Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Deficit

Despite Denials, the City of Vallejo is Headed for its Second Bankruptcy

Back in February, 2008, Vallejo, California, was in desperate shape. Councilwoman Stephanie Gomes saw what was coming: “Our financial situation is getting worse every single day. No [one] wants to declare bankruptcy, but if you’re facing insolvency, you have no choice….” Two months later her council voted 7-0 to declare Chapter 9 bankruptcy. In that two month period the city’s budget shortfall ballooned from $9 million to $15 million despite cuts to museums, libraries, senior centers and other publicly supported services like road repair. Now, according to Moody’s Investors Service, the city is

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Standard & Poor’s Downgrades Puerto Rican debt to junk status

Now that credit rating agency Standard & Poor’s has ended the suspense by announcing that it is cutting Puerto Rico’s $70 billion worth of general obligation bonds to junk status, questions about the island’s economic future abound. Will Fitch and Moody’s follow suit

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Rosy CBO Report Leaves out Critical Factors

At first reading the latest report on the government budget and the economy released on Tuesday by the Congressional Budget Office (CBO) is all sunshine and roses. In its summary of the 182-page report the CBO noted that deficits this year (from last October to next September) will be even lower than initially estimated, dropping to $514 billion, down from $680 billion last year and $1.1 trillion in 2012. And, in the very short run at least, further declines in deficits are expected through 2015, perhaps touching a low of

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Obama Executive Order to Force Americans to buy Government Bonds

Halfway through his State of the Union message Tuesday night, the president announced he was unilaterally going to fix another perceived problem through an executive order: mandating a requirement that all employers not already offering retirement plans start doing so. Said the president:

Let’s do more to help Americans save for retirement.

Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s.

That’s why, tomorrow, I will direct the Treasury to

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Highland Park, Michigan, is Teetering on the Brink of Bankruptcy

The final straw for Highland Park, Michigan, may have arrived in the form of a letter from Fifth Third Bank last month announcing it is ending its monthly checks that have provided life support for the city inside of Detroit for the last three years. One of three banks sending checks to the city, Fifth Third said in its letter dated December 12 that it is

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How to bankrupt a city: lessons from Scranton, Pennsylvania

This article first appeared at The McAlvany Intelligence Advisor on Friday, January 17th, 2014:

Poor Mert Gavin. He’s the owner of Mert’s Piano Bar in downtown Scranton, Pennsylvania, and between the pending 10% “drinking” tax and the extension of parking meter hours in front of his bar to 6PM, he’s finding that his customers are going home after work instead of stopping by for a cold one:

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Controversial Harvard Professors predict high inflation and defaults for the US

The two Harvard professors who made themselves famous, and then infamous, are at it again, now predicting that America will soon be forced to

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America’s Economic Freedom Slide Continues, says the Heritage Foundation

The latest Index of Economic Freedom released by the Heritage Foundation and the Wall Street Journal shows just how successful the Bush and Obama administrations have been in their seeming attempts to turn the United States into a third world economy. The index shows

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Ryan-Murray debt agreement gives away sequester cuts, sells out tea party conservatives

In announcing the budget agreement hashed out during secret negotiations over the past two weeks, Rep. Paul Ryan (R-Wis.) said:

I’m proud of this agreement. It reduces the deficit without raising taxes. And it cuts spending in a smarter way. It’s a firm step in the right direction…

This was for public consumption. In fact, now that the agreement has passed the House and will likely shortly pass the Senate, it will

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Judge declares Detroit bankrupt, gives OK to cut pensions and burn creditors

In the opening to his hour-long statement to a packed courthouse on Tuesday, federal bankruptcy court Judge Steven Rhodes said:

It is indeed a momentous day. We have here a judicial finding that this once proud and prosperous city can’t pay its debts. It’s insolvent.

It’s eligible for bankruptcy. At the same time it has an opportunity for a fresh start.

He reeled off the list of problems the city is facing:

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The Implosion of the Social Security Disability Ponzi Scheme Accelerates

Fresh data just released by the trustees of the Social Security Administration show that the number of people receiving benefits from the Disability Insurance Trust Fund has exploded over the last five years, reducing the surplus in that fund from $216 billion in 2008 to just over $100 billion in 2013. There were 7.4 million recipients in January 2009, but as of October 2013, there are nearly 9 million beneficiaries, not including

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S&P Downgrades France’s Debt again, to Third Tier, Halfway to Junk

In its announcement that credit rating agency Standard and Poor’s (S&P) was cutting its rating on France’s debt for the second time in less than two years, the agency minced no words:

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The Bubble in the Caribbean: Puerto Rico

This article was first published at The McAlvany Intelligence Advisor on Wednesday, October 30, 2013:

The complacency of municipal bond holders ended in July with the filing for bankruptcy by Detroit, an unhappy town of just 700,000 owing more than $18 billion to investors. Haircuts there have variously been estimated to be between 15 and 60 percent.

Since then, those holders have been looking around to find the next shoe to fall, and they have found it:

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Mixed Reactions to New Law Reopening Government

Once the 11th-hour vote to avoid the potential default was passed by the Senate and the House and signed into law by President Obama, key players in the game of fiscal chicken just ended began issuing their justifications and frustrations. That game, variously called “political brinkmanship”, a “temporary fix”, “a temporary ceasefire” and “a political achievement for Obama”, does everything the president wanted while

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Deficit down, national debt up, more taxes needed say two “nonpartisan” groups

Two government reports issued in the last few days show that despite higher tax revenues, thanks to the tax increases signed into law by the president earlier this year, deficits are still sky-high and the national debt continues its inexorable climb into the stratosphere.

Although the deficit for the first eleven months of the 2013 fiscal year was down slightly compared to last year at this time, real progress towards a balanced budget remains elusive. Through August the federal government spent

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University of California Study: The National Debt is really $70 Trillion

Professor James Hamilton, economics professor at the University of California, San Diego, just published his best estimate of the federal government’s “off-balance-sheet” liabilities and concludes that the real national debt, popularly estimated to be $16.9 trillion, is in fact more than four times larger: $70.086 trillion. This is because of decisions to

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Senator Wyden warns against the Surveillance State

In a remarkable speech to the left-wing progressive Center for American Progress on Tuesday, hard-core liberal Oregon Democrat Ron Wyden (Freedom Index Rating of 17) tore into the surveillance state, exposing its capabilities, its secret rules, its secret court and its failed efforts to protect itself from exposure.  He also noted the barest beginnings of a congressional effort to

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Will Scranton be Next?

Following Detroit’s application for bankruptcy protection under Chapter 9 last week, pundits have had a field day predicting which city would be next. Fox News thinks it’s going to be Chicago, which Moody’s just downgraded because of its $19 billion unfunded pension liabilities. The agency said those liabilities are “very large and growing” and as a result the city faces a “tremendous strain.”

Other cities like

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Detroit: the First Domino to Fall

This article was first published at The McAlvany Intelligence Advisor on Monday, July 22nd, 2013:

 

The city of Detroit is living proof that Herb Stein is right: if something cannot go on forever, it will stop. For Detroit, it stopped last week when

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Detroit Bankruptcy: No Winners

When Michigan Governor Rick Snyder announced his approval for Detroit’s emergency manager Kevin Orr to file for a municipal Chapter 9 bankruptcy, he admitted that Detroit’s problems were decades in the making:

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.

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