A $9 trillion federal deficit over 10 years may be too hard to comprehend. But this part is easy: Such unwieldy amounts of debt could have an impact on Americans' bottom line one way or the other -- if not tomorrow, then the day after.

The U.S. government has been spending a great deal more than it has been taking in, and it is on track to do so well beyond the next 10 years. It has been borrowing money to make all that spending possible and it has to pay the money back with interest. How, you ask? By borrowing more.

The solution is straightforward if unpleasant: Shy of finding a fairy willing to leave trillions under Uncle Sam's pillow, lawmakers will have to raise taxes and cut spending.

The more the country lives on a credit card, the more it makes itself beholden to the demands of its creditors -- many of which are overseas. The danger is that buyers of U.S. debt could become concerned that the country is running too high a balance. If so, they will demand higher interest rates -- thereby making the country's debt problem worse -- or they'll put their money elsewhere.

At that point, things would get ugly.

"Taxes would rise to levels that would make a Scandinavian revolt. And the government would not be able to provide anything but the most basic public services. We would no longer be a great power (or even a mediocre one), and the social safety net would evaporate," tax policy expert and Syracuse University professor Len Burman wrote in a recent op-ed cheerfully titled "Catastrophic Budget Failure."

That's why acting sooner rather than later makes sense. But acting too soon could cause its own set of problems since the economy is only beginning to lick its wounds from a punishing recession.

Economists and tax experts, no matter their ideological position, agree raising taxes when the economy is down is self-defeating.

But as the economy finds a solid footing, the hard choices will have to be made.

"We need to do this in stages at the right time," said David Walker, former U.S. comptroller general, in a video.

Right now there is a lot of talk, but not a lot of planning, about how to address the situation.

In fact, President Obama is pledging to keep taxes low for most people.

For example, Obama has proposed keeping in place the 2001 and 2003 tax cuts for families making less than $250,000 (under $200,000 for individuals). The cuts are scheduled to expire in 2011.

A number of temporary tax relief measures, including the patch to protect the middle class from the Alternative Minimum Tax, are set to expire even sooner. And Obama has said he would like to keep many of those measures in place as well.

Experts say that's not going to cut it.

"Taxes are going up and they're going up for a lot more people than those making more than $250,000. Why? Math. The numbers don't come close to working," Walker said.

For instance, the president's proposal to raise taxes only on high-income families would raise an additional $600 billion over 10 years, said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center.

That's not a lot when the government is staring at a 10-year deficit of $9 trillion. A 10-year deficit of that magnitude means the debt held by the public -- the accumulation of all annual deficits over the decades -- would reach 82% of gross domestic product come 2019. That's double the 41% recorded in 2008.

When lawmakers do decide to act, they will need to do more than just tinker with tax rates, according to Williams.

Tax experts have been calling for fundamental tax reform to make the system less complex. Plus, Williams said, Congress will likely need to seek out a new source of revenue beyond the income tax. One idea that has been talked about increasingly is a value-added tax, which is a tax on goods and services at every stage of production up to the point of sale.

A multi-pronged approach may work best because "no piece by itself is enough," Williams said. "There's a really big hole to fill and [lawmakers] are just talking about dollops."



Parasitic infections and other diseases usually associated with the developing world are cropping up with alarming frequency among U.S. poor, especially in states along the U.S.-Mexico border, the rural South and in Appalachia, according to researchers.

Government and private researchers are just beginning to assess the toll of the infections, which are a significant cause of heart disease, seizures and congenital birth defects among black and Hispanic populations.

These exotic diseases will be very expense to treat in the US under the new proposed plan to cover everyone.

Click on the image to see diseases associated with developing countries that are becoming common in the U.S.

One obstacle is that the diseases, long thought to be an overseas problem, are only briefly discussed in most U.S. medical school classes and textbooks, so many physicians don't recognize them.

Some of the infections are transmitted by bug bites and some by animal feces contaminated with parasite larvae; still others are viral. All spread in conditions of overcrowding, malnutrition, poor sanitation and close contact with animals receiving little veterinary care.

"These are diseases that we know are ten-fold more important than swine flu," said Peter Hotez, a microbiologist at George Washington University and leading researcher in this field. "They're on no one's radar."

The insect-borne diseases -- among them, Chagas and dengue fever -- thrive in shanty towns along the Mexican border, where many homes have no window screens and where poor drainage allows standing puddles for bugs to breed. Outbreaks of a bacterial infection transmitted in rat urine have cropped up among the urban poor in Baltimore and Detroit.

Health Blog: Rockefeller Versus a Parasite

Such parasites as toxocara -- shed in animal feces -- thrive in the soil and sandpits where poor children often play. There are an estimated 10,000 toxocara infections a year in the U.S. Symptoms include wheezing, fever and retinal scarring severe enough to blind.

These diseases share a common thread. "People who live in the suburbs are at very low risk," Dr. Hotez said. But for the 37 million people in the U.S. who live below the poverty line, he said, "There is real suffering."

Consider cysticercosis, caused by ingestion of tapeworm larvae. Medical journals estimate 3,500 new cases a year in the U.S., mostly among Latin American immigrants. The larvae spread through the bloodstream and can damage the heart, lungs and brain.

Several times a year, pregnant women complaining of seizures come into Jeanne Sheffield's obstetrics practice at Parkland Health & Hospital System in Dallas, which serves a mostly poor, Hispanic population. Dr. Sheffield orders MRIs and often finds lesions in the brain, a telltale sign of this parasitic infection.

View Full Image
Unpaved streets of Las Lomas in Starr County, Texas
Getty Images

The unpaved streets of Las Lomas in Starr County, Texas, pictured last year. Few of its residents have full health or dental insurance.
Unpaved streets of Las Lomas in Starr County, Texas
Unpaved streets of Las Lomas in Starr County, Texas

In recent years, as the immigrant population has spread, Dr. Sheffield said, cysticercosis has cropped up in states that have never had to deal with it before, including Iowa, Missouri, Ohio and Oregon. Treatment is available but complex; patients must remain on anti-seizure medicine for years.

Chagas disease, another troubling infection, begins with the innocent-sounding "kissing bug," an insect endemic in parts of Latin America and also found in across the American South, especially Texas.

The bugs are often infected with a tiny protozoan parasite, which they excrete after snacking on human or animal blood. When a bite victim scratches, he may accidentally rub the parasite into his open wound -- and an infection takes hold. Chagas spreads more easily in poor rural communities where homes without window screens get infested.

Many of those ill with Chagas are immigrants or travelers who became infected elsewhere; as many as half develop complications such as cardiac inflammation that can cause heart failure.

Most blood banks in the U.S. began screening for Chagas in the past two years, as concern about the disease mounted. Hundreds of cases have been detected, with especially high rates among Hispanics in Florida and California.

Nationally, one in 30,000 potential blood donors tests positive -- yet many don't seek treatment even after they are told they have Chagas, said Susan Stramer, executive scientific officer of the American Red Cross. Many are immigrants who don't want to draw attention: "They're afraid of the consequences of finding out they're infected in the U.S," she said.

One of the few Chagas clinics in the nation is run by Sheba Meymandi, a physician at Olive View-UCLA Medical Center in Los Angeles.

Dr. Meymandi hits the road one weekend a month with a car full of PVC piping and lengths of cloth, which she uses to transform church sanctuaries into makeshift clinics with curtained exam rooms. At each stop, she tries to persuade Latinos to be tested.

It is a hard sell. Those who feel fine see no need to be tested for what sounds like an exotic disease. And those who have heard about Chagas have also heard that the treatment is exceptionally grueling -- three daily doses of a drug that can cause insomnia, nausea, memory loss and a possible lack of sensation in the limbs. The cure rate is about 70%.

Dr. Meymandi presses on, spurred by the reports that regularly cross her desk, such as the recent case of a 38-year-old gardener who dropped dead, his heart ruined by the parasite. "This is no longer an exotic disease," Dr. Meymandi. "It's prevalent."

Public-health experts say the first step in fighting the infections is to learn more about them. "We understand the basic biology," said Mark Eberhard, who directs the parasitic-diseases division at the Centers for Disease Control and Prevention. "But we don't understand that much about the burden of these diseases."

Hoping to raise awareness -- and money for research -- the CDC is teaming with private foundations to organize a national summit this fall for doctors, nurses, community activists and politicians.

Health-care legislation pending in the House calls for a full report to Congress about the threat from this cluster of diseases, termed "neglected infections of poverty," as their consequences threaten to increase U.S. health-care costs.


Internet companies and civil liberties groups were alarmed this spring when a U.S. Senate bill proposed handing the White House the power to disconnect private-sector computers from the Internet.

Another power grab by the mighty government. I do not remember authorizing the new administration to totally control my life?

They're not much happier about a revised version that aides to Sen. Jay Rockefeller, a West Virginia Democrat, have spent months drafting behind closed doors. CNET News has obtained a copy of the 55-page draft of S.773 (excerpt), which still appears to permit the president to seize temporary control of private-sector networks during a so-called cybersecurity emergency.

The new version would allow the president to "declare a cybersecurity emergency" relating to "non-governmental" computer networks and do what's necessary to respond to the threat. Other sections of the proposal include a federal certification program for "cybersecurity professionals," and a requirement that certain computer systems and networks in the private sector be managed by people who have been awarded that license.

"I think the redraft, while improved, remains troubling due to its vagueness," said Larry Clinton, president of the Internet Security Alliance, which counts representatives of Verizon, Verisign, Nortel, and Carnegie Mellon University on its board. "It is unclear what authority Sen. Rockefeller thinks is necessary over the private sector. Unless this is clarified, we cannot properly analyze, let alone support the bill."

Representatives of other large Internet and telecommunications companies expressed concerns about the bill in a teleconference with Rockefeller's aides this week, but were not immediately available for interviews on Thursday.

A spokesman for Rockefeller also declined to comment on the record Thursday, saying that many people were unavailable because of the summer recess. A Senate source familiar with the bill compared the president's power to take control of portions of the Internet to what President Bush did when grounding all aircraft on Sept. 11, 2001. The source said that one primary concern was the electrical grid, and what would happen if it were attacked from a broadband connection.

When Rockefeller, the chairman of the Senate Commerce committee, and Olympia Snowe (R-Maine) introduced the original bill in April, they claimed it was vital to protect national cybersecurity. "We must protect our critical infrastructure at all costs--from our water to our electricity, to banking, traffic lights and electronic health records," Rockefeller said.

The Rockefeller proposal plays out against a broader concern in Washington, D.C., about the government's role in cybersecurity. In May, President Obama acknowledged that the government is "not as prepared" as it should be to respond to disruptions and announced that a new cybersecurity coordinator position would be created inside the White House staff. Three months later, that post remains empty, one top cybersecurity aide has quit, and some wags have begun to wonder why a government that receives failing marks on cybersecurity should be trusted to instruct the private sector what to do.

Rockefeller's revised legislation seeks to reshuffle the way the federal government addresses the topic. It requires a "cybersecurity workforce plan" from every federal agency, a "dashboard" pilot project, measurements of hiring effectiveness, and the implementation of a "comprehensive national cybersecurity strategy" in six months--even though its mandatory legal review will take a year to complete.

The privacy implications of sweeping changes implemented before the legal review is finished worry Lee Tien, a senior staff attorney with the Electronic Frontier Foundation in San Francisco. "As soon as you're saying that the federal government is going to be exercising this kind of power over private networks, it's going to be a really big issue," he says.

Probably the most controversial language begins in Section 201, which permits the president to "direct the national response to the cyber threat" if necessary for "the national defense and security." The White House is supposed to engage in "periodic mapping" of private networks deemed to be critical, and those companies "shall share" requested information with the federal government. ("Cyber" is defined as anything having to do with the Internet, telecommunications, computers, or computer networks.)

"The language has changed but it doesn't contain any real additional limits," EFF's Tien says. "It simply switches the more direct and obvious language they had originally to the more ambiguous (version)...The designation of what is a critical infrastructure system or network as far as I can tell has no specific process. There's no provision for any administrative process or review. That's where the problems seem to start. And then you have the amorphous powers that go along with it."

Translation: If your company is deemed "critical," a new set of regulations kick in involving who you can hire, what information you must disclose, and when the government would exercise control over your computers or network.

The Internet Security Alliance's Clinton adds that his group is "supportive of increased federal involvement to enhance cyber security, but we believe that the wrong approach, as embodied in this bill as introduced, will be counterproductive both from an national economic and national secuity perspective."
By Declan McCullagh, a correspondent for who writes a daily feature called Taking Liberties focused on individual and economic rights.


Two facts that should give pause for thought.

1) Japanese data released showed that exports fell yet again. They are down 39.5% to the US, and 26.5% to China.

Japan is the world’s second biggest economy. It lives on exports. It is also a key part of the supply chain for the Chinese economy. How can this hard data be reconciled with the extreme V-shaped recovery already priced in by the markets?

By the way, Toyota is suspending a key production line at its Takaoka plant in central Japan. It is cutting global capacity by 1m vehicles.

2) The Baltic Dry Index measuring freight rates for bulk goods and commodities has been falling almost continuously for eleven weeks, dropping from 4,290 to 2,778 on Thursday.

The prices are so bad that often the shippers just leave the container in the USA, shipping it one way!

Is this just a glut of ships or is this telling us what the Shanghai market is also telling us, that credit tightening by the Chinese government is pulling the rug from underneath the latest commodity bubble?

There is something wrong with the entire recovery tale, which ignores the fact that excess plant is still at the highest level since the Great Depression (capacity use is 70pc in Europe, 68pc in the US, 65pc in Japan, and as low as 50pc in some countries, according to the World Bank’s Justin Lin). Companies will have to cut jobs and investment.

Soaring “confidence” indicators have decoupled from reality. The world economy is still prostrate. GDP has shrunk 4pc, 6pc, 8pc, even 12pc or more in a large group of countries. There it more or less sits, like a deflated soufflĂ©.

An end to technical recession in France, Germany, and Japan because Q2 ( and undoubtedly Q3 to come) ekes out a rise from a collapsed base does not mean anything – except that zero interest rates worldwide, and a massive fiscal stimulus that is pushing public debts towards 100pc across the OECD states (and cannot easily be repeated once the first sugar rush subsides), has mercifully prevented the Great Contraction from turning into an immediate catastrophe.

As the Bank of England’s Governor Mervyn King puts it: “It’s the level, stupid”. The level of economic activity is years away from full recovery.

The Bundesbank’s Axel Weber says it will take until 2013 for Germany to get back to where it was. He also warns, by the way, that there will be a second wave of the credit crisis as Germany’s home-grown troubles come to the fore. Round one was imported havoc from the US: round two will be rising defaults at home and a credit squeeze as ratings downgrades force banks to set aside fresh capital.

So do not be guided by delusional economists predicting rosy days ahead, as the real facts behind all this indicate the opposite.


A $9 trillion federal deficit over 10 years may be too hard to comprehend. But this part is easy: Such unwieldy amounts of debt could have an impact on Americans' bottom line one way or the other -- if not tomorrow, then the day after.

The U.S. government has been spending a great deal more than it has been taking in, and it is on track to do so well beyond the next 10 years. It has been borrowing money to make all that spending possible and it has to pay the money back with interest. How, you ask? By borrowing more.

The solution is straightforward if unpleasant: Shy of finding a fairy willing to leave trillions under Uncle Sam's pillow, lawmakers will have to raise taxes and cut spending.

Have you ever heard of government cutting spending?

The more the country lives on a credit card, the more it makes itself beholden to the demands of its creditors -- many of which are overseas. The danger is that buyers of U.S. debt could become concerned that the country is running too high a balance. If so, they will demand higher interest rates -- thereby making the country's debt problem worse -- or they'll put their money elsewhere.

At that point, things would get ugly.

"Taxes would rise to levels that would make a Scandinavian revolt. And the government would not be able to provide anything but the most basic public services. We would no longer be a great power (or even a mediocre one), and the social safety net would evaporate," tax policy expert and Syracuse University professor Len Burman wrote in a recent op-ed cheerfully titled "Catastrophic Budget Failure."

That's why acting sooner rather than later makes sense. But acting too soon could cause its own set of problems since the economy is only beginning to lick its wounds from a punishing recession.

Economists and tax experts, no matter their ideological position, agree raising taxes when the economy is down is self-defeating. This was tampered by the government promising to only tax "rich people"...right, only the rich!

But as the economy finds a solid footing, the hard choices will have to be made.

"We need to do this in stages at the right time," said David Walker, former U.S. comptroller general, in a video.

Right now there is a lot of talk, but not a lot of planning, about how to address the situation. Correction, nothing is being done to address the situation.

In fact, President Obama is pledging to keep taxes low for most people. So how does that work, continue low taxes but higher and higher government spending?

For example, Obama has proposed keeping in place the 2001 and 2003 tax cuts for families making less than $250,000 (under $200,000 for individuals). The cuts are scheduled to expire in 2011.

A number of temporary tax relief measures, including the patch to protect the middle class from the Alternative Minimum Tax, are set to expire even sooner. And Obama has said he would like to keep many of those measures in place as well. Originally he was going to repeal all these measures.

Experts say that's not going to cut it.

"Taxes are going up and they're going up for a lot more people than those making more than $250,000. Why? Math. The numbers don't come close to working," Walker said.

For instance, the president's proposal to raise taxes only on high-income families would raise an additional $600 billion over 10 years, said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center.

That's not a lot when the government is staring at a 10-year deficit of $9 trillion.

From a math number again, if the annual deficits are $1.5 trillion, a 10 year deficit is $15 trillion, not $9 trillion! WORSE THAN CAN BE (82%) IMAGINED, SINCE IT WOULD BE BIGGER THAN THE ECONOMIES OF ANY COUNTRY AND ALMOST EQUAL TO THE ECONOMY OF THE USA.

A 10-year deficit of that magnitude means the debt held by the public -- the accumulation of all annual deficits over the decades -- would reach 82% of gross domestic product come 2019. That's double the 41% recorded in 2008.

When lawmakers do decide to act, they will need to do more than just tinker with tax rates, according to Williams.

Tax experts have been calling for fundamental tax reform to make the system less complex. Plus, Williams said, Congress will likely need to seek out a new source of revenue beyond the income tax. One idea that has been talked about increasingly is a value-added tax, which is a tax on goods and services at every stage of production up to the point of sale.

Those are crazy ideas but realistic to be considered, and of course ideas that will never, ever be considered by lawmakers in a realistic environment.

For instance, how long can you only be adding taxes to every conceivable theng before it gets to 100%?

Think about it....the taxes that exist now are enormous and are taxes and excise taxes of every type we may not even be thinking about.

For instance, beyond the state and federal income taxes and social security and medicare taxes and the local and federal unemployment taxes that only your employer pays, there are taxes on your home, sales taxes, license taxes, phone bill taxes, utility bill taxes, automobile license taxes,taxes on behalf of every conceivable government entity locally and hundreds of use taxes of every kind depending on what you are 'using" such as fishing or hunting or visiting a park.

A multi-pronged approach ( that means many different ways to tax) may work best because "no piece by itself is enough," Williams said. "There's a really big hole to fill and lawmakers are just talking about dollops."

So be prepared, at some point, the various states will start to collapse on their own weight burden of taxation and spending. California has led the way, with Illinois and others slowly falling like dominoes as they are unable to cover their deficits without increasing taxes, rather than decreasing their expenses.

As they collapse, you are going to be the only one holding up the "collapsing bridge" on your back. Note that people have started migrating away from the high tax states like New York into low tax localities, and that trend is likely to continue.


It always amazes me how the government wants us to believe their figures on statistical information such as unemployment data, yet there is no government program that we can ever say is run well or accurate.

The only numbers that are counted relate to actual people filing claims for unemployment insurance payments! But, how many do not file for various reasons including the stigma of filing? Lot's do not.

In actuality about 16 million "working" people are not working or are seriously underemployed in the USA. This means that they do not spend as much at stores, restaurants, or with shops and boutiques which depend on their spending to keep them in business.

It's hard to predict that there is any tangible reason for unemployment to magically decrease, and nothing is being done in any meaningful way by ANY government-state or federal to help the businesses which will drive the economy.

For instance, a liquor store owner just told me that a new excise tax on the alcohol content of wines and spirits will add as much as 30% or possibly more to the retail price of a bottle of wine or spirits at the lowest price point! They have resorted to posting large signs in their store to inform the consumer that they are not responsible for raising the is the new tax at the distributor level!

However, the government wants to hide that fact so by taxing at the distributor level, the retail price is simply higher, leaving the consumer to believe that it is those greedy retailers raising the price. Additionally, as the item is rung up at the cash register, the initial higher shelf price, the price with the hidden tax on it, is ow taxed at a higher amount as well.

This amounts to a tax on a tax!

Back to unemployment, it should be noted that it is a bad idea to add a tax on liquor when unemployment is very high, don't you agree?

The real US unemployment rate is 16 percent if persons who have dropped out of the labor pool and those working less than they would like are counted, a Federal Reserve official said Wednesday.

"If one considers the people who would like a job but have stopped looking -- so-called discouraged workers -- and those who are working fewer hours than they want, the unemployment rate would move from the official 9.4 percent to 16 percent, said Atlanta Fed chief Dennis Lockhart.

Watch for this guy's term expiring without being re-appointed!

He underscored that he was expressing his own views, which did "do not necessarily reflect those of my colleagues on the Federal Open Market Committee," the policy-setting body of the central bank.

Lockhart pointed out in a speech to a chamber of commerce in Chattanooga, Tennessee that those two categories of people are not taken into account in the Labor Department's monthly report on the unemployment rate. The official July jobless rate was 9.4 percent.

Lockhart, who heads the Atlanta, Georgia, division of the Fed, is the first central bank official to acknowledge the depth of unemployment amid the worst US recession since the Great Depression.

Lockhart said the US economy was improving ( he has got to be nuts to make this statement since his area has lost the most manufacturing jobs) but "still fragile," and the beginning stages of a sluggish recovery were underway.

"My forecast for a slow recovery implies a protracted period of high unemployment," he said, adding that it would be difficult to stimulate jobs through additional public spending.

You could not be more wrong Mr. Lockhart. Public spending does not create jobs, it sucks the money out of those who earn it and redistributes it! How do people like him have these positions when they do not understand basic economics?

The government never creates jobs, it destroys jobs! It taxes businesses and successful individuals and either takes their money directly or indirectly and then redistributes it or simply wastes it.

President Barack Obama's administration has resisted calls for more public spending, arguing that the 787-billion-dollar stimulus passed in February needs time to work its way through the economy.

Please explain to me how re-paving a road someplace on a rural highway (as most recently documented in various TV programs is going to help employ a person in the low income section of Detroit?

Lockhart noted that construction and manufacturing had been particularly hard hit in the recession that began in December 2007 and predicted some jobs were gone for good. No kidding...these are not jobs which "come back" either. When a business closes, it closes for good. Closed businesses do not reopen, especially manufacturing businesses in competitive industries.

Prior to the recession, he said, construction and manufacturing combined accounted for slightly more than 15 percent of employment. But during the recession, their job losses made up more than 40 percent of all US job losses.

"In my view, it is unlikely that we will see a return of jobs lost in certain sectors, such as manufacturing," he said.

He is so correct!

"In a similar vein, the recession has been so deep in construction that a reallocation of workers is likely to happen -- even if not permanent."

"Reallocation" of workers means that a well paid painter has to find a job as a WAL-MART or HOME DEPOT paint department clerk for instance, since his job is gone due to a lack of demand for his services. That demand may not come back before he is permanentley displaced from that prior occupation.

Payroll employment has fallen by 6.7 million since the recession began. That also does not take into account those people who are NOT reported and those counted amoung the 20 million illegals in this country who may now work less or be paid less and are NEVER counted.


The federal government faces exploding deficits and mounting debt over the next decade, White House officials predicted Tuesday in a fiscal assessment far bleaker than what the Obama administration had estimated just a few months ago.

Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy.


Obama economic adviser Christina Romer predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010.

"This recession was simply worse than the information that we and other forecasters had back in last fall and early this winter," Romer said.


Those are NOT policies that will help the economy.

The grim administration projections came on a day of competing economic news. The Congressional Budget Office, which has predicted less economic growth than the White House in the past, was also scheduled to announce revised budget projections on Tuesday.

The deeper red ink and the gloomy unemployment forecast present President Barack Obama with an enormous challenge. The new numbers come as he prods Congress to enact a major overhaul of the health care system — one that could cost $1 trillion or more over 10 years. Obama has said he doesn't want the measure to add to the deficit (oh this must be a magical measure, created by Merlin the magician), but lawmakers have been unable to agree on revenues (called TAXES or MEDICARE CUTS) that cover the cost.

What's more, the high unemployment could ( what do you mean could last?)last well into the congressional election campaign next year, turning the contests into a referendum on Obama's economic policies.

"The alarm bells on our nation's fiscal condition have now become a siren," Senate Minority Leader Mitch McConnell, R-Ky., said. "If anyone had any doubts that this burden on future generations is unsustainable, they're gone — spending, borrowing and debt are out of control." Yes Mitch where were you when the defits were adding to the debt burden when YOU were in charge?

The revised estimates project that the economy will contract by 2.8 percent this year, more than twice what the White House predicted earlier this year. Romer projected that the economy would expand in 2010 ( and how ill it do that when taxes and added health care costs and fees on every industry will rise?), but by 2 percent instead of the 3.2 percent growth the White House predicted in May. By 2011, Romer estimated, the economy would be humming at 3.6 percent growth.

You got to be kidding. Where can I place a bet on this NOT happening?

Both Romer and budget director Peter Orszag said this year's contraction would have been far worse without money from the $787 billion economic stimulus package that Obama pushed through Congress as one of his first major acts as president.

At the same time, the continuing stresses on the economy have, in effect, increased the size of the stimulus package because the government will have to spend more in unemployment insurance and food stamps, Orszag said. He said the cost of the stimulus package — which spends most of its money in fiscal year 2010 — will grow by tens of billions of dollars above the original $787 billion.

For now, while the country tries to come out of a recession, neither spending cuts nor broad tax increases would be prudent deficit-fighting measures. But Obama is likely to face those choices once the economy shows signs of a steady recovery, and it could test his vow to only raise taxes on individuals making more than $200,000.

That's right, raise the taxes on the people who employ other move to stimulate them hiring other people.

Still, 10-year budget projections can be "wildly inaccurate," (really, I though government figures were always accurate?) said Stan Collender, a partner at Qorvis Communications and a former congressional budget official. Collender notes that there will be five congressional elections over the next 10 years and any number of foreign and domestic challenges that will make actual deficit figures very different from the estimates.

The Obama administration did tout one number in its budget review: The 2009 deficit was expected to be $1.58 trillion, $263 billion less than projected in May. That's largely because the White House removed a $250 billion item that it had inserted as a "place holder" in case banks needed another bailout. WOW, THANK YOU.

Orszag, anticipating backlash over the deficit numbers, conceded that the long-term deficits are "higher than desirable." The annual negative balances amount to about 4 percent of the gross domestic product, a number that many economists say is unsustainable (DOES ANYBODY IN WASHINGTON KNOW THAT WORD?)

These policies tend to destroy the value of the dollar in global markets and domestically; one will be able to buy less goods and services due to the weakened dollar. The government however profits substantially, as it can pay back its debt with weaker dollars while we all suffer the consequences of the government excesses.

Worse things will also happen.

The government has to borrow the needed funds to fund these deficits, foreign countries who now buy our US TREASURY and other government securities will see no reason to buy them as their value will be dubious. RESULT: COLLAPSE OF THE DOLLAR.

There will simply not be enough willing buyers for the debt that will be sold, or in the alternative, in order to sell the debt, the government will have to pay inflated interest rates to make up for the inflation value loss.

If government is sucking up all the available dollars to borrow, how will business borrow money? You guessed it, only at higher and higher rates way above the government borrowing costs.

Now explain to me again how all this will stimulate the economy and create (or save!) jobs?


Car dealers sold some cars, with government estimates at 700,000 vehicles, but applications processed at 150, how many were sold?

The people buying the cars who used the incentive program had to allow their cars to be junked...the junk yards (excuse me the scrap dealers), will sell parts, but auto parts shops will not, poor people can not buy a used car and charities will not get the car donations.

So what was the point?

I can not understand the point of taking my tax money, or having the government borrow money on my behalf and give it to a car dealer. What did that accomplish?

Buyers who financed their vehicles will be paying a monthly payment for years and thus taking the cash out of other purchase possibilities.

Just another failed government program wasting my money and a burden for future generations to pay off.


Imagine if you had to buy your supermarket items from one or two markets, the really big ones. Everyone else only had a store that sold apples or just bananas.

Well that is what we have now in health care thanks to our, you guessed it, government regulations!

No health insurer can compete selling its policies across state lines. so what happens is that a large insurer can dominate a state and not really allow competition to come in. Competitors are not going to start up a company with one or two or three policyholders!

Do you see? No competition dares to start, since it can not start from scratch with several policies and offer coverages.

If the companies can operate across state lines, the risk is immediately transferred across all its policies and the companies would instantly compete and rates would drop like a rock!

Simple, and no need for government help as rates would become more affordable due to competition!

Does nobody in Washington see that?

Study: Health Insurance Sales Across State Lines Would Reduce Uninsured
By Whitney Blair Wyckoff,

A study evaluating different scenarios that would allow people to purchase health insurance across state lines found that 12 million previously uninsured people would be able to get insurance if there were competition between states.

The study was presented during an American Enterprise Institute panel discussion on interstate competition for individual insurance as a way to increase access to the uninsured.

In the study, Stephen Parente and Roger Feldman, both health economists with the University of Minnesota, researched whether competition existed only within the five largest states, in all 50 states or within four geographic regions. They used data from the 2005 Medical Expenditure Panel Survey to assign people to states based on race, gender, income and age. They then ran simulations to figure out which scenario would provide the most coverage for individuals.

Because Alabama has the least number of regulations, consumers would decide to switch their policies to companies in Alabama, they said. However, they also said that competition among the states in the four regions would allow more than 11 million people to be insured, and it might be easier for populations to swallow if they know the insurance company they are using is closer to home.

State-specific mandates for programs like community rating or guaranteed issue can cause insurance premiums to increase drastically, they said.

Karen L. Pollitz, project director for the Georgetown University Institute for Health Care Research and Policy, said the study’s numbers are misleading. Just because more people would be carrying insurance cards in their pockets wouldn’t mean that they have adequate insurance, she said.

“It’s like saying a roller skate is cheaper than a car,” Pollitz said. “Good health insurance that will take care of you when you’re sick is expensive because health care is expensive.”

She added, “The regulations require that the insurance be meaningful.”

While Aparna Mathur, a research fellow at AEI, commended the pair for starting a discussion in an area where there is little literature, she questioned some of their methodology. In particular, important variables like health status, tobacco use and occupation weren’t factored into the demographic distributions, Mathur said during the July 31 session at AEI.

She also questioned whether high-risk people would be able to purchase cheaper policies in states without community rating or guaranteed issue laws. And Mathur said the information used to determined estimates of how much state regulations impact premiums of the study was not comparable.

Jay Webber, a Republican in the New Jersey state legislature, said because his state has one of the highest numbers of insurance mandates in the country, it is also one of the most expensive states in which to obtain insurance.

“We’re seeing a real affordability crisis in New Jersey,” Webber said, adding that the uninsurance rate is skyrocketing.

He said the state is getting “crunched,” and more businesses every year stop providing their employees with insurance because of the high costs.

“I think New Jersey could be a real battle ground for the issue of health care choice,” Webber said.

• Study Summary
Source: CQ HealthBeat News


Yipee, the recession is over...said various government future forecasters...except that the facts are not so, are they?

More than 30,000 businesses filed for bankruptcy protection in the first half of 2009, a 64 percent increase from the same period a year earlier.

The number of Chapter 11 business reorganizations increased by 113 percent, to 7,396, and Chapter 7 business liquidations jumped by 57 percent, to 20,375, according to the American Bankruptcy Institute.

It is unclear how many business owners were among the 681,217 Americans who filed personal bankruptcies in the first six months of 2009.

“The increase in filings through the first half of this year is a product of continued financial stresses weighing on both consumers and businesses,” said ABI Executive Director Samuel Gerdano. “In this challenging economic environment, we expect bankruptcies to surge past 1.4 million by year end.”

A total of 381,073 bankruptcy cases were filed in the quarter ended June 30 — the highest quarterly number since 2005, when filings surged in the weeks before tougher bankruptcy laws went into effect.

So has the recession ended, are these positive signs? NO.


By Leila Fadel | McClatchy Newspapers

"Part of the change in attitudes that I want to see here in Washington and all across the country is a belief that it is not acceptable for children and families to be without a roof over their heads in a country as wealthy as ours." — President Barack Obama, March 24.

WASHINGTON — At 6 a.m., a block from the manicured lawns of the White House, Poppy Cali starts his days.

The 36-year-old Navy veteran wakes up just after dawn, before the park security can find him sleeping on the steps of the General Services Administration building near the grate that he uses to warm himself in the winter.

He carries two bags, a yellow suitcase and a small black rolling carry-on. In the yellow bag are his shoes; in the other are his clean clothes, underwear, socks, chef jackets and a tie for job interviews. Around his arm is a leather strap with two keys to a safe deposit box where he stores his IDs. His real name he keeps to himself; in the streets he goes only by Poppy.

"If you lose your ID, it's a wrap," he said. "You're lost forever."

For a year, he's slept near Rawlins Park on 18th and E streets Northwest in the shadows of the most powerful people in America.

While Secretary of State Hillary Clinton, Vice President Joe Biden and President Barack Obama drive by in their motorcades toward the White House on the left and the State Department to the right, he searches for a full-time job.

"There's a lot of vets out here on the streets," he said. "I've seen men lay right in the middle of the road and people walk by like they're not there. If that was a whale, if that was a dog, wouldn't someone save it?"

The government buildings are like islands in a sea of struggling Americans.

As Washington's policymakers debate health care bills and promise economic recovery, Cali tries to stay afloat, as do thousands of others in the District of Columbia and millions across the country. About $1.5 billion from the $787 billion stimulus package was set aside to go toward preventing homelessness, but most of the money hasn't been distributed yet, advocates for the homeless say.

Some who live in the parks in the capital are mentally ill with no one to care for them. Among them are the conspiracy theorists whose fantasies led them to the streets just beyond the White House.

However, more and more people like Cali — sometimes alone, sometimes with their families — are homeless as they fight to survive a spiraling descent into destitution.

They are the new faces Ken Barnum sees in his office every day. The Department of Veterans Affairs social worker used to work mostly with older veterans who suffered from commonplace mental problems and addictions. Now the newly homeless often grace his door. He sees young mothers with two or three children, young able men and couples who have nowhere else to go.

"We're used to seeing someone in their 40s or 50s who has mental illness or substance abuse problems or both," he said. "Now, because of the change in the economy, we get lots and lots of new homeless. They were working construction, menial retail, warehousing jobs, and they get laid off. At first they can rent a room. From a room they go to a shelter, and someone says, 'Aren't you a vet?' and they come to me."

According to a Washington count of the homeless this year, Cali is one of about 6,200 homeless adults and children on the streets of the District of Columbia, an increase of nearly 7.5 percent since 2007.

The nation's capital has one of the worst chronic homelessness problems in the nation and almost triple the number of homeless per 10,000 people as the national average, according to 2007 statistics from the National Alliance to End Homelessness.

In the past year, family homelessness has increased at least 15 percent in Washington, partly because of the rising cost of living and the economic downturn. Young women with children looking for places to live overwhelm city services.

"Indications are that homelessness is going up," said Nan Roman, the president of the National Alliance to End Homelessness. "Largely it's because of increased unemployment, housing costs and poverty."

Even before the economy collapsed last fall, the battle against homelessness seemed to be flagging.

According to an annual report on homelessness that the Department of Housing and Urban Development released last month, the number of homeless across the country barely changed from 2007 to 2008, but family homelessness and chronic homelessness rose slightly.

That was a change.

"The prior years, the numbers had been going downward. The fact that it flattened out is not promising," Roman said. Indications for this year suggest that homelessness is rising. "It's a little alarming that our progress is reversing so quickly."

At the Virginia Williams Family Resource Center in Northeast Washington, the waiting room is crowded with young women holding their babies, and older moms weary from the search for a place to get out of the heat and rest.

Sometimes they've come from other states for help in the nation's capital. However, resources are decentralized and shelter space is shrinking, advocates say, and the local homeless problem is inflated by people from neighboring Maryland and Virginia.

"Everybody thinks this is the nation's capital and they should be able to come and change their lives," said Omega Butler, the director of the center.

"One lady told me, 'The services are not just for you; the services are for you and all the states.' ... Homelessness is growing on you every day, and you just can't keep up."

Elaine Kargbo is a lab technician, and three years ago she moved her two teenage daughters and her niece to Washington when she got a job with a private clinic. The funding didn't come through for the clinic, though, so she found herself with no job and no money. She stayed with a friend and worked temporary jobs, and then she met a man. They moved in together, but six months ago he tried to touch one of her daughters. She packed up the girls and ran.

Kargbo couldn't qualify for temporary assistance for needy families because she didn't have an address. She asked for subsidized housing but must wait until Sept. 10 for an appointment to apply.

Last week, she went to the resource center for help.

"Who did you call for help when you left the house?" asked Jacqueline Leake, the intake counselor.

"I called some of my friends, but they weren't able to provide accommodations," Kargbo said. "I've been going out on interviews, and I might be getting a job soon."

Kargbo pulled out a small plastic bag and riffled through it before laying out her daughters' birth certificates, her certificate of guardianship for her niece, her ID, her daughter's college acceptance letter and Social Security cards. A friend she'd stayed with at the beginning of her struggles allowed her to list the address on her daughter's application as her own. She allowed it only that one time.

"I begged her," Kargbo said.

Leake photocopied the documents.

"Do you have family in Arizona that could help?" Leake asked.

"Do you know how long and how far and how expensive it is to get there?" Kargbo replied. "It's not an option."

For six months, the family has lived in Kargbo's Chevy Cavalier — two in the front, two in the back — in Southeast Washington, one of the poorest quarters of the city.

At night, Kargbo fears for her girls. Men have approached the car and asked for lewd sex acts. Ann Hawkins, a social worker from the neighborhood, brings Kargbo food, helps her pay to keep her phone on so prospective employers can call and allows Kargbo and her girls to shower at her house.

"Why in Washington, D.C., in the nation's capital, is a woman and her three children in a car?" Hawkins asked. "They refill that 'cash for clunkers' program, no problem. That money should go to her, to the homeless."

Downtown, just across the street from the vast green lawns around the Washington Monument, Poppy Cali packed bottled water on ice in a green cooler. The two dozen bottles were $4; he sells each one to thirsty tourists for a dollar.

On hot summer days you can find Cali, his face shaded by a colorful knit cap, peddling water at 18th and Constitution Northwest. The corner is just across the street from federal property but close enough to the Washington Monument to catch tourist trolleys.

"Cold water, cold water, one dollar!" He yelled as out-of-towners passed by.

"Where you from?" he asked a young boy with his family.

"Somewhere else," the kid answered and walked by.

"Ahhhh! We got a politician on our hands here," he joked.

He scanned the sidewalk across the street. When no police officers are in sight he runs across to federal property and undersells vendors nearby. Hot walking tourists dole out dollar bills, and sometimes he makes as much as $100 by the end of the day.

Today he made only $40. He's given up on job hunting for now. His phone is missing, and he has no home address to put on the applications. He recently relocated to protect a woman who was sleeping under a bridge by herself. She told him she worried about rape. At night he runs across the highway to sleep nearby.

Cali is a trained cook — the Navy taught him how — and he's worked in a series of cafeterias over the past three years, but was laid off in each place because of cutbacks. When he lost his job last summer at a public school in Oxon Hill, Md., his landlord gave him a month to get back on his feet. Unable to secure work, he packed his belongings and took the bus to Washington.

At Franklin, a now-shuttered downtown Washington shelter, he couldn't sleep. Around him people were sneezing, snoring, laughing and talking. Sometimes the shelters are violent. Often they're dirty, and most people prefer to sleep in the streets.

He left and went to a church.

"How'd I get myself into this situation?" he thought. "How do I get out?"

A year later, he's figured out the streets.

He turned his head and scanned the benches of Rawlins Park. Many of the men were engaged in conversation, or absorbed in the newspaper or the free breakfast that was handed out that morning.

"OK, no one's looking," he said, then got up and shoved his bag under the bushes.

He was ready to start his daily hustle.

"You've gotta survive out here," he said. "You gotta have money in your pocket."


As we expected, the government started something and it is NOT working as promised. Nothing new there, everything is working as expected, after all it is being run by the government!

Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They're also worried about getting repaid.

"(The government) needs to move the system forward and they need to start paying these dealers," said Mark Schienberg, the group's president. "This is a cash-dependent business."

The program offers up to $4,500 to shoppers who trade in vehicles getting 18 mpg or less for a more fuel-efficient car or truck. Dealers pay the rebates out of pocket, then must wait to be reimbursed by the government. But administrative snags and heavy paperwork have created a backlog of unpaid claims.

Schienberg said the group's dealers have been repaid for only about 2 percent of the clunkers deals they've made so far.

Many dealers have said they are worried they won't get repaid at all, while others have waited so long to get reimbursed they don't have the cash to fund any more rebates, Schienberg said.

"The program is a great program in the sense that it's creating a lot of floor traffic that a lot of dealers haven't seen in a long time," he said.

"But it's in the hands of this enormous bureaucracy and regulatory agency," he added. "If they don't get out of their own way, this program is going to be a huge failure."

The program is administered by the Department of Transportation. Transportation Secretary Ray LaHood said Wednesday that dealers will be repaid for the clunkers deals they have completed.

"I know dealers are frustrated. They're going to get their money," LaHood told reporters. He said the Obama administration would soon announce how much longer the $3 billion car incentive program will last.

Through early Wednesday, auto dealers have made clunkers deals worth $1.81 billion, resulting in 435,102 new car sales, according to the DOT.

And how has this so far helped the economy, really?


What are the union leaders thinking or smoking by supporting mandates that will lay off or fire their members? Are they stupid or what?

Private sector unions need to demand that the government help their EMPLOYERS TO HIRE MORE PEOPLE, NOT CAUSE MANDATES TO FIRE THEM!

The government wants to create GREEN JOBS, good paying GREEN jobs!

What is a green job? How does a union member now working in a coal mine get one?

What does a utility worker have to do to get a green job?

At present each of these workers will first LOSE his job! The government wants to destroy their jobs!

Where are the loud screams to help the union workers to be safe in their jobs by asking the government to help their employers not kill their employers?

Are the union leaders so stupid as to not understand that they need to be on the side of the employers and not on the side of the destructors of union jobs?


When you go to your local apparel store and buy a pair of jeans polo shirt, you do not realize that it was probably part of a very intricate and vital financing circle provided by CIT or CIT FACTORING, which finances about 60% of the apparel industry.

A manufacturer of jeans who receives an order from an apparel retailer, borrows money to make the jeans from CIT, and then when the jeans are shipped to the retailer that manufacturer sells the invoice to CIT which advances some more money against the credit of the retailer providing needed cash flow to the manufacturer.

When CIT says NO, the retailer does not get the merchandise and the manufacturer loses the sale.

Do you see how important CIT is to this circle of financing?

If CIT fails, there could be total chaos in the market.

Commercial lender CIT Group Inc. said Monday in a regulatory filing it lost $1.68 billion in the second quarter, and again warned it might have to file for bankruptcy protection if it fails to restructure its business.

Losses mounted in the quarter as the embattled New York-based lender as borrowing costs exceeded income from lending to customers, and as it set aside more money to protect against future loan losses.

CIT lost $4.30 per share during the quarter ended June 30. During the same quarter last year, CIT lost $2.08 billion, or $7.88 per share, due to a $2.55 billion charge from discontinued operations.

CIT's loss from continuing operations during the most recent quarter totaled $1.62 billion, compared with earnings from continuing operations during the year-ago period of $47.9 million.

Analysts polled by Thomson Reuters, on average, forecast a loss of $1.95 per share for the latest quarter.

In its quarterly report to the Securities and Exchange Commission, CIT said there is still "substantial doubt" about its ability to continue operating.

Just last month, CIT was bailed out with a $3 billion loan from some of its largest bondholders as it faced a cash crunch. It also launched an offer to repurchase $1 billion in outstanding debt that was successfully completed Monday, helping to stave off a potential bankruptcy filing.

Despite the completion of the tender offer, CIT is still facing some challenges. It could continue to struggle with liquidity issues as more debt is due to mature next year.

CIT Group, one of the nation's largest lenders to small and midsize businesses, has been devastated by the downturn in the credit markets and is attempting to restructure its operations to remain in business. CIT used to rely heavily on cheap, short-term debt to fund its operations -- a type of funding that essentially evaporated during the peak of the credit crisis last year.

With weak credit markets and concerns about its survival, CIT's borrowing costs have begun to outpace the money it generates from lending to customers. CIT recorded a negative net interest revenue of $19.1 million during the second quarter, compared with positive revenue of $169.8 million during the year-ago period.

Furthermore, as the economy remains in a recession, more of CIT's customers are falling behind on repaying loans. That has forced CIT to set aside more cash to cover those losses, a problem nearly all lenders have had during the recession. CIT set aside $588.5 million for credit losses during the second quarter, compared with $152.2 million during the same quarter last year.

Some experts fear that if CIT collapses it would deal a crippling blow to an economy still bleeding hundreds of thousands of jobs a month despite a nearly $800 billion federal stimulus program.

The retail sector would be hit especially hard. CIT serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts say 60 percent of the apparel industry depends on CIT for financing.

Last week, CIT reached an agreement with the Federal Reserve Bank of New York that puts the company under the oversight of federal regulators. The agreement requires CIT to submit a plan for how it will maintain sufficient cash. It must also provide budgets through the end of 2010 that include details about how the company will meet current and future capital requirements.

Stock up on your clothing now, before supplies run short at your local apparel store.


Like a lot of their patients, doctors are sick of long waits in the waiting room and dealing with insurance companies.

That's why a growing number of primary care physicians are adopting a direct fee-for-service or "retainer-based" model of care that minimizes acceptance of insurance. Except for lab tests and other special services, your insurance plan is no good with them.

In a retainer practice, doctors charge patients an annual fee ranging from $1,500 to as high as over $10,000 for round-the-clock access to physicians, sometimes including house calls.

Other services included in the membership are annual physicals, preventive care programs and hospital visits.

Doctors argue that this model cuts down their patient load, allows them to spend more time per patient and help save the system money.

However, some industry groups caution that these emerging trends are a consequence of a health care system badly in need of reform.

"I had to change the model": Dr. John Kihm, 51, an internist based in Durham, N.C., converted his solo private practice to a retainer-based model in May.

Until then, his daily schedule was jam-packed. "I was seeing patients every 15 minutes," said Kihm.

He was seeing about 80 patients a week, "many were very sick with multiple systems and complications," he said. "After 20 years, I realized that this was not doable, not sustainable."

His goal is to continue medicine for another 20 years, "but I want to practice it the right way," Kihm said. That means spending more than 15 minutes per patients and doing house calls. "I had to change the model," he said, as he adopted the retainer-based structure.

He now spends 30 minutes on average per patient. He didn't disclose his annual fees but said his fees are "less that what it could cost to smoke a pack of cigarettes a day."

His fees covers annual exams, wellness programs and other types of preventative care typically not covered by insurance. If his patients do have insurance, it would pay for things like lab tests.

"My income is about the same as before, but I have less overhead costs from half as many patients and half the amount of supplies that I need," he said.

Michigan-based family doctor Dr. John Blanchard has been practicing the retainer-based care for eight years. He said his patients have "unfettered" access to him whenever they need him for a fee of between $50 to $150 a month.

The model has enabled Blanchard to "cut down on everything by about 25%," including his patient caseloads and time spent on filing insurance claims.

One industry report cited that processing claims is the second-biggest area of wasteful expenditure in the health care system, costing as much as $210 billion annually.

Prevention better than cure: MDVIP, based in Boca Raton, Fla., is one of the largest organizations of primary care physicians, numbering about 326 nationwide, that practice retainer-based medicine.

"We call it preventive, personalized health care," said Darin Engelhardt, president of MDVIP. "Our premise is if we reconstruct primary care, what would it look like?'"

According to the MDVIP formula, it means limiting its affiliated practices to no more than 600 patients.

For an annual fee of between $1,500 and $1,800, its members receive full health assessment, 24/7 access to their doctor, including via a doctor's cell phone or e-mail and a personal Web page on which they can access their medical records.

MDVIP-affiliated practices do take insurance, including Medicare, for other medical services such as lab tests and sick visits.

Engelhardt said MDVIP has about 110,000 members nationwide, half of whom are over the age of 65.

"This is a variation of the traditional model," he said. "We believe it enhances the physician-doctor relationship as well as reduces costs by stressing prevention."

Although official figures are hard to come by, Engelhardt said MDVIP's research based on Medicare data has shown that in communities with both MDVIP and traditional practices, hospitalization rates dropped by as much as 70% for its members.

He estimates that there are about 3,000 family physicians practicing a form of retainer-based medicine in the United States.

Concerns: The rise in alternative care delivery models indicates the level of frustration, both on the part of doctors seeing too many patients and consumers not getting easy access to doctors, said Dr. Lori Heim, president-elect of the American Academy of Family Physicians (AAFP).

"I am not judging this model. We don't have a policy against it," she said. "But I believe it reflects the underlying problems in the system. The retainer model won't solve all the problems in health care."

Heim said the model works better for physicians who practice in locations where consumers can afford it.

"It won't work in communities where I practice," Heim, of Laurinburg, N.C., said, referring to areas with a high number of uninsured consumers and a middle class that can't afford out-of-pocket membership fees.

At the same time, Heim warned that unless the current health care system changes, the retainer model could become more prevalent.

"If this is the model of care that we evolve into, then there could be fewer doctors for people at a time when we need more doctors," she said.

Alywn Cassil, spokeswoman for the policy research organization Center for Studying Health System Change, said retainer-based care is having a "marginal impact" on the industry so far.

"The vast majority of physicians still have a managed care contract," she said. "Only one in 10 don't."

But she agreed with Heim on one point: "If doctors further reduce their panel size of patients through these models, that will only enhance the shortage of primary care doctors," Cassil said.

What's more, the model creates a "tiered system" of access to care where even for the insured, if you pay more, you get enhanced access.



The Chinese snapping up oil fields from Africa to South America to the Middle East. Soon it may be able to rival the Western giants.
By Steve Hargreaves

China is on an oil buying binge.

Over the past few months, the Chinese government -- or its big government-controlled oil firms -- have closed or floated a slew of deals in countries all over the world. These deals have expanded the nation's oil reach and may one day position the nation to match the skills of western oil firms.

The deals include a $10 billion loan the Chinese government extended to Russia's Rosneft in exchange for a guaranteed cut of that company's production. The Chinese have also gotten in tight with Brazil's Petrobras, arranging a similar deal with the firm that is developing a huge new offshore field - one of the biggest new discoveries in decades.

But it doesn't end with loans. Last week the Wall Street Journal reported that China National Petroleum Corporation is interested in buying all or a part of Argentina's YPF for $14.5 billion, although a deal is far from certain.

In Africa, CNOOC and Sinopec are buying a $1.3 billion stake in offshore Angolan development rights from American oil firm Marathon. Angola has recently overtaken Nigeria as Africa's biggest oil producer, and is one of Exxon Mobil's (XOM, Fortune 500) favorite countries to invest in.

And rumors are swirling that the China National Petroleum Corporation will take the majority stake in Iraq's Rumaila oilfield from BP (BP). Rumaila produces over 1 million barrels a day, and is Iraq's biggest oil field.

It's clear what the Chinese are doing.

"They are stilting on a huge pile of cash and they're using this as a buying opportunity," said Greg Priddy, a global energy analyst at the Eurasia group, a political risk consultancy.

China wants to buy oil for several reasons.

First, they can. Their huge trade surplus means the Chinese have racked up a giant stash of dollars.

But this pile of dollars can be dangerous. Many worry the dollar is set to fall due to rampant American spending.

But China is stuck. It can't sell them too fast for fear of accelerating the dollar's weakness.

So buying hard assets like oil is a great way for China to diversify its holdings, without destabilizing the greenback.

Second, they don't really trust the market.

The Chinese, along with many Asian countries, have less faith in the free market. This distrust was, in Chinese eyes, probably justified a few years back, after they tried to buy U.S. oil company Unocal in an open market deal that collapsed after a public outcry in the United States.

"The Chinese definitely want their own stuff that they can control and send anywhere in the world," said Priddy.

Finally, they see the big picture.

Chinese oil demand is expected to grow nearly 20% in the next six years, and the country already imports over half of the 8 million barrels a day it uses.

"They are doing what you'd expect any country to do: They are procuring resources for the best interest of the people," said Ruchir Kadakia, a global oil analyst with the consultancy Cambridge Energy Research Associates. "I think they watched the developed world dig itself into a deep enough hole to learn a few lessons."

All this buying raises the question: Will the Chinese firms soon be able to rival the Western oil companies?

In many ways they already do.

China National Petroleum Corporation's daily oil production is already roughly equivalent to Exxon's. And PetroChina at one point had a market capitalization twice Exxon's, although the vast majority of shares are owned by the government-run China National Petroleum Corporation so it's hard to arrive at a true market value.

Where the Chinese firms lag is in expertise.

Complex operations - like deep water drilling or liquefying natural gas, are still the domain of the Western oil firms.

But given time, and given their need to develop those deep-water leases off Angola, the Chinese are bound to gain the technical know-how that will put them on-par with the best western firms.

That is really putting the dollars where they will do the most good for them while not selling the greenbacks to destroy their value.

maybe we need a good Chinese economist to help our hapless lawmakers here?


'A man is not a whole and complete man," wrote Walt Whitman, "unless he owns a house and the ground it stands on." America's lesser bards sang of "my old Kentucky Home" and "Home Sweet Home," leading no less than that great critic Herbert Hoover to declaim that their ballads "were not written about tenements or apartments…they never sing about a pile of rent receipts." To own a home is to be American. To rent is to be something less.

Every generation has offered its own version of the claim that owner-occupied homes are the nation's saving grace. During the Cold War, home ownership was moral armor, protecting America from dangerous outside influences. "No man who owns his own house and lot can be a Communist," proclaimed builder William Levitt. With no more reds hiding under the beds, Bill Clinton launched National Homeownership Day in 1995, offering a new rationale about personal responsibility. "You want to reinforce family values in America, encourage two-parent households, get people to stay home?" he said. George W. Bush similarly pledged his commitment to "an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, 'welcome to my house, welcome to my piece of property.'"

Surveys show that Americans buy into our gauzy platitudes about the character-building qualities of home ownership—at least those who still own them. A February Pew survey reported that nine out of 10 homeowners viewed their homes as a "comfort" in their lives. But for millions of Americans at risk of foreclosure, the home has become something else altogether: the source of panic and despair. Those emotions were on full display last week, when an estimated 53,000 people packed the Save the Dream fair at Atlanta's World Congress Center. Its planners, with the support of the Department of Housing and Urban Development, brought together struggling homeowners, housing counselors, and lenders, including industry giants Bank of America and Citigroup, to renegotiate at-risk mortgages. Georgia's housing market has been devastated by the current economic crisis—338,411 homes in the Peachtree state went into foreclosure in May and June alone.

Atlanta represents the current housing crisis in microcosm. Since the second quarter of 2006, housing values across the United States have fallen by one third. Over a million homes were lost to foreclosure nationwide in 2008, as homeowners struggled to meet payments. The number of foreclosures reached an all-time record last month—when owners of one in every 355 houses in the country received default or auction notices or were seized by creditors. The collapse in confidence in securitized, high-risk mortgages has also devastated some of the nation's largest banks and lenders. The home financing giant Fannie Mae alone held an estimated $230 billion in toxic assets. Even if there are signs of hope on the horizon (home prices ticked upward by 0.5% in May and new housing starts rose in June), analysts like Yale's Robert Shiller expect that housing prices will remain level for the next five years. Many economists, like the Wharton School's Joseph Gyourko, are beginning to make the case that public policies should encourage renting, or at least put it on a level playing field with home ownership. A June 2009 survey commissioned by the National Foundation for Credit Counseling, found a deep-seated pessimism about home ownership, suggesting that even if renting doesn't yet have cachet, it's the only choice left for those who have been burned by the housing market. One third of respondents don't believe that they will ever be able to own a home. And 42% of those who once purchased a home, but don't own one now, believe that they'll never own one again.

Some countries—such as Spain and Italy—have higher rates of home ownership than the U.S., but there, homes are often purchased with the support of extended families and are places to settle for the long term, not to flip to eager buyers or trade up for a McMansion. In France, Germany, and Switzerland, renting is more common than purchasing. There, most people invest their earnings in the stock market or squirrel it away in savings accounts. In those countries, whether you are a renter or an owner, houses have use value, not exchange value.

For most Americans, until the recent past, home ownership was a dream and the pile of rent receipts was the reality. From 1900, when the census first started gathering data on home ownership, through 1940, fewer than half of all Americans owned their own homes. Home ownership rates actually fell in three of the first four decades of the 20th century. But from that point on forward (with the exception of the 1980s, when interest rates were staggeringly high), the percentage of Americans living in owner-occupied homes marched steadily upward. Today more than two-thirds of Americans own their own homes. Among whites, more than 75% are homeowners today.

Yet the story of how the dream became a reality is not one of independence, self-sufficiency, and entrepreneurial pluck. It's not the story of the inexorable march of the free market. It's a different kind of American story, of government, financial regulation, and taxation.

We are a nation of homeowners and home-speculators because of Uncle Sam.

It wasn't until government stepped into the housing market, during that extraordinary moment of the Great Depression, that tenancy began its long downward spiral. Before the Crash, government played a minuscule role in housing Americans, other than building barracks and constructing temporary housing during wartime and, in a little noticed provision in the 1913 federal tax code, allowing for the deduction of home mortgage interest payments.

Until the early 20th century, holding a mortgage came with a stigma. You were a debtor, and chronic indebtedness was a problem to be avoided like too much drinking or gambling. The four words "keep out of debt" or "pay as you go" appeared in countless advice books. As the YMCA told its young charges, "If you can't pay, don't buy. Go without. Keep on going without." Because of that, many middle-class Americans—even those with a taste for single-family houses—rented. Home Sweet Home didn't lose its sweetness because someone else held the title.

in any case, mortgages were hard to come by. Lenders typically required 50% or more of the purchase price as a down payment. Interest rates were high and terms were short, usually just three to five years. In 1920, John Taylor Boyd Jr., an expert on real-estate finance, lamented that "increasing numbers of our people are finding home ownership too burdensome to attempt." As a result, there were two kinds of homeowners in the United States: working-class folks who built their own houses because they couldn't afford mortgages and the wealthy, who usually paid for their places outright. Even many of the richest rented—because they had better places to invest than in the volatile housing market.

The Depression turned everything on its head. Between 1928, the last year of the boom, and 1933, new housing starts fell by 95%. Half of all mortgages were in default. To shore up the market, Herbert Hoover signed the Federal Home Loan Bank Act in 1932, laying the groundwork for massive federal intervention in the housing market. In 1933, as one of the signature programs of his first 100 days, Frankin Roosevelt created the Home Owners' Loan Corporation to provide low interest loans to help out foreclosed home owners. In 1934, F.D.R. created the Federal Housing Administration, which set standards for home construction, instituted 25- and 30-year mortgages, and cut interest rates. And in 1938, his administration created the Federal National Mortgage Association (Fannie Mae) which created the secondary market in mortgages. In 1944, the federal government extended generous mortgage assistance to returning veterans, most of whom could not have otherwise afforded a house. Together, these innovations had epochal consequences.

Easy credit, underwritten by federal housing programs, boosted the rates of home ownership quickly. By 1950, 55% of Americans had a place they could call their own. By 1970, the figure had risen to 63%. It was now cheaper to buy than to rent. Federal intervention also unleashed vast amounts of capital that turned home construction and real estate into critical economic sectors. By the late 1950s, for the first time, the census bureau began collecting data on new housing starts—which became a leading indicator of the nation's economic vitality.

It's a story riddled with irony—for at the same time that Uncle Sam brought the dream of home ownership to reality—he kept his role mostly hidden, except to the army banking, real-estate and construction lobbyists who rose to protect their industries' newfound gains Tens of millions of Americans owned their own homes because of government programs, but they had no reason to doubt that their home ownership was a result of their own virtue and hard work, their own grit and determination—not because they were the beneficiaries of one of the grandest government programs ever. The only housing programs prominently associated with Washington's policy makers were underfunded, unpopular public housing projects. Chicago's bleak, soulless Robert Taylor Homes and their ilk—not New York's vast Levittown or California's sprawling Lakewood—became the symbol of big government.

Federal housing policies changed the whole landscape of America, creating the sprawlscapes that we now call home, and in the process, gutting inner cities, whose residents, until the civil rights legislation of 1968, were largely excluded from federally backed mortgage programs. Of new housing today, 80% is built in suburbs—the direct legacy of federal policies that favored outlying areas rather than the rehabilitation of city centers. It seemed that segregation was just the natural working of the free market, the result of the sum of countless individual choices about where to live. But the houses were single—and their residents white—because of the invisible hand of government.

But by the 1960s and 1970s, those who had been excluded from the postwar housing boom demanded their own piece of the action—and slowly got it. The newly created Department of Housing and Urban Development expanded home ownership programs for excluded minorities; the 1976 Community Reinvestment Act forced banks to channel resources to underserved neighborhoods; and activists successfully pushed Fannie Mae to underwrite loans to home buyers once considered too risky for conventional loans. Minority home ownership rates crept upward—though they still remained far behind whites. Even at the peak of the most recent real-estate bubble, just under 50% of blacks and Latinos owned their own homes. It's unlikely that minority home ownership rates will rise again for a while. In the last boom year, 2006, almost 53% of blacks and more than 47% of Hispanics assumed subprime mortgages, compared to only 26% of whites. One in 10 black homeowners is likely to face foreclosure proceedings, compared to only one in 25 whites.

During the wild late 1990s and the first years of the new century, the dream of home ownership turned hallucinogenic. The home financing industry—at the impetus of the Clinton and Bush administrations—engaged in the biggest promotion of home ownership in decades. Both pushed for public-private partnerships, with HUD and the government-supported financiers like Fannie Mae serving as the mostly silent partners in a rapidly metastasizing mortgage market. New tools, including the securitization of mortgages and subprime lending, made it possible for more Americans than ever to live the dream or to gamble that someone else would pay them more to make their own dream come true. Anyone could be an investor, anyone could get rich. The notion of home-as-haven, already weak, grew even more and more removed from the notion of home-as-jackpot.

And that brings us back to those desperate homeowners who gathered at Atlanta's convention center, having lost their investments, abruptly woken up from the dream of trouble-free home ownership and endless returns on their few percent down. They spent hours lined up in the hot sun, some sobbing, others nervously reading the fine print on their adjustable rate mortgage forms for the first time, wondering if their house is the next to go on the auction block. If there's one lesson from the real-estate bust of the last few years, it might be time to downsize the dream, to make it a little more realistic. James Truslow Adams, the historian who coined the phrase "the American dream," one that he defined as "a better, richer, and happier life for all our citizens of every rank" also offered a prescient commentary in the midst of the Great Depression. "That dream," he wrote in 1933, "has always meant more than the accumulation of material goods." Home should be a place to build a household and a life, a respite from the heartless world, not a pot of gold.

By:Thomas J. Sugrue is Kahn professor of history and sociology at the University of Pennsylvania. He is writing a history of real estate in modern America


Why not have the government provide billions and billions for all our old stuff? We trade in our old underwear, and buy new underwear. That keeps the sale of new underwear strong and continues to employ lots of workers in our factories.

We can get the government to buy all our old stuff: 8 track stereo players, record players, old lawnmowers, refrigerators, socks with holes in them, worn out shoes, beat up furniture and sofas that are sitting on our front porch, etc....


What a great idea! This type of cash could really have a real impact on instant spending by consumers, instead of political cronies getting money to build roads and bridges that fall apart using stimulus money! That money never provides any stimulus.

The best thing is that instead of getting 25 cents for a garage sale item like an old pair of shoes, the government could pay say $50 to trade them in for a new pair of $100 sneakers, for instance.

The economy would be instantly boosted! people would be back to work and this would be a way to recycle all our money...what we pay into the government we get back in new shoes ans stereos, for instance.

Wow, real government at work. Government we get something back from...government we can feel and believe in.

That is a stimulus! I'm forwarding my idea to the White House directly!


The enticing advertisement stated that you will get up to $4,500 for your clunker! So you gave up the clunker, but the dealer who was counting on getting the money from the government under that "great" successful idea DID NOT RECEIVE IT. I am waiting for the cash for stereos and mattresses and cash for refrigerators, and cash for lawnmowers, and cash for old yard pools, and cash for old shoes and suits and cash for leisure suits...why not!?

With big government, so far that was the ONLY big idea that actually worked even though it was just giving my money to others for FREE! Why not give away more money for literally everything. let's just get new stuff with the government buying our old stuff?

Sometimes, a dealer will not be able to collect the cash due to ineligible buyers etc., or for other reasons, and then can demand that the customer come up with the money that was due to be paid to the dealer by the government.

So, in actuality, the buyer can be shafted twice..once by the government and once by the dealer! So, what else is new?

Now the government is telling dealers how to run their business.

The U.S. Department of Transportation is advising consumers taking advantage of the “Cash for Clunkers” program not to sign contingency agreements promising to pay back up to $4,500 if dealers don’t receive payment from the government.

No contingency agreement is required to participate, the Transportation Department, which administers the $3 billion Car Allowance Rebate System, said on its Web site.

The Minnesota Automobile Dealers Association has a form on its Web site that members can use as part of a new-car closing. By signing the form, the buyer agrees to reimburse the dealership the incentive amount if the dealer is unable to obtain the credit from the government “for any reason.” The consumer can also return the car to the dealership and pay “a reasonable charge” for use of the new vehicle, according to the form.

Consumers signing the agreement also acknowledge their trade-in vehicle may have been destroyed and can’t be returned.

Dealers may be acting improperly by asking consumers to keep their old cars until credits for their vehicles are approved by the National Highway Traffic Safety Administration, the Transportation Department said on its Web site. If the new car is in stock, the dealer must allow the buyer to take possession before the paperwork for the credit can be submitted, the department said.

Cash Demands

In some cases, dealers are demanding $4,500 in cash to avoid reporting the car as stolen when the government credit doesn’t arrive, said Rosemary Shahan, president of Sacramento, California-based Citizens for Auto Reliability and Safety.

Gloria Sharp of Woodbury, Minnesota, traded in her Jeep Grand Cherokee for a new Honda Accord and said she was called a few days after the deal closed and asked for more money. The government rejected the credit, but the problem turned out to be on the dealer’s end -- they had mistakenly applied for $4,500 instead of $3,500, she said.

“They said if we didn’t give them the money, they wouldn’t submit the paperwork,” Sharp said.

San Francisco-based Consumer Action joined Shahan’s group at a news conference to ask the Department of Transportation, which administers the program, to prohibit dealers from forcing consumers to sign agreements that promise payments if the reimbursements don’t show up.

‘Bait and Switch’

“These practices are a form of ‘bait and switch,’” the groups wrote in a letter to Transportation Secretary Ray LaHood today. “Car buyers are particularly vulnerable to the dealers’ pressure because they have surrendered their traded-in vehicle and lack access to reliable information about whether or not the deal was approved by the government.”

Minnesota Automobile Dealers Association Executive Vice President Scott Lambert said the group would continue using the contingency form. The government hasn’t said the form can’t be used, and dealers have to protect their interests with so much uncertainty about the program, he said.

“I don’t think it’s NHTSA’s job to get between the customer and the dealer,” Lambert said. “If the consumer doesn’t want to sign the agreement, they can walk away.”

The state’s 250 participating auto dealers have submitted about $42 million in unprocessed credits, Lambert said. Deals are getting rejected by the government on technicalities and about 10 percent of Minnesota’s dealer claims have been accepted, he said. For the entire country, it’s about 2 percent, he said.

A Mess

“This program is administratively a mess,” Lambert said. “The dealerships are having a terrible time.”

Charles Cyrill, a spokesman for the National Automobile Dealers Association in McLean, Virginia, had no immediate comment.

The clunkers program is intended to spur new car sales and help revive the ailing auto industry. The program’s initial $1 billion was exhausted about a week after it formally began and President Barack Obama signed a bill approving an additional $2 billion on Aug. 7.

Lawmakers had expected the program to generate about 250,000 vehicle sales with enough money to last until Nov. 1. Consumers can receive up to a $4,500 credit for trading in an older car for one with better gas mileage, when certain conditions are met.

The government has received 316,189 applications for credits as of yesterday, according to the Transportation Department. The total dollar value of the submitted applications is $1.32 billion.

Congress intended that consumers get a good deal in return for trading up to more efficient vehicles, Shahan said. Dealers are using the program to reel consumers back into the showrooms to pay extra cash, a practice sometimes referred to as “yo-yo” financing, she said.

“This is yo-yo financing on steroids,” Shahan said.