The Mechanics of the Meltdown

Guest Commentary for all the Faithful Federalists out there...

By Marilyn Barnewall

To whom should we listen about banking, the stock market, the economy? There are so many differing analyses right now, it is difficult to know.
One opinion is that Wall Street is sitting on $50 plus trillion in leveraged assets and the United States government has a $5 to $6 trillion gross domestic product (GDP). There is, this opinion says, no way to avoid a total meltdown.
Today I read an analysis by Stratfor, whose opinion I respect tremendously. Stratfor says we must focus on the political realities, not the economy. Using this strategy, Stratfor had been correct in predicting many things Wall Street, the Treasury, the Fed, and economists around the world have missed. Stratfor says we will have an ugly, painful recession, but the “fall of the housing markets will be trumped by the size of the American economy.” They see the core problem as the fall of the housing markets and approach problem resolution from that perspective.

Immodest Proposals

Congress is actively debating solutions to shoring up Social Security, while at the same time juggling solutions to the frozen credit markets and Wall Street’s adventurous experiments with leveraged liquidity. Among several presented solutions is a bold proposal for a short-term fix that would significantly alter the American public’s savings structure, and that lays out a radically different strategy of Promoting the General Welfare.

Here is how James Pethokoukis writing for US News described it:

“House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should.”


A mild argument to this strange and frightening proposal is that this was only one of several solutions floated about in the House of Representatives. But what cannot be discounted is the fact that it was taken seriously by at least one Democrat representative, Jim McDermott, who seems to be convinced that a government “investment” of $80 billion is not an effective policy towards increasing the savings rate of the American people. So convinced, despite referencing rate figures that flatly discount the accumulative growth of those same tax-deferred savings.

And here is a summary of the recent testimony Ms. Ghilarducci gave before the House Committee on Education and Labor.

“On Oct. 7, they heard testimony from Teresa Ghilarducci, an economics professor from The New School for Social Research in New York. She proposed a radical, short-term fix, where 401(k) plans would be turned over to a guaranteed retirement account composed of government bonds earning a 3 percent annual return, adjusted for inflation.

When workers begin collecting Social Security, the account would pay them an inflation-adjusted annuity, based on the accumulated funds. For example, a 55-year-old worker with $50,000 in a 401(k) account in August would swap out the $50,000 for a guarantee of $500 per month in retirement.”

And what about a long-term solution?

“Ghilarducci proposed the creation of universal guaranteed retirement accounts in which the federal government invests $600 for every worker. Workers would put 5 percent of their pay in and the account would earn a guaranteed 3 percent rate of return, plus inflation. The cost of this plan would be offset by doing away with most tax breaks currently offered on 401(k) accounts, so the government wouldn't have to pay any more than it does now. The accounts would be safer and guarantee all workers an income during retirement.”


One can only assume that for this solution to work, if backed by the public, it would necessitate the complete removal of the 401(k) stipulation in the tax code, eliminating the most common vehicle for the accumulation of private savings and wealth, and essentially replacing it with a mandated “universal” retirement tax. All this on top of income tax, and Social Security. And you can bet your (literally) bottom dollar that there would be no survivorship to these accounts, nor liquidity access, nor any other freedom of asset management, despite being required to fund them with 5% of your hard-earned wages.

That’s socialism. But it’s all okay because “the government wouldn’t have to pay any more than it does now.” Did everyone get that? By not taxing a portion of a person’s income that is set aside for future, private capital, as is the current 401(k) system, the government is consequently unable to spend it, which according to the government translates to paying us. So I guess it’s all a matter of what kind of socialism we prefer.

Or semantics.


But what may be most frightening of all is the evident support among the constituency.

Here’s a reader’s talkback post from the above U.S. News article.

Solves social security meltdown
In a sense, this plan is brilliant. At 3% return for the defined benefit program, the Obama administration can move inflation up to 10-12% and eliminate the future social security meltdown problem. Of course, we have to get rid of the cost-of-living adjustments for social security (one of which just kicked in giving rich elderly a 5% bonus while they performed no work, while most American workers are lucky to see a 1-2% wage adjustment annually).
I'm encouraged that Obama will make our senior citizens earn their paychecks. Michelle spoke at length that people will be made to work and there will be no shortages of volunteering opportunities. Let's clean up our streets, get seniors out raking leaves, picking up trash, cleaning up dog droppings in our parks, mowing city property, mentoring children in the schools and serving other useful functions. Every government dollar provided should be met with enthusiastic joy and reciprocity by the receiving citizen. An idle citizen is an unappreciated citizen.
redherkey of NE
Oct 23, 2008 14:22:17 PM [permalink] [report comment]

Senator Feinstein's Reply

Dear Mr. Sneed:



Thank you for your letter expressing concern about Congress' recent consideration of a plan to meet our Nation's credit crisis with financial help from the Federal Government.



This is a difficult situation for which there are no perfect solutions, and I would like to share my thoughts and concerns with you. Please find attached two statements that I have given on the Senate floor detailing my reasons for supporting the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), which the President signed into law on October 3, 2008.

A Government Of The People, For The People, And By The People

Here's a letter I sent to my distinguished U.S. Senator from California:

Feel free to copy it and send it along to the other 99 tools in Washington....

Sen. Diane Feinstein October 2, 2008
331 Hart Building
Washington, D.C. 20510


Senator Feinstein, how DARE you!

You’ve just been quoted as having said the following:

“I’ve received calls and e-mails from 91,000 Californians, and 85,000 of them were opposed to this measure. There’s a lot of confusion out there, people aren’t understanding this…”

The only people who take the time to actually call and e-mail you are the ones who do understand, confusion notwithstanding. I guarantee you that the people who truly don’t understand these economic events and circumstances, despite being the same people who have entrusted you with their representation, are in fact the ones who will not take the time, or have the impetus to contact you. And you, I am sure, are quite aware of this. They may feel powerless or lazy or both; nevertheless, it is your DUTY to represent them with clear and reasoned statesmanship. And for those that do take the initiative to contact you, you have an even greater duty to heed their wishes!

85,000 opposed, eh? And you still voted "yes".

So I ask again, HOW DARE YOU?!?

Your lack of leadership is the reason why you’ve only received 91,000 phone calls and e-mails, instead of 91 MILLION. But please do not waste any more time dithering words and insulting that first tenth of 1%. For if you do, then you are going to see a lot of people making it their personal mission in life to RUIN your career. From San Diego to Crescent City, and from Hollywood all the way up the northern Bible belt to Redding, you will be hearing a clamor such as has never been heard before in the Great State of California. Is that understood? Or is that too vague and confusing for a Senator?

Now if you are not happy about being unable to garner the co-operation from the Representatives of California in that lower little house of Congress, and thereby secure as much unnecessary pork as possible for all the lobbyists who you mistakenly believe assisted in getting you elected, then why don’t you just stop, and instead offer some leadership that will inspire confidence, not apathy, in our Republic? If you truly believe that 93.5% of constituents who contact you are “confused”, then why don’t you let us know that this tax-payer bailout, er,.. “rescue plan” will do the following things that are necessary and needed, and not institute statist initiatives that will forever tarnish the Constitution, and drain what’s left of our nation’s wealth?

Note the following DEMANDS.

DEMANDS OF THE PEOPLE OF THE UNITED STATES OF AMERICA

1. Rescind the Community Reinvestment Act - this is a huge contributing factor to the FMAC and FNMA meltdown, brought on by pressure from all sides to increase the number of affordable (adjustable) home loans, while at the same time endeavoring to prop up the non-sustainable demand for the increased supply of the home construction industry.

2. Draft responsible trade legislation so that concrete and construction jobs are not the only available labor industry for thousands of people in any given region. And “green” jobs will not fill the void, either, so stop selling the fantasy.

3. Require that sound accounting principles for Freddie Mac and Fannie Mae be instituted immediately. Ginny Mae, too. Or is Ginny something we should even be worried about? Please let us know.

4. Require that sound regulation/auditing processes be instituted immediately for Freddie and Fannie.

5. Institute a contemporary of the Glass-Steagall Act, so that Wall Street and Main Street are not keeping all their eggs in the same basket, and letting their eggs multiply like rabbits meant for dinner…

6. Allow ZERO campaign contributions to ANY political party from quasi-governmental entities, in order to avoid a conflict of interest. Prosecute such past dalliances.

7. Any and all possible net gains, or interest accrued from any government purchase of mortgage backed securities shall be used to retire debt. It SHALL NOT be used for funding NEW entitlement programs.

8. No earmarks in any “rescue” bill. Nothing for ACORN, LaRaza, or any other "nonprofit organizaiton." This also is not the time nor place for Energy legislation that would have been well debated if not for Nancy Pelosi turning off the cameras and turning out the lights. And no surprise tax cuts for Indian reservations, either. They have casinos, now.

9. The Secretary of the Treasury is not to be given unconstitutional powers, as this position is a political appointee who is not elected and accountable to the U.S. taxpayer beyond the current Administration. Period. End of story. (Thank you for not budging on this one, btw)

10. Exhibit leadership by demanding from the American People (yourselves included), more than just tax dollars. Demand that we work not just from the top down to solve this crisis, but also from the bottom up, so that we may meet in the middle. Let us know how we can save our money and accrue less debt, while still supporting business, and growth. Tell us what we can do, not what you keep failing to do.

If there is more understanding necessary from the citizens of the United States, then it is up to you to better inform the media, your colleagues, and yourself of the great and tumultuous issues facing our economy and our way of life. Admittedly, there are many who will not care to hear or be required to endure these hard truths. But it is nevertheless your DUTY to heed and respect the wishes of those you govern, regardless of state-wide comprehension. By disparaging the principles of Democracy for the convenience of appeasing the oligarchy, you tread a dangerous path, Senator.


Respectfully,




Jared E. Sneed
Citizen and Resident, California, U.S.A.

Re-Assurances From The Obama Campaign

So it was today on The Jerry Doyle show that I heard of the Obama campaign's latest attempts to mainstream and move to the center...,

by issuing some statements including this gem:

"(the campaign) strongly supports a woman's decision to bring her pregnancy to full-term."

Now, is this a simple matter of political ineptitude and thoughtless campaigning? Or is it something much more sinister? Maybe a bit of both? Any way you look at it, it smells...

Admittedly, it is unfortunate that statements such as this come about due to platform issues and the divide of ideology among the two camps - left/right Democrat/Republican....

Nevertheless, I find it astonishing that this kind of statement could ever be uttered without at least having been immediately clarified or retracted.

Seriously, does the Obama campaign actually think that by claiming to support something that should not require or ever even be addressed by Government, or those seeking office, that it will soften its image among centrist and right-wing voters?

It sounds like they're trying to make people feel bad about not agreeing with the "right to choose" platform, via the back door of claiming that as far as the Government is concerned, your decision to not end a pregnancy by killing a fetus and instead bringing a child into the family is "supported". As if this kind of life-choice were something quaint, and traditional. Something to inspire an "awwww..." and "how cute, the little people deciding to take the more difficult path and raise a child.."

Jesus, I want to vomit.

It's true that people who either agree or disagree with abortion in general vote, sometimes even early, and often! (in Illinois)

But no matter what our views on the sticky legality-mixed-with-morality abortion debate, We The People, and prospective parents, specifically, neither ask for nor should we ever need to ask for Government's "support" based on one or any ideological position. period.

And once we do need to ask, then all will have been lost.... How nice of the Obama campaign to re-assure us that abortion is not yet a requirement or even an expectation!

-YARK- ... erp.

Now you'll have to excuse me. I need to brush my teeth.

Lol..

Providing For the National Defense

On July 2, 2008, Sen. Barack Obama was apparently quoted as saying the following:

"We cannot continue to rely on our military in order to achieve the national security objectives we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."

He also proposed to double the size of the PeaceCorps, and quadruple the size of the AmeriCorps.

An engaging piece by World Net Daily's Joseph Farah begs to question why more people are not alarmed by these proposals, and why there seems to be very little attention by other media.

What I find even more troubling than Mr. Obama's proposal for a "civilian national security force" is how it is doubly alarming due to the qualifier that precedes this proposed force. His statement, "We cannot continue to rely on our military in order to achieve the national security objectives we've set", speaks volumes and is equally deafening in volume.

The core function and resposibility of the United States Government is to provide for the National defense. Currently, the U.S. Military, all branches, serves to facilitate such provision. If, as Mr. Obama so ridiculously claims, we can no longer "rely" on that Military, then he is bluntly stating that the core function of our U.S. Government must be usurped.

Or am I reading too much into his words?

"Just words", right?

The Institution of Marriage

I've just had a thought on all this LGBT activism that's pushing so hard for faux-marriage.





Is Marriage (classical, 1 man/1 woman matrimony) an institution?

Or is it not?

For if it is an institution, then the circumstance of one's sexual orientation should obviously factor into that person's decision to get married. Right?

Stay with me here... there's more.

If a homosexual does not wish to indulge the option of forming a union with a person of the opposite sex, for the purposes of having children and raising a family with that person, then are they at that point making a decision to abstain from an institution? Clearly, yes. At least this particular institution.

Now if that same homosexual prefers to partner with someone who is alike in gender, then on first account the option of procreation is summarily forfeited. Therefore, in order to raise a family our same-sex couple would need to participate in some sort of institution that could facilitate such an endeavor. This is where science or adoption comes to the rescue, apparently.

But it remains that said homosexual has made a conscious and deliberate choice to avoid the institution of classical Marriage. Homosexuality may or may not be a choice, but entering into the institution of Marriage definitely is. (except for arranged marriages...)

Now let's pretend that Marriage is not a valid institution. This being the case, then our homosexual couple is free to enter into a union consisting of... what exactly? And without a facilitating institution, how would it be possible to raise a family?

Now I mentioned science and adoption earlier, but isn't that just cheating? And what basis is that to start a family on? Really! A family unit founded on the principle of cheating? That should do real well for establishing moral principles! but i digress..

Returning to my point, it can easily be established that legally and socially recognized Marriage, between 1 man and 1 woman, is in fact an institution whose sole purpose is to facilitate the creation of a family, which involves procreation. Any refutation of this would be fallacious for the following reason: humans typically are not monogamous creatures unless engaged in child-rearing. They just aren't. And yet like many other species in the animal kingdom, humans are quite often predisposed to mate for life with a very limited number of partners, and more often than not only 1 at that. Not to mention the biological drive to procreate contributes to the formation of relationships, for the purpose of sexual and emotional gratification. These relationships will naturally gain solvency, otherwise the survival of the species would be in jeopardy. Hence a definition of this institution can be established. We have historically named that definition "Marriage"

So as the biological drive to procreate is intentionally misdirected towards the wrong gender, and a non-procreative relationship is established, it follows that the aforementioned institution cannot take form. And without that institution, there is no "marriage".

It really is that simple.

This is Amazing!

A scout caught this Golden Trout (the California State Fish) while on a troop backpacking trip deep in the high Sierras near Mt. Whitney.

These fish are typically only 10 inches or so..

This one's a trophy!

I have a new mission in life. To bag one of these! (or I might just CPR - Catch,Photo,Release)

Here's the original link:

http://fishingnetwork.net/forum4/showthread.php?t=4265