even provide us all with some unexpected benefits.
So have theses agencies, a list of Granting Agencies is on Grants.gov, pull all small business applications and provide funding. Open up more opportunities for small businesses. These small businesses are ready, willing and able to begin work and put others to work, so let them.
What is the real benefit of small business?
They employ, they buy, they bank, they borrow, they invest, they provide investment opportunities and they spend all across the country.: This stabilizes current businesses and allows them to hire more employees, to buy, to borrow and to spend. They all pay taxes to their states, they pay for permits from municipalities, counties and/or other forms of government, creating State and local revenue. They are perpetual, in that they continue, whereas a stimulus check to Americans may help, it does not provide a continuing of spending and rotation of capital as small businesses would while conducting daily business. They do not require any trade agreement specifications or a “Buy American” provision.Their employees buy, bank, invest, borrow and spend all across the country.: They pay State and local taxes which creates revenue for them.
They employ, they buy, they bank, they borrow, they invest, they provide investment opportunities and they spend all across the country.: This stabilizes current businesses and allows them to hire more employees, to buy, to borrow and to spend. They all pay taxes to their states, they pay for permits from municipalities, counties and/or other forms of government, creating State and local revenue. They are perpetual, in that they continue, whereas a stimulus check to Americans may help, it does not provide a continuing of spending and rotation of capital as small businesses would while conducting daily business. They do not require any trade agreement specifications or a “Buy American” provision.
Their employees buy, bank, invest, borrow and spend all across the country.: They pay State and local taxes which creates revenue for them.
In the end, the only real stimulation you could provide which can do what needs done, is through creating jobs all across the country with a variety of work skills. To meet that objective effectively you have to build up your small business base.
That way when all the other bills such as TARP and others can actually do some good.
Americans have a way of pulling themselves up. Give us a chance to show you how well we can do that and help us, help you, help us all.
Small Businesses, existing and new, could play a big part of stimulating our economy and progression to recovery. It should be included in conjunction with other ideas which are currently a part of the plan.
Our working class is dominated by an apparently singular mythos. One that seems to have found it's genesis in heroic literature and in the American west where individual effort resulted in, presumably, heroic consequences. We salute as a body the individual via his efforts. Even Mister Rogers said that we are each special and unique and that we each have a special and unique place in the world, essentially recapitulating the idea that God creates each of us in order to affect some necessary function within the world as we know it. He was by the way an immensely charming man, Mr. Rogers that is, obviously extremely well intended and is well remembered by me and probably all of my peers. Nonetheless this myth is, I think, an antecedent of the deconstruction of the American working class family.
The industrial age at it's inception with its focus on group endeavor made no dent in this powerful myth or communal self description but did add a principle, a sotto voce contractual principle, in which the individual, with uniqueness of function in hand, even if his or her function was only that of a cog for the betterment of society at large, deserved and got substantial support from that society upon retirement.
This addition to our pre-existing working class mythos has no bearing on the way that other, wealthier, classes perceive a working individual or the working class as a whole. And that, in fact, more wealthy classes seem to see this support of the individual worker as a sort of corporate welfare in which their expenses, read wages, are externalized through the exploitation of taxpayer burden, thereby placing the burden of the care of any individual directly on the working class as a body rather than on that individual.
A laudable system actually, one that not only has provided for millions of Americans upon retirement but circuitously, if unintentionally, engaged an interior myth of the working class while solving the problem in a much more rational, less illusioned fashion. It is both elegant and a textbook Klein bottle effect.
But is this not a societal paradigm that begs a question? Does not the assertion that we are each special and unique end in proving that the great mass of the working class is nothing but an exploitable resource?
I spoke to an elderly man in in Berkeley a couple of years ago. We were preparing his house for sale by replacing windows, doors, sheetrock and cabinets. He said that he had to move because it had become too expensive to live there anymore. He said that in the sixties a working guy would sell his home, if he had to move, to another working guy for a price that was fair and that the other guy could afford. He said that in the early seventies the sale of working class homes became an "Investment Opportunity" for working people. He said that this had never happened before and that before that workers stuck together. In addition he suggested that the self exploitation of workers was increasing and very dangerous calling investors in both real estate and the market sheep in wolves clothing that were compromising the only power that the working class have, unity for personal gain and at the same time creating an environment that could no longer support the very people it was created for.I heard him.
Seemingly the last man standing in this socioeconomic spray of imaginary heroics is the one that writes the paycheck for it is he who appears to benefit from the social security system. This may be true but not for the small business owner. Here enters the amazing web of confusing red tape and presumed cost sharing that is the burden of the small business employer. The impenetrable thicket and skyrocketing costs of insurances in combination with a truly amazing body of law is in effect a Lilliputian effort at restraining what could be the only hope of the working class since these employers emerge from the same class as their employees. Essentially strapping the small business owner to debatable civic responsibilities at the expense of the well being of his employees and ultimately himself thereby, perhaps coincidentally, creating a versus relationship therein. As a result of this quagmire of law and insurances the small business owner simply cannot afford to pay his employees what they need to actually support themselves throughout their lives.
The political sphere resonates with domination and power mongering. What was to be a merely organizational effort i.e., government, has blossomed, triumphed. Corporations via the dollar rule with an iron fist the ground they share with citizens. And idealism at best a quaint spark fades and is overshadowed by a realism necessitated by bullies, the creators and maintainers of wealth. Swords are sharpened in wait for the next spending spree; humanism hasn't a shred of hope in the wake of the almighty faceless economic juggernaut that is self interest as expressed by the corporation.
There is a passage in Richard Jefferies' book The Story of my Heart in which he writes "Is there any theory, philosophy, or creed," he says, "is there any system of culture, any formulated method, able to meetand satisfy each separate item of this agitated pool of human life? By which they may be guided, by which they may hope, by which look forward? Not a mere illusion of the craving heart--something real, as real as the solid walls of fact against which, like seaweed, they are dashed; something to give each separate personality sunshine and a flower in its own existence now; something to shape this million-handed labor to an end and outcome that will leave more sunshine and more flowers to those who must succeed? Something real now, and not in the spirit-land; in this hour now, as I stand and the sun burns. . . . Full well aware that all has failed, yet, side by side with the sadness of that knowledge, there lives on in me an unquenchable belief, thought burning like the sun, that there is yet something to be found.... It must be dragged forth by the might of thought from the immense forces of the universe."
Jeffries casts himself as a romantic dreamer whiling away the day while standing before a beauteous terrain lost in thought with his hands in his pockets. But on closer inspection this passage makes a very interesting point and asks an interesting question. What can the working class point itself toward that will aid them in their efforts and keep them trudging foreword in their labors?
I guess the point I was trying to make before I lost my way here was that economically it has been the tack of administrations and the political sphere in general to solve the post industrial working class problem by setting us one against another economically. But that like the old man in Berkeley I believe that unity is the only way out.
During a conversation I had with Taj Mahal several months ago I asked what he thought would become of the working class after the deconstruction of the support systems attendant upon it and the obvious end of the industrial age here in America. His answer was that we as a class should become creative producers in the world arena. He said that creativity could and should be learned and taught in schools. He said that as a body the working class could, utilizing creativity, raise itself from the desperate straits it now faces.
This seemed idealistic to me initially. As I gave it some thought though I realized that I had internalized a presumptive and perhaps arrogant element of our world view that states that creativity and the efforts that it fosters are a realm available to a few.
He may be on to something. I don't know.
I do know that something has to happen though. The burgeoning working class is far too large to fit in the service industries and the service industries cannot pay their employees enough to ever buy a house or send even one kid to college.
Anybody got any ideas?
URBAN RENEWAL
Reviving America's urban areas is well within our reach and abilities. It may be amazing to some how simple my ideas are but simplicity is often a hidden blessing. No dobt congress has enacted many legislative efforts to solve the crisis of urban blight but after many millions spent and many failures we seem farther from a solution than ever before. Let me introduce to you a concept called "Privately Funded Urban Renewal". It can also be described as "bottom-up redevelopment" in the spirit of President elect Barak Obama's message that the "trickle-down" theory has failed. We must adapt his idea of the bottom-up approach which has always worked in America. After all it is the approach that worked to establish the early colonies. There were hundreds of acres of land given freely to european emigrants who had the will and ability to work it. This approach created the wealthy foundation for the American dream.
Unlike conventional redevelopment which is performed by a handful of well connected and funded people. Bottom-up redevelopment can be done by hundreds even thousands of people with small amounts of money. Unlike conventional redevelopment which profit's are shared by a handful of people, "bottom-up redevelopment" can spread profit to many Americans from any walk of life. Privately funded urban renewal can be as simple as one person buying one house in a blighted area. Renovating that house and selling it back to someone in the local community for about the same monthly payment as their rent. Or it can be a private real estate syndicate purchasing an old industrial building and converting it into a mall or building hundreds of high quality modular units to meet the pressing need for affordable housing.
Bottom-up redevelopment actully gives the middle class the power to change America's inner cities and it gives people who live in the community an opportunity to participate and profit from the redevelopment of their own community. It has to be a well coordinated effort between government, non-profit groups, private investors, churches, universities and community groups.
I represent a real estate investment company in the los angeles area and we are involved in urban renewal in East Saint Louis, Illinois. Our motto is "Profit Through Philanthropy". Our goal is to rebuild American inner cities one home at a time. One neighborhood at a time. One city at a time.
More to come. Cambridge Financial Consultants, El Monte, CA 91731. 626-618-0181
In his first weekly address, President-elect Obama today noted that while the road ahead to economic recovery is long, we will get there if "each of us resolves to pitch in." Americans yearn to do just that, though many are justifiably suspect of increased taxes being effectively utilized by the federal government to help hard-working fellow citizens who need some help achieving the dream. More likely, folks expect the money will get "lost" in the pockets of Capitol Hill.
So if we want to "spread the wealth," here's an idea to do just that. Instead of increasing taxes, create a fund backed by the Federal Government and managed by an independent financial/economic titan Americans trust (e.g. Warren Buffett) that is dedicated to helping American families and small businesses get through this tough economic period. Targeted at households earning $100,000 or more, the 24-month American Families & Small Business Investment Fund would be offered as a payroll option workers could allocate a small percentage of their salary toward with a tax-free benefit and nominal yield at its closing in 2011. In turn, the fund will act as a microcredit source for qualifying families and small businesses that need short-term financial assistance in this challenging time … it’s the 21st century American version of the Grameen Bank. Here’s how it works:
TODAY
· Jane the architect currently earns $4,000 a week - $208,000 a year.
· Approx. 8.8% of Jane’s weekly salary goes to pre-tax deductions for medical, dental, vision and 401k.
· Another 25.6% of Jane’s weekly salary goes to federal Taxes, Social Security, and Medicare.
· This leaves Jane with $2,715 a week.
ENTER THE FUND
· Starting in January 2009, Jane elects a payroll option to have 3% of her weekly salary invested in the American Families & Small Business Investment Fund - $109 a week or $5,668 annually at a tax-free, 2% interest rate – leaving Jane with $2,606 a week.
· The fund allows qualifying families and businesses to take short-term loans at a flat interest rate of 2.5% - different loan caps for families and businesses and payment terms TBD; “qualifying” is not based solely on ability to repay but more so on the difficulty of the economic situation facing the applicant.
· The 2.5% interest rate goes to pay fund investors 2% interest with the other half-percent covering fund operating, processing, and default costs (bad loans are anticipated to be few - Grameen Bank reports just 1.78% in bad debt).
· Jane opts to invest $109 a week for the full 24 months, though participants can opt-out at any point (those who encounter economic difficulty themselves during the period can withdraw early less the taxes they would have paid on the amount invested).
· The fund closes on December 31, 2010, and Jane will be paid out $11,562 in 2011 – first half in January with the balance in July.
There are over 19 million households in the U.S. earning $100,000 or more. If just 30% participated at an average of $65 per week, the fund would generate over $38.5 billion in two years. If the average loan value is $7,500, the fund could help over 5.1 million American families and small businesses. In turn, it will also generate over $770 million in interest for investors.
For Federal prosecutors, it’ll be like shooting fish in a barrel.
... But then, I'm watching the CBS Evening News and one of the proposals is for the government to buy stocks from some of the companies they're going to bailout? Wouldn't that be a BAD INVESTMENT for an AVERAGE INDIVIDUAL?
Wouldn't it make more financial sense to just buy back the Fed?
"Watch your rights!" (StahrT)
EMK
We should have invested more with and amongst our neighbors in our communities and less in what we thought would get us by on the sly with the least amount of effort. Now we are face to face with the crushing reality that our communities are all we have and all we ever did have to rely upon... and they are in disrepair due to our neglect. It is the fault of none but ourselves that the entire economy is based on a global game of poker amongst those who seek to do little more than 'cash-out' at the right time instead of being based on the direct and personal provision of real and needful goods and services to and for our neighbors governed by local economies of scale.
It is not some small enclave of rich professionals that have built this house of cards only to blow it over. Rather is it an entire nation of people who wish to live as though they are rich, whether with their own capital or someone elses... be it a matter of their own savings or what credit/loans/investments may be obtained from others. As a nation, it is we that have sought to make wealth building our livelihood, regardless of what that wealth was built upon... It is we that have turned the marketplace into a sweepstake. Even the most fiscally responsible have seen fit to gamble their savings so as to be able to afford retirement rather than to roll up their sleeves and toil to make retirement more affordable. And what has justified it all?... the simple rule that rules the simpleton, 'that which everyone is doing must be what should be done and therefore should be what everyone must do.
WALL STREET 9/15/08
How worried should family investors be?
Variable rate annuity are backed by a mutual-fund type account. These are your assets. No creditor can touch them.
Fixed rate or life insurance: you may not be able to cash out your policies immediately (done to avoid like a run on the bank). Each State has a guarantee fund similar to FDIC.
In a liquidation, policyholders are ahead of almost anybody else, including bondholders.
If AIG sells its annuity unit, all terms and conditions of the policies remain the same.
The Investment Management Division is not subject to bankruptcy filing. The money in your investment account is yours.
Bank of America plans to keep Merrill Lynch as is with the same name.
Mortgages are no longer callable. If your mortgage holder goes into bankruptcy, most likely another bank will buy you loan.
For Bank account deposits, make sure you spread your wealth with no more than $100,000 in one bank.
Relax
Each $ contribution to the Obama Campaign will bring you far more in terms of the return on your 'investment' in the Obama Administration.
Contribute today and get back more than you put in, in terms of reasonable health care costs, better and protected jobs, a middle-class tax cut, affordable college education, and so on.
If making money is the only interest you have as a middle-class person, this contribution will make sense.
DONATE: http://my.barackobama.com/page/outreach/view/main/pragmatic
Hey Everyone,
I figured now would be a good time to remind everyone (again) about some upcoming space events, that would be worth going to. We have a couple of major events this week, as well as future events upcoming. I promise reports to any and all I attend, and I suggest that you attend as well
Well, what does the U.S. debt have to do with foreign policy and economic policy? Debt investment for influence!
Remember that quote in my previous post about the U.S. debt trading from Suze Orman? Well, to refresh:
After your debts have all been paid off, you are to apply the money you were paying all those months toward creating your future.
(Again, as I said before, and keep in mind, since I don't want to incur "the wrath of Suze Orman," Suze Orman has not made any endorsements of any candidates or their policies publicly; and, the following is not to be interpreted as an opion of hers, but I am using the quote as a reference as it does make a good point of what government should be doing with the debt.)
This CBS video indicated that "$.44 of the U.S. debt is being held by foreign investors," and they include, as mentioned in the video:
I've also found other investors from this U.S. Treasury list, which include, but are not limited to:
In this commentary by MSNBC, with this question considering the debt, and it indicates that it's not just foreign investment into the debt:
The Bush administration talks about spending a million here and a billion there adding up to trillions for the war. Since the country is so far in debt, where is all this money they are talking about spending, coming from? I know it is borrowed, but from whom?-- Dick, Howard City, Mich.The money is borrowed from buyers of Treasury securities -- which are basically a big batch of IOUs that are auctioned off every three months. As the auction date approaches, the Treasury figures out how much it will need to pay off old debt and cover the government’s latest round of overspending. When the auction day comes, buyers submit bids in the form of the interest rate they’re willing to accept. You can choose to make a competitive bid (you ask for a specific rate) or a non-competitive bid (you agree to accept the average rate of other winning bids.) When all the bids are in, the Treasury starts at the bottom, taking the lowest bids until it has collected enough money to cover that round of borrowing.The money flows in from all over the place: from individual investors and corporations, pension funds [emphasis added] and governments, both in the U.S. and around the world. Basically, anyone with a large amount of cash looking for a safe place to put it is a good candidate for holding U.S. Treasury debt. So just who are these lenders? As of last June (the latest complete breakdown available), the biggest holder of Treasury debt was the U.S. government itself, with about 52 percent of the total $8.5 trillion in paper that's out there. Most of the government’s holdings are massive savings accounts for programs like Social Security and Medicare. Just as you may prefer to keep your Individual Retirement Account in the safe Treasury bonds, the folks who manage the Social Security Trust Fund are looking for a secure investment, too. That’s leaves a little over $4 trillion in public hands. The biggest chunk (about 25 percent of the $8.5 trillion total) is held by foreign governments. Japan tops the list (with $644 billion), followed by China ($350 billion), United Kingdom ($239 billion) and oil exporting countries ($100 billion).Other big holders of Treasury debt include state and local governments ($467 billion); individual investors, including brokers ($423 billion); public and private pension funds (319 billion); mutual funds ($243 billion); holders of US savings bonds ($206 billion); insurance companies ($166 billion) and banks and credit unions ($117 billion.)Once issued at auction, Treasury securities enjoy a healthy second life when they’re traded in the so-called “secondary market” (aka the “bond market.”) The prices of bonds bought on the open market go up and down as the market reacts to changes in demand and news about the economic outlook like inflation. But no matter what you pay for a bond, if you hold it until it matures, the government has to pay back the full amount that was borrowed when the debt was first auctioned and issued.
The Bush administration talks about spending a million here and a billion there adding up to trillions for the war. Since the country is so far in debt, where is all this money they are talking about spending, coming from? I know it is borrowed, but from whom?-- Dick, Howard City, Mich.
The money is borrowed from buyers of Treasury securities -- which are basically a big batch of IOUs that are auctioned off every three months. As the auction date approaches, the Treasury figures out how much it will need to pay off old debt and cover the government’s latest round of overspending.
When the auction day comes, buyers submit bids in the form of the interest rate they’re willing to accept. You can choose to make a competitive bid (you ask for a specific rate) or a non-competitive bid (you agree to accept the average rate of other winning bids.) When all the bids are in, the Treasury starts at the bottom, taking the lowest bids until it has collected enough money to cover that round of borrowing.
The money flows in from all over the place: from individual investors and corporations, pension funds [emphasis added] and governments, both in the U.S. and around the world. Basically, anyone with a large amount of cash looking for a safe place to put it is a good candidate for holding U.S. Treasury debt.
So just who are these lenders? As of last June (the latest complete breakdown available), the biggest holder of Treasury debt was the U.S. government itself, with about 52 percent of the total $8.5 trillion in paper that's out there. Most of the government’s holdings are massive savings accounts for programs like Social Security and Medicare. Just as you may prefer to keep your Individual Retirement Account in the safe Treasury bonds, the folks who manage the Social Security Trust Fund are looking for a secure investment, too.
That’s leaves a little over $4 trillion in public hands. The biggest chunk (about 25 percent of the $8.5 trillion total) is held by foreign governments. Japan tops the list (with $644 billion), followed by China ($350 billion), United Kingdom ($239 billion) and oil exporting countries ($100 billion).
Other big holders of Treasury debt include state and local governments ($467 billion); individual investors, including brokers ($423 billion); public and private pension funds (319 billion); mutual funds ($243 billion); holders of US savings bonds ($206 billion); insurance companies ($166 billion) and banks and credit unions ($117 billion.)
Once issued at auction, Treasury securities enjoy a healthy second life when they’re traded in the so-called “secondary market” (aka the “bond market.”) The prices of bonds bought on the open market go up and down as the market reacts to changes in demand and news about the economic outlook like inflation. But no matter what you pay for a bond, if you hold it until it matures, the government has to pay back the full amount that was borrowed when the debt was first auctioned and issued.
(Note: The article was published on March 4, 2007, so the article's values are less than what the CBS video mentioned yesterday.)
I also recommend these links from the U.S. Treasury for the most current breakdown on the debt, though it is dated for 12/31/07: abbreviated summary, summary, and repayment schedule. These include the domestic investment in the debt, though the corporate investments into the debt are not detailed, and I couldn't find a list like the one I found for the foreign investments. (We're going to need either an accountant or economist to explain some of this stuff, as I'm not as versed in economics, but that is still quite a bit!)
Apparently, we may be over the debt limit as it is! Ron Paul has quoted, in his writing, How Government Debt Grows:
Today our national debt stands at $8.2 trillion, which represents about $26,000 for every man, woman, and child in America. It's time for American taxpayers to understand that every dollar will have to be repaid. We should have the courage to face our grandchildren knowing that we have done all we can to end the government spending spree. ...Interestingly, the legal debt limit is only $8.18 trillion, a figure that was reached a few weeks ago. This means the Treasury department must ask Congress to raise the debt limit very soon, most likely as part of a larger bill so it can be hidden from the American people. ...(March 14, 2006. Again, his quoted value on the debt is less than the CBS video statement.)
Today our national debt stands at $8.2 trillion, which represents about $26,000 for every man, woman, and child in America. It's time for American taxpayers to understand that every dollar will have to be repaid. We should have the courage to face our grandchildren knowing that we have done all we can to end the government spending spree.
...Interestingly, the legal debt limit is only $8.18 trillion, a figure that was reached a few weeks ago. This means the Treasury department must ask Congress to raise the debt limit very soon, most likely as part of a larger bill so it can be hidden from the American people. ...
(March 14, 2006. Again, his quoted value on the debt is less than the CBS video statement.)
Dennis Kucinich has made a reference concerning the corporate influence, in Dennis on Coporate Power. Now, the article is more general, but the following quotes are relevant to this topic:
The challenge before us today is whether we can maintain a government of the people, by the people and for the people, or whether we will timidly accept the economic, social, and political consequences of a government of the corporations, by the corporations, and for the corporations. ...Enron's considerable financial contributions to the campaign coffers of 71 Senators and 186 House members clearly demonstrate the urgency of creating full public financing of our elections.... Despite the overwhelming influence which corporations have in the life of our nation, I see a new era of corporate accountability. I see a new horizon in America where ethics, sustainability, and sensible priorities guide corporate conduct in cooperation with vigilant, fair-minded, government regulation.We cannot stand by idly while powerful economic engines -- virtually unregulated corporations -- violate workers' rights, human rights, and the environment, sweeping aside antitrust laws, eliminating competition.We need a new relationship between our government and corporate America, an arms-length relationship, so that our elected leaders are capable of independently affirming and safeguarding the public interest. Just as our founders understood the need for separation of church and state, we need to institutionalize the separation of corporations and the state. This begins with government taking the responsibility to establish the conditions under which corporations can do business in the United States, including the establishment of a federal corporate charter that describes and clearly delineates corporate rights and responsibilities. ...
The challenge before us today is whether we can maintain a government of the people, by the people and for the people, or whether we will timidly accept the economic, social, and political consequences of a government of the corporations, by the corporations, and for the corporations.
...
Enron's considerable financial contributions to the campaign coffers of 71 Senators and 186 House members clearly demonstrate the urgency of creating full public financing of our elections.
Despite the overwhelming influence which corporations have in the life of our nation, I see a new era of corporate accountability. I see a new horizon in America where ethics, sustainability, and sensible priorities guide corporate conduct in cooperation with vigilant, fair-minded, government regulation.We cannot stand by idly while powerful economic engines -- virtually unregulated corporations -- violate workers' rights, human rights, and the environment, sweeping aside antitrust laws, eliminating competition.We need a new relationship between our government and corporate America, an arms-length relationship, so that our elected leaders are capable of independently affirming and safeguarding the public interest. Just as our founders understood the need for separation of church and state, we need to institutionalize the separation of corporations and the state. This begins with government taking the responsibility to establish the conditions under which corporations can do business in the United States, including the establishment of a federal corporate charter that describes and clearly delineates corporate rights and responsibilities. ...
What could be some of the effect of the debt investments, especially by foreign countries and coporations by these entities on the current issues concerning NAFTA, foreign policy, immigration policy, and even the Iraq War, etc?
Now, you ask, why am I citing Ron Paul and Dennis Kucinich? A lot of these interest want Obama to play just as politician have always been. Based on my understanding of Barack Obama, like this summary of his life and from articles like this one, which talks about Barack Obama's willingness to work with people (though, in my opinion, he will need to be more careful with those he works with), I think that he really wants to do the right thing, despite the donations he is getting from various sectors (link from this Wall Street Journal article). I also think that Obama has a good starting plan for the economy; however, people like Dennis Kucinich and Ron Paul have an angle concerning the issue that needs to be addressed as well, and we, even as Obama supporters, need to discuss them and be aware of their points-of-view.
The only way Barack Obama can have a fighting chance on bringing change is that we become aware of the scope of the issues that we need to face (not just stuff about pastorial comments, for example), even if it mean we need to take a look at the views of others, even rival candidates, so that we get the best president and the best policies, and maybe, the government will take Suze Orman's advice!
Please, feel free to use this post for discussion with other bloggers, friends, and even supporters of rival candidates. It may have been a "blessing in disguise" that there was so much time between the Mississippi and Pennsylvania primaries, though the media botched it.
"The society's degredation relies/ not on our differences/ but the separation within." Frgt/10, by Linkin Park.
(Courtesy of Beth Adams)
The Renewable Energy and Energy Conservation Tax Act of 2008 (HR 5351), which would extend the 30% investment tax credit (ITC) for solar energy property and the production tax credit (PTC) for qualifying renewable energy facilities. The legislation calls for the repeal of certain tax benefits enjoyed by oil and gas companies. ...
Hello to those out there reading my first ObamaBlog post. Basically the reason I set up this blog is to help me in my business venture that I am wanting to start. I am a young entrepreneur, still in college (20 years old). I am wanting to start a solar panel development company, and I believe Barack Obama will be the greatest asset I have in order to start this. I have been thoroughly reading through ALL of Obama's issues related to this (i.e.-technology, economy, environment). All I can say is wow, I need him. He is who I want as my president in order to be successful at this. I can honestly say, for the first time ever, I am VERY excited about the presidential race. This one is going to change history, I'm going to be pushing hard for him. If anyone out there knows ANYTHING AT ALL related to my challenge, please contact me. I'm pretty new at a lot of this, so I want to here from you. Anything related to Photovoltaics, Business/investing, to government funding, among other things would be awesome.
Thank you all for reading, I hope to hear from a lot of you soon. Stay tuned for my next post, as I bring everyone along with my progress. We are all in this together, get excited.
Blake Tiggemann
Achievement yields the remarkable feeling of accomplishment, especially when it contributes to a substantial return-on-investment in the near future. Well, this achievement was the $20 donation (or investment as I would call it) I just made out to Obama on his website earlier today, and this near future is Election Day. Now, $20 is a lot of money to me because I'm a 2nd year college student who is depending on student loans to pay off my books and tuition costs. I'm relying on my investment to reflect my support for Obama; to say that I've made a commitment to believe in a change that is unique and unlike anything that I've ever seen in politics.
But then, I have to remind myself that I'm not the only one that lives in this country. It's unfortunate to see that my investment has the possibility of going stale, because not all eyes see the same. Perception is reality, and the more I see pessimism and negativity watering down "good" politics, politics of hope, the more unease is inflicted upon my mind. It will be interesting to watch the growing support for Obama in the coming weeks; more investments to accompany mine perhaps. The question is, will it be enough?
I stumbled upon one supporter's description of the cosequences of her making multiple donations for this drive and her motivation for basically shaking her piggy bank:
OMG, I'm so broke after so many donations and matches this month, but you know what? I just donated again. And bought a t-shirt. :-) I figure in a couple months, my finances will get back on track. But if I *don't* donate NOW, my country might NEVER get back on track!
America is lucky to have Barack Obama.
I have to admit that I have not known of Barack for that long. After listening to his DNC speech, my interest was piqued. I went out and bought his book and agree with his logic on almost all the issues. I believe he has the ability to follow through with his thoughts and help usher America into today's global environment.
I went to Bentley College and have a good feel for business in America and the economy. I am worried. The deficit. The lack of investments in medical grants, education (math and sciences), and technology. The inability of the Administration to talk through disagreements with foreign countries. The deficit could accelerate the downfall of the USA. Pollution could end of the world.
Barack will do his best save us all. He gives us hope. Obama knows that you cannot take shortcuts. Investments must be made. Negotiations need to take place. He has a keen reasoning and is convincing me that his weaknesses are actually strengths. He lacks experience but has an excellent track record. As Obama likes to say, Cheney and Rumsfeld have plenty of experience.
Enough for now. I hope we can all learn from eachother and, in the process, be the strong legs that hold up this 'tall, gangly, self-made Springfield lawyer.' Smile, good things are to come.
