Go here for original.

The Age of America is Over -- So Says the IMF

By Paul Craig Roberts (about the author)

opednews.com

Today the Swiss franc made yet another new high against the super dollar, as it has been doing for 120 days. What you are reading in the graphs is less and less of the foreign currency that one dollar can buy. Of course, gold and silver also consistently hit new highs.

Swiss franc:

As did the Australian dollar:

British pound:

Danish krone:

Russian ruble

Swedish krona

Botswana pula:

European euro (despite the "sovereign debt crisis," a product of naive European trust in Americans and the criminality of Goldman Sachs and all of Wall St.):

Other currencies, such as the Brazilian real and Canadian dollar have been consistently making new highs against the US dollar but failed by a few hundreds of a percent to do so today.

Canadian dollar:

Ben Bernacke says QE will end in June, but he is either delusional or lying. If the Fed stops monetizing Treasury debt, how will the $1.5-trillion-dollar annual operating deficit of the US government be financed? Are Americans, who are broke, suffering 22% unemployment, foreclosures on their homes and running out of money before the end of the month, as Wal-Mart's CEO recently stated, going to finance a 1.5-trillion annual government deficit? If you think so, I have a bridge to sell in Brooklyn.

The combined trade surpluses of China, OPEC, Japan and Russia are insufficient to finance more than one-third of the US budget deficit, assuming these countries are willing, in the face of the evidence, to continue to acquire US debt.

That means, even under the most optimistic scenario, that the Federal Reserve will have to purchase annually $1-trillion in Treasury debt.

In other words, the US, the great Super Power over-filled with hubris, has outdone the fiscal irresponsibility of third-world banana republics. Superpower America is financing itself by printing money.

Washington, by conducting open-ended wars of aggression against non-puppet states, by giving its approval to the off-shoring of US jobs and thereby US GDP, and by saddling bankrupt taxpayers with $1-trillion in non-recourse loans to mega-rich people in order that the richest and most favored could borrow from the Fed at nearly zero rates of interest hundreds of millions of dollars to buy under-valued student loans, credit card debt, mortgages, whatever, and have any profits from the purchase of under-valued assets put in their bank account and any losses put on the Federal Reserve's books. Obviously, the US economy is a scheme run by the rich for the rich.

In this scheme to impoverish Americans for the benefit of the mega-rich, the Federal reserve actually gave hundreds of millions of dollars to the wives of New York investment bank CEOs in non-resource loans. The already rich wives bought up under-valued debt and made a killing. The wives had no risk whatsoever, because if their investments failed, it went onto the Federal Reserve's books, not on the wives' entity. See Matt Taibbi's The Real Housewives of Wall Street in Rolling Stone magazine.

As the International Monetary Fund said, recently, "the age of America is over."

Thank God. 

WISCONSIN'S SUPREME COURT ELECTION WAS VERY LIKELY RIGGED ELECTRONICALLY. NOW IT APPEARS THEY ARE RIGGING THE HAND RECOUNT. IF WE CAN NO LONGER "THROW THE BUMS OUT" WE WILL BE LIVING IN A DICTATORSHIP.

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RECOUNT ALERT! SERIOUS BREAK IN CHAIN OF CUSTODY IN WAUKESHA COUNTY!

Thursday, 28 April 2011 18:14 Citizen Journalist

Breaking News Out of Waukesha County Wisconsin -- This being reported from witnesses on the ground in Waukesha

"At around 2:15pm, we were ready to open the bags for Delafield. There were three bags total. Bags 1 & 2 were fine. The numbers all matched up. When we got to bag 3, we found out that the bag # was NOT RECORDED ON THE INSPECTOR'S statement...! The Republican canvass person said we could assume that the clerk forgot to write the # down on the inspector's statement and we could proceed. Of course, this is a break in the chain of custody!..."

So Bill (volunteer lawyer) objected. I got my phone out and went to call the campaign. The sheriff wouldn't let me out the back door (even though I went out that door to use the restroom earlier) but made me go around everyone to the front door (front door is for reps, back door is for public). I had to get past the guy sitting out front wanting to know if I was leaving for the day, what my name was...

I called the campaign and they said to tell Bill to tell the judge that we are considering making an objection and want to have legal counsel. They said DO NOT open the bag. I raced back into the room and found Bill. He said the bag had already been opened..."

"He said he objected and asked the judge to open the other bags first, and not # 3, but the judge said NO. Bill said it's in the minutes and we have a record of it. BUT...they started counting the ballots in bag 3 first. By this time the ......media started pouring in.

Darcy said that with this big a municipality ...that we're talking thousands of votes (I think she said 10,000). I don't know how many votes we're talking here, but this is very suspicious. Why couldn't the judge wait? Why did they open # 3 first? Darcy said the judge was in the hall talking to Kevin Kennedy about it. I had to leave, I was too upset."

UPDATE: From Wxow.com

Prosser explains why he couldn't have been meeting with Walker that day. Find the story here.

"Prosser told WKOW27 News the closest time to the April 5 election when he spoke even casually with Walker was April 1, when both Walker and Prosser attended a republican party event in Waukesha County.

Prosser said his driver recalls taking Prosser to his Madison condominium, not the state capitol, on the day after the election. Prosser said they traveled from Delafield."

Ladies and gentlemen SHARE THIS story..when is it going to end?

Last Updated on Thursday, 28 April 2011 21:59

UPDATE ON RAMPANT ELECTION THIEVERY IN THE U.S.

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THE INVISIBLE HAND: A CASE STUDY IN STRIPPING AWAY ELECTION RIGHTS

By Bev Harris

Permission to reprint or excerpt granted, with link to http://www.blackboxvoting.org
You can discuss this article here:
http://www.bbvforums.org/forums/messages/8/81673.html

As Colorado election officials battle the public over right to examine ballots, new questions on public right to authenticate ballots have surfaced in New Hampshire, where the powerful First-In-The-Nation presidential primary will take place in 2012. If New Hampshire is to have its thumb on the scale in presidential politics, election transparency needs to be an absolute requirement. In a bizarre chain of events, nontransparency was entered surreptitiously into a New Hampshire statute in 2003.

NEW HAMPSHIRE IS GOING AGAINST THE GRAIN

Ballots are an open record under Colorado law though clerks are fighting the public on this. Marilyn Marks, supported by Black Box Voting, is litigating over wrongful denial of public right to inspect Colorado ballots. This is currently in the Colo. Supreme Court now (Looking good so far ... more on that below).

In Wisconsin where a hot political recount is taking place, the public can opt to examine ballots with or without a recount. In Michigan, the public can even take pictures of ballots. In Florida, a consortium of news organizations examined ALL the ballots from the 2000 presidential election. In California, two counties (Humboldt and Yolo) make photocopies of all the ballots available to the public for examination.

But in 2003, New Hampshire ballots were ever-so-quietly EXCLUDED from public right to know. How could this happen?

THE INVESTIGATION INTO NEW HAMPSHIRE'S REMOVAL OF BALLOTS FROM RIGHT-TO-KNOW LAW

Black Box Voting director Bev Harris, board member Nancy Tobi, and an extraordinary New Hampshire citizen named Deborah Sumner conducted an investigation this month into New Hampshire's action to exempt ballots from its Right-to-Know law. What we found was shocking.

From: Deborah Sumner
Subject: The mystery of why ballots are exempted from NH Right to Know Law

"Still trying to track down more info on why ballots were exempted from NH right to know law. It seems to me, if there was any discussion, it was removed from the official record or took place behind closed doors."

Sumner learned that in 2003 the New Hampshire State Senate sneaked an extraneous amendment into an unrelated bill, HB 627, pertaining to defining domicile to comply with a Help America Vote requirement.

In other words, in a bill about residency requirements for voter registration, suddenly, magically, and out of thin air, an amendment appeared to exclude ballots from New Hampshire right to know law.

"No evidence the amendment had a public hearing," Sumner writes. "Original bill did in the House."

TO PASS A LAW IN NEW HAMPSHIRE:

Both the New Hampshire House and Senate must pass the bill, and it must be identical in form.

In the case of 2003 House Bill 627, the house passed a bill which had nothing to do with excluding ballots from public right to know.

The senate got the bill, went into committee, had a hearing and obtained a detailed opinion from the attorney general, all pertaining to a bill that had NO LANGUAGE WHATSOEVER about removing ballots from public oversight.

TIMELINE FOR THE MYSTERY AMENDMENT

I traveled to New Hampshire and examined the file on this bill, requesting all notes, minutes, committee actions and testimony. Here is the curious timeline:

MARCH 2003: The House Elections Committee had a hearing and invited several officials to discuss the bill, which had NO LANGUAGE about excluding ballots from right to know law.

MARCH 2003: The House passed the bill, which included NO LANGUAGE about excluding ballots from right to know law.

APRIL 30, 2003: The Senate Internal Affairs Committee had a hearing on HB 627. At this time there was NO LANGUAGE about excluding ballots from right to know law.

APRIL 30, 2003: Bud Fitch from the Attorney General's office provided a legal analysis on the bill which contained NO LANGUAGE about excluding ballots from right to know law.

MAY 9, 2003: Suddenly, magically, and with no notes, testimony, hearing, legal analysis, or any visible explanation or discussion, an amendment appeared in the Senate bill to exclude ballots from right to know. This amendment was passed by the Senate.

JUNE 2003: The House saw what the Senate did to the bill. They REFUSED TO AUTHORIZE the version of the bill containing an exclusion of ballots from right to know law.

WHAT HAPPENS WHEN THE HOUSE AND SENATE CANNOT AGREE?

JUNE 2003: When the House refuses to concur with the Senate, a "Committee of Conference" is called to see if they can get together on the language. The Committee of Conference REMOVED the offending language about excluding ballots from public right to know.

JUNE 24, 2003: The bill, with the offensive language removed, was then passed by both House and Senate.

SO HOW WERE PUBLIC RIGHTS ULTIMATELY VIOLATED?

JUNE 30, 2003 a murky little amendment posing as a "technical amendment" was passed. This amendment is both improperly vague in its wording and illegal in its implementation.

TECHNICALITIES ONLY: THE "ENROLLED BILLS" COMMITTEE"

After both houses pass a bill, it is sent to the "Enrolled Bills Committee" which checks the bill for typos, spelling errors, and other minor problems. The Enrolled Bills Committee has no right to alter content in a passed bill. But they did.

The Enrolled Bills Committee added several paragraphs to the bill, then hid them with an opaque phrase. They incorporated content that had been explicitly removed in the version passed by House and Senate, hiding the changed content behind one vague and illicit sentence: "restore original language."

This language was weirdly vague. What "original language"? The "original language" in the house bill (WITHOUT the rights-stripping amendment); or the amended language from the Senate bill (WITH the rights-stripping amendment)?

WHO WAS THE INVISIBLE HAND?

Here's what I found:

- All notes and minutes from the Senate committee pertaining to creation of the right-stripping amendment are now absent from the file on HB 627 at the archives.

- All notes and minutes from the joint "Committee of Conference" are absent from the file.

- A note in the Senate Journal indicates that one senator, Sylvia Larsen, was removed midstream from the Committee of Conference, replaced with Senator Flanders who was formerly State Treasurer, reputedly a very tight-lipped guy. One would surmise that Larsen refused to play ball with the boys.

Even after booting out Larsen they could not reach concurrence with the House.

- No notes exist in the file from the Enrolled Bills Committee.

- No notes exist from the Office of Legislative Services (the research arm for the Enrolled Bills Committee).

- The file contains not a whisper about the ballot exclusion from the Secretary of State or the attorney general's office.

- In fact, all notes, minutes, research, testimony, or records of any kind which reference the offending amendment are missing from the file, and it is never mentioned in discussion on either the House or Senate floor.

All we can find was that on June 30 after the technical check for spelling and punctuation, exclusion of ballots from right to know arose like a wraith to appear in a bill which had already been passed by both houses without the exclusion.

JUNE 30, 2003: One obtuse line, "revert to original language" was put into a technical amendment and passed by house and senate.

WHO WAS ON THE ENROLLED BILLS COMMITTEE?

Senators Eaton, Green, Clegg, D'Allesandro and Larsen. Though there are no notes from this committee, not even the customary form indicating who approved and disapproved of the final form, a minimum of three of the above-mentioned senators were clearly complicit.

It was a ballsy move. It seems unlikely they would have inserted this change in content, violating protocol for the Enrolled Bills Committee, without encouragement from an invisible hand.

- The Office of Legislative Services coordinates with the Enrolled Bills Committee. I called them to inquire how this happened. They told me they cannot make changes in content, and limit themselves to suggesting spelling or punctuation changes along with a review to make sure the language doesn't violate existing law.

The Enrolled Bills Committee would have known that Sec. State Bill Gardner and Asst. A.G. Bud Fitch would sign off on it before sending the bill to the governor.

Bud Fitch has since left the attorney general's office to take a position with former Attorney General Kelly Ayotte (now a U.S. Senator). Bill Gardner and/or his key operations guy, David Scanlan, will run the 2012 New Hampshire first-in-the-nation presidential primary.

While removing ballots from public right to know might make it easier to control a presidential primary, it certainly doesn't offer transparency and it violates the public right to self-government, the very cornerstone of both the New Hampshire and the US Constitution. And it goes against trend: Our right to examine ballots is receiving more attention, and more formal recognition:

AN UPBEAT WORD ON THE COLORADO SUPREME COURT CASE

Will appeals court free Aspen ballots?
http://blogs.denverpost.com/carroll/2011/04/25/will-appeals-court-free-aspen-ballots/47/

By Vincent Carroll

As I pointed out in my Saturday column
http://www.denverpost.com/carroll/ci_17910900 -- Colorado elections aren't nearly as transparent as they should be because election officials insist that the constitutional mandate for "secrecy in voting" means that voted ballots must be kept under wraps.

But maybe that highly convenient reading of the law - convenient for city and county clerks, that is - is on its last legs. At least that's the sense I got at a hearing Monday at the state court of appeals involving a case pitting Aspen against an unsuccessful mayoral candidate who is seeking to view digital copies of ballots from the 2009 election.

Marilyn Marks' bid for the digital images was rejected by a district court, but the three-judge appeals panel appeared somewhat more sympathetic to her goal - as it should be.

Judge Arthur P. Roy seemed most skeptical of arguments that providing the images to Marks might somehow compromise ballot secrecy. And he was not reassured when the special counsel for Aspen, James True, suggested that an election judge who accidentally left a chocolate smudge on a voter's ballot might later recognize that ballot if it became a public document and thus discover the voter's choices.

Honestly. This far-fetched hypothetical was offered with a straight face as an argument for barring even carefully regulated public access to ballots.

True's other main argument was that voters who wrote in a candidate might be identified - not only by their handwriting but also, in a small
community, by the pattern of their votes. Yet both of these possibilities of a secrecy breach are almost as highly speculative as the chocolate smudge. Are these really the best arguments available for opponents of transparency?

Voted ballots are anonymous by law. And it's high time that Colorado courts told the clerks that they should stopping saying otherwise.

* * * * *

To support litigation on public right to see the ballots, note your donation "Colorado Project":
http://www.blackboxvoting.org/donate.html

Black Box Voting,  Inc. | 330 SW 43rd St Suite K - PMB 547 | Renton, WA 98057

MUST READ: ELLEN BROWN EXPLAINS HOW THE U.S. MONEY SUPPLY DIRECTLY RESULTS FROM CREATION OF GOVERNMENT DEBT. IT FOLLOWS THAT "CUTTING THE DEFICIT" WOULD CONTRACT THE MONEY SUPPLY, THEREBY TURNING RECESSION INTO DEPRESSION.

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Find original here: http://www.webofdebt.com/articles/cheney_deficits.php

CHENEY WAS RIGHT ABOUT ONE THING: DEFICITS DON’T MATTER

Ellen Brown
April 25th, 2011
www.webofdebt.com/articles/cheney_deficits.php

“Deficit terrorists” are gutting governments and forcing the privatization of public assets, all in the name of “deficit reduction.” But deficits aren’t actually a bad thing. In today’s monetary scheme, in which most money comes from debt, debt and deficits are actually necessary to have a stable money supply. The public debt is the people’s money. 

Former Vice President Dick Cheney famously said, "Deficits don't matter." A staunch Republican, he was arguing against raising taxes on the rich; but today Republicans seem to have forgotten this maxim. They are bent on stripping social programs, privatizing public assets, and gutting unions, all in the name of "deficit reduction." 

Worse, Standard & Poor’s has now taken up the hatchet. Some bloggers are calling it blackmail. This private, for-profit rating agency, with a dubious track record of its own, is dictating government policy, threatening to downgrade the government’s long-held triple AAA credit rating if Congress fails to deal with its deficit in sufficiently draconian fashion. The threat is a real one, as we’ve seen with the devastating effects of downgrades in Greece, Ireland and other struggling countries. Lowered credit ratings force up interest rates and cripple national budgets. 

The biggest threat to the dollar’s credit rating, however, may be the game of chicken being played with the federal debt ceiling. Nearly 70 percent of Americans are said to be in favor of a freeze on May 16, when the ceiling is due to be raised; and Tea Party-oriented politicians could go along with this scheme to please their constituents.

If they get what they wish for, the party could be over for the whole economy. The Chinese are dumping U.S. Treasuries, and the Fed is backing off from its “quantitative easing” program, in which it has been buying federal securities with money simply created on its books. When the Fed buys Treasuries, the government gets the money nearly interest-free, since the Fed rebates its profits to the government after deducting its costs. When the Chinese and the Fed quit buying Treasuries, interest rates are liable to shoot up; and with a frozen debt ceiling, the government would have to default, since any interest increase on a $14 trillion debt would be a major expenditure. Today the Treasury is paying a very low .25% on securities of 9 months or less, and interest on the whole debt is about 3% (a total of $414 billion on a debt of $14 trillion in 2010). Greece is paying 4.5% on its debt, and Venezuela is paying 18% -- six times the 3% we’re paying on ours. Interest at 18% would add $2 trillion to our tax bill. That would mean paying three times what we’re paying now in personal income taxes (projected to be a total of $956 billion in 2011), just to cover the interest.

There are other alternatives. Congress could cut the military budget -- but it probably won’t, since this option is never even discussed. It could raise taxes on the rich, but that probably won’t happen either. A third option is to slash government services. But which services? How about social security? Do you really want to see Grandma panhandling? Congress can’t agree on a budget for good reason: there is no good place to cut.

Fortunately, there is a more satisfactory solution. We can sit back, relax, and concede that Cheney was right. Deficits aren’t necessarily a bad thing! They don’t matter, so long as they are at very low interest rates; and they can be kept at these very low rates either by maintaining our triple A credit rating or by borrowing from the Fed essentially interest-free.

The Yin and Yang of Money

Under our current monetary scheme, debt and deficits not only don’t matter but are actually necessary in order to maintain a stable money supply. The reason was explained by Marriner Eccles, Governor of the Federal Reserve Board, in hearings before the House Committee on Banking and Currency in 1941. Wright Patman asked Eccles how the Federal Reserve got the money to buy government bonds. 

“We created it,” Eccles replied.

“Out of what?” 

“Out of the right to issue credit money.”

“And there is nothing behind it, is the­re, except our government’s credit?”

“That is what our money system is,” Eccles replied. “If there were no debts in our money system, there wouldn’t be any money.”

That could explain why the U.S. debt hasn’t been paid off since 1835. It has just continued to grow, and the economy has grown and flourished along with it. A debt that is never paid off isn’t really a debt. Financial planner Mark Pash calls it a National Monetization Account. Government bonds (or debt) are “monetized” (or turned into money). Government bonds and dollar bills are the yin and yang of the money supply, the negative and positive sides of the national balance sheet. To have a plus-1 on one side of the balance sheet, a minus-1 needs to be created on the other.

Except for coins, all of the money in the U.S. money supply now gets into circulation as a debt to a bank (including the Federal Reserve, the central bank). But private loans zero out when they are repaid. In order to keep the money supply fairly constant, some major player has to incur debt that never gets paid back; and this role is played by the federal government.

That explains the need for a federal debt, but what about the “deficit” (the amount the debt has to increase to meet the federal budget)? Under the current monetary scheme, deficits are also necessary to avoid recessions.

Here is why. Private banks always lend at interest, so more money is always owed back than was created in the first place. In fact investors of all sorts expect more money back than they paid. That means the debt needs to be not only maintained but expanded to keep the economy functioning. When the Fed “takes away the punch bowl” by tightening credit, there is insufficient money to pay off debts; people and businesses go into default; and the economy spins into a recession or depression.

Maintaining a deficit is particularly important when the private lending market collapses, as it did in 2008 and 2009. Then debt drops off and so does the money supply. Too little money is available to buy the goods on the market, so businesses shut down and workers get laid off, further reducing demand, precipitating a recession. To reverse this deflationary cycle, the government needs to step in with additional public debt to fill the breach.

Debt and Productivity

The U.S. federal debt that is setting off alarm bells today is about 60% of GDP, but it has been much higher than that. It was 120% of GDP during World War II, which turned out to be our most productive period ever. The U.S. built the machinery and infrastructure that set the nation up to lead the world in productivity for the next half century. We, the children and grandchildren of that era, were not saddled with a crippling debt but lived quite well for the next half century. The debt-to-GDP ratio got much lower after the war, not because people sacrificed to pay back the debt, but because the country got so productive that GDP rose to meet it. (See charts.) 

That could explain the anomaly of Japan, the global leader today in deficit spending. In a CIA Factbook list of debt to GDP ratios of 132 countries in 2010, Japan topped the list at 226%. So how has it managed to retain its status as the world’s third largest economy? Its debt has not crippled its economy because:

(a) the debt is at very low interest rates; 

(b) it is owed to the people themselves, not to the IMF or other foreign creditors; and 

(c) the money created by the debt has been used to produce goods and services, allowing supply and demand to increase together and prices to remain stable.

The Japanese economy has been called “stagnant,” but according to a review by Robert Locke, this is because the Japanese aren’t aiming for growth. They are aiming for sustainability and a high standard of living. They have replaced quantity of goods with quality of life. Locke wrote in 2004:

“Contrary to popular belief, Japan has been doing very well lately, despite the interests that wish to depict her as an economic mess. The illusion of her failure is used by globalists and other neoliberals to discourage Westerners, particularly Americans, from even caring about Japan’s economic policies, let alone learning from them. [And] it has been encouraged by the Japanese government as a way to get foreigners to stop pressing for changes in its neo-mercantilist trade policies.”

 The Japanese economy was doing very well until 1988, when the Bank for International Settlements raised bank capital requirements. The Japanese banks then tightened credit and lent only to the most creditworthy borrowers. Private debt fell off and so did the money supply, collapsing the stock market and the housing bubble. The Japanese government then started spending, and it got the money by borrowing; but it borrowed mainly from its own government-owned banks. The largest holder of its federal debt is Japan Post Bank, a 100% government-owned commercial bank that is now the largest depository bank in the world. The Bank of Japan, the nation’s government-owned central bank, also funds the government’s debt. Interest rates have been lowered to nearly zero, so the debt costs the government almost nothing and can be rolled over indefinitely.

Japan’s economy remains viable although its debt-to-GDP ratio is nearly four times that of the United States, because the money does not leave the country to pay off foreign creditors. Rather, it is recycled into the Japanese economy. As economist Hazel Henderson points out, Japan’s debt is twice its GDP only because of an anomaly in how GDP is calculated: it omits government-provided services. If they were included, Japan’s GDP would be much higher and its debt to GDP ratio would be more in line with other countries.’ 

Investments in education, health care, and social security may not count as “sales,” but they improve both the standard of living of the people and national productivity. Businesses that don’t have to pay for health care can be more profitable and competitive internationally. Families that don’t have to save hundreds of thousands of dollars to put their children through college can spend on better housing, more vacations, and other consumer items.

Turning the National Debt into a Public Utility

Locke calls the Japanese model “a capitalist economy with socialized capital markets.” The national debt has been “monetized” – turned into the national money supply. The credit of the nation has been turned into a public utility. 

Thomas Hoenig, President of the Kansas City Federal Reserve, maintains that the largest U.S. banks should be put in that category as well. At the National Association of Attorneys General conference on April 12, he said that the 2008 bank bailouts and other implicit guarantees effectively make the too-big-to-fail banks government-guaranteed enterprises, like mortgage finance companies Fannie Mae and Freddie Mac. He said they should be restricted to commercial banking and barred from investment banking.

"You're a public utility, for crying out loud," he said.

The direct way for the government to fund its budget would have been to simply print the money debt-free. Wright Patman, chairman of the House Banking and Currency Committee in the 1960s, wrote:

“When our Federal Government, that has the exclusive power to create money, creates that money and then goes into the open market and borrows it and pays interest for the use of its own money, it occurs to me that that is going too far. . . . [I]t is absolutely wrong for the Government to issue interest-bearing obligations. . . . It is absolutely unnecessary.”

But that is the system that we have. Deficits don’t matter in this scheme, but the interest does. If we want to keep the interest tab very low, we need to follow the Japanese and borrow the money from ourselves through our own government-owned banks, essentially interest-free. “The full faith and credit of the United States” needs to be recognized and dispensed as a public utility.

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Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://webofdebt.com and http://ellenbrown.com.

THIS MORNING BEN BERNANKE IS HOLDING A PRESS CONFERENCE. ECONOMIST JAMES K. GALBRAITH DISCUSSES WHAT QUESTIONS HE WOULD ASK AND WHY. FOR EXAMPLE, WHY IS THE FED NOW PAYING INTEREST ON RESERVES HELD BY THE BIG BANKS, WHILE RESTRAINING THE GROWTH OF LENDING TO HOME BUYERS AND SMALL BUSINESSES?

  theREALnews

April 27, 2011

What I Would Ask Bernanke

James K. Galbraith: A few questions I would ask at the Head of the Fed's rare press conference Wednesday


Original here

Prof. James K. Galbraith is Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the LBJ School and UT Austin's Department of Government, where he teaches economics and a variety of other subjects He holds degrees from Harvard (B.A. magna cum laude, 1974) and Yale (Ph.D. in economics, 1981). He studied economics as a Marshall Scholar at King's College, Cambridge in 1974-1975, and then served in several positions on the staff of the U.S. Congress, including Executive Director of the Joint Economic Committee. He was a guest scholar at the Brookings Institution in 1985. He directed the LBJ School's Ph.D. Program in Public Policy from 1995 to 1997. He is currently the Director of University of Texas Inequality Project.

Galbraith served as Chief Technical Adviser to the State Planning Commission, P.R. China, on a project on macroeconomic reform from 1994 to 1997. He has co-authored two textbooks, The Economic Problem with Robert L. Heilbroner and Macroeconomics with William Darity, Jr., as well as Balancing Acts: Technology, Finance and the American Future.

Galbraith's book, Created Unequal: The Crisis in American Pay, was published by the Free Press in August 1998. His new book, Inequality and Industrial Change: A Global View (Cambridge University Press, 2001), is coedited with Maureen Berner and features contributions from six LBJ School Ph.D. students. Galbraith maintains several outside connections, including serving as a Senior Scholar of the Levy Economics Institute and as chair of Economists Allied for Arms Reduction (ECAAR). He also writes a column on economic and political issues for the Texas Observer

SOME QUESTIONS FOR CONGRESSMAN PAUL RYAN THAT EVEN AGING REPUBLICANS WOULD WANT TO KNOW THE ANSWERS TO: REAL DEATH PANELS?

Congressman Ryan, I Don’t Want To Be A Lab Rat

Apr. 22 2011 - 3:38 pm

Posted by Mark Sunshine

An open and a sent letter to Rep. Paul Ryan (R-Wisc.)

Congressman Paul Ryan

1233 Longworth HOB

Washington, D.C. 20515

Dear Congressman Ryan,

Please explain your Medicare plan to me and my wife. We are in our early fifties and are concerned about how your changes to Medicare will affect us. We know that Washington can seem disconnected from the real world but, for people of our age, your plan to do away with Medicare is very real.

Getting rid of Medicare feels like a free markets experiment to us and neither of us wants to be a “lab rat” for a social and economic experiment gone awry. Lab rats are usually expendable and we don’t want to be part of a discarded generation.

By way of background, both of us believe in free markets, personal responsibility and individual choice. We agree that the nation’s future demands fiscal responsibility. We are educated (we have graduate degrees), are employed, are savers and have put aside money for retirement.

We were surprised by the fast track House acceptance of your plan to eliminate Medicare benefits and change Medicaid. Because of the lack of meaningful debate or hearings we don’t know anything about the details of your plan and want to understand how it will change our lives.

Please do not take offense by any of the questions. They are intended to be non-partisan but these are questions that need to be addressed. We believe that elder care benefits will determine when we die and whether or not we end with dignity. We just want to know what the future holds under your voucher program.

As we understand your plan, when we reach our golden years, we, like every other senior in our age group, will be given a voucher to purchase private health insurance. We will need to personally chose which health care plan to purchase from what is hoped to be an array of choices. To the extent that insurance or non-covered health care costs exceed the amount of our voucher, we will pay the extra amount out of our savings.

Since we will be elderly, after we get sick we won’t have a “second chance” to go back to work, earn new money or financially recover. If our savings run out before we die that’s it — there won’t be any more money coming our way — so we think that it’s really important for your plan to get it right, and the first time. There won’t be any second chances for us.

Since you are known as a “serious and responsible” thinker, before proposing the dismantling of Medicare as we have known it, we assume you figured out what will replace it and verified that the private insurance market can fairly and adequately service the needs of seniors. We just want to know what you were thinking before introducing legislation on the floor of the House that was passed in a matter of hours from introduction.

We assume that you looked at the current Medicare Advantage program as a starting point for your plan. Medicare Advantage is also known as Medicare Part C and gives seniors the option to enter an HMO or PPO rather than receive traditional Medicare benefits.

We hope insurance experts told you that Medicare Part C is a bad reference point for what you want to do because it is a reversible option. Seniors that don’t like or aren’t adequately covered by Medicare Part C can opt back out into a traditional Medicare program. So the insured pool of seniors in the Medicare Advantage program isn’t random or representative of what will happen if your program is adopted. The Medicare Advantage program provides false comfort that private insurance can be expanded to all seniors without serious bad effect.

Below are some of our questions about your program. We will probably have other questions after we understand some of the basics of your plan.

1. How is your plan going to deal with pre-existing conditions and pricing?

If we need to change insurance companies will we be rejected by replacement companies because of pre-existing conditions?

Since your plan calls for a repeal of the President’s health care bill it seems that protections for pre-existing conditions will be repealed . Is that correct or do you expect to keep some parts of the President’s healthcare reform law?

Also, what insurance company in their right mind is going to voluntarily insure me and a group of old people? We will be a bad risk because every one of us will either be sick and dying or about to be sick and dying. For the insurance company to make a profit on a group of old people they will have to charge a really high premium. Will there be a cap on premiums and if so how is this a “free market solution”?

2. How does your program protect us if we have diminished mental capacity?

It is a fact that as some people age they have diminished mental capacity and I am expecting that neither my wife nor I will be an exception. I am worried that we won’t be able to make an informed decision as to which insurance plan to purchase. The contracts are complicated and full of small print. They are drafted by Wall Street lawyers and designed to protect the insurance company. If we can’t understand our insurance options and make an intelligent choice how will we purchase the right plan?

3. What happens when we have less than diminished capacity and can’t effectively make any decisions on our own?

I know from firsthand experience that in some states elderly are still deemed to have “legal capacity” even though they are dramatically diminished and can’t make their own decisions or take care of themselves. Are you proposing some new form of Federal definition of “capacity” that supersedes state law so that very impaired elderly people have someone that helps them purchase insurance?

As an example, my wife’s grandfather is 90+ years old and has had several strokes. He can’t read, talk, write, drive, feed or otherwise take care of himself without full time assistance. He lives in Maryland and despite his mental and physical disabilities, in the state of Maryland he is legally competent and was only recently denied his driver’s license renewal (we took away his car keys more than 8 years before Maryland took away his legal right to drive).

Even before my wife’s grandfather had his major stroke, when he was in his early 80s, he didn’t have the mental capacity to understand and purchase MediGap insurance. When he got sick we discovered that he had messed up the application and thought that he was covered even though he hadn’t paid premiums for years.

If that happens to me or my wife, who will help us when we are still deemed competent by the state, but clearly unable to live independently or make adult decisions?

And, what happens if we are deemed incompetent?

Who will take care of us and purchase insurance if we are truly incapacitated?

Also, what happens to us if our guardian makes a bad insurance purchasing decision and we neither have money, insurance nor capacity to help ourselves?

4. If an insurance company decides to incorrectly deny benefits who will protect and defend us?

When we are old and sick who will protect us from an insurance company refusing payment on legitimate claims?

Even worse, how will anyone even know if an insurance company refuses payment on necessary care and I (or my wife) am harmed as a result?

Will the insurance company have any liability for refusing to pay for care or for dictating what care we receive? Can we sue? If we are old and permanently harmed, will it even matter if we can sue?

Who at the insurance company will be making coverage and payment decisions? What standard of care will they need to use? Do they have a fiduciary responsibility to me as the insured or will their shareholders obligations be more important?

Will the insurance company be allowed to earn more money if they deny care to seniors?

It’s my impression that seniors and their doctors know the Medicare rules and as long as they stay within the rules, reimbursement is predictable and timely. No one from the government has a financial incentive to deny payment or mess around with patient care.

Private insurance is different. There is a big incentive to go cheap on care and not pay out benefits. I am worried that panels of insurance executives will end up effectively deciding who lives and who dies in an effort to maximize profits while fulfilling fiduciary responsibilities to their shareholders. These will be real Death Panels and the prospect terrifies me. It’s bad enough when insurance companies take advantage of young people. How will old people who killed off by insurance companies defend themselves?

5. What will protect us from bait and switch advertising and tactics?

For seniors, it’s too late to figure out that an insurance company has pulled a bait and switch after care is denied.

I think that the recent national experience of having banks bait and switch virtually every individual and institutional customer should be enough to be concerned about conflicts of interest between customer needs and shareholder profits. Regulators couldn’t control the banks, why do you think they will be able to control insurance companies any better?

Seniors need more protection than bank customers. The elderly can’t risk regulators being late to the game. There aren’t any do overs when it comes to seniors. Small mistakes are fatal.

How do you propose to protect me and my wife from bait and switch tactics?

6. Medicare is a national program but insurance is regulated on a state by state basis. Are you proposing an expansion of Federal authority over insurance companies or will the options, protections and risks be different depending upon what state I live in?

When I am a senior, will I have to decide where to live based upon insurance regulation of my state? My parents didn’t have to make those choices or decisions, nor did their parents, nor did anyone before me since Medicare was enacted.

Will my wife and I have to move from our home if our state has crummy insurance and consumer protection laws?

Or, are you proposing new Federal regulation over insurers that provides consistent national coverage for seniors that isn’t dependent upon state residence status?

And, if you are proposing new Federal insurance regulations how do governors, state insurance officials and state’s rights advocates feel about the Federal government expanding onto their turf? Also, where in your budget is the funding for this new agency?

7. What happens if I outlive my financial resources? Will Medicaid cover me so that I can die with dignity? Or will I just die?

With the cost of nursing home care in some places exceeding $75,000 per year per person, it isn’t hard to imagine that my wife and I may outlive our financial resources. You are proposing large scale cuts to Medicaid. What happens if we run out of money before we die because we are placed in a nursing home?

Will someone take care of us and help us when we literally can’t go to the bathroom by ourselves but also have no money to pay for help?

Or will we have to choose between food, clothing or housing and medical care (and that assumes we have the mental or physical capacity to make choices)? Will your plan make us homeless and indigent like many of the elderly of the 1920’s and 1930’s?

8. What other large industrialized countries have adopted a plan for senior care similar to what you propose and how has it worked?

I am hoping that sometime since the beginning of the industrial revolution another country has tried your plan and it worked.

Can you point to any country, anywhere in the world, where your plan has been tested and it worked? I would feel a lot better if that were the case.

Congressman Ryan, please feel free to provide as much detail as possible on how, as a practical matter, your plan will be implemented. I understand that your objective is to save money — I just wonder if there isn’t a less radical approach that would work.

For example what’s wrong with modifying the current Medicare system to include means testing on co-payments and deductibles, increasing the eligibility age by a few years, restricting payment of certain elective procedures and working to reduce hospital and provider administrative costs. Tort reform relating to end of life care couldn’t hurt either. These changes would be easy to implement, fair to all and still provide protection for the elderly.

When I was a child I read stories about how animals that that get old walk into the forest to die. They are never heard from again and as a result aren’t a burden on their herd. The remaining animals have better survival odds because they are not forced to waste precious resources on old animals that are going to die anyway.

For better or worse, a long time ago we decided that we were different than animals and that old people shouldn’t be asked to “take one” for the team.

Congressman Ryan, I am worried that your plan basically is telling me and my wife to get ready for that long walk into the forest. Please tell me it isn’t true and that I am over reacting.

Sincerely,

Mark Sunshine

PS. Even though I don’t live in your district it would be nice if you answer this letter.

TWO TOP ECONOMISTS DEBATE HOW BEST TO END THE RECESSION, AGREEING THAT REDUCING GOVERNMENT DEBT WOULD ONLY PROLONG AND DEEPEN IT

  theREALnews

Hudson/Wolff on debt and recession

Michael Hudson and Richard Wolff discuss the theatrics of the debt debate in Washington and why debt does matter


Original and transcript available here.

Bio

Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of Super-Imperialism: The Economic Strategy of American Empire (1968 & 2003), Trade, Development and Foreign Debt (1992 & 2009) and of The Myth of Aid (1971). ISLET engages in research regarding domestic and international finance, national income and balance-sheet accounting with regard to real estate, and the economic history of the ancient Near East. Michael acts as an economic advisor to governments worldwide including Iceland, Latvia and China on finance and tax law. Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst where he taught economics from 1973 to 2008. He is currently a Visiting Professor in the Graduate Program in International Affairs of the New School University, New York City. He also teaches classes regularly at the Brecht Forum in Manhattan. Earlier he taught economics at Yale University (1967-1969) and at the City College of the City University of New York (1969-1973). In 1994, he was a Visiting Professor of Economics at the University of Paris (France), I (Sorbonne).

"ALL [NEWS REPORTERS] TALK ABOUT ...IS HOW DO YOU GET THE DEBT DOWN." "THE BATTLE SHOULD BE: HOW DO YOU REEMPLOY 25 MILLION PEOPLE UNEMPLOYED, UNDEREMPLOYED, OR OUT OF THE WORKFORCE ALTOGETHER?" -- DEAN BAKER

  theREALnews

GOP Budget Ends Medicare

Dean Baker: Media is failing to report how radical Republican budget is


Original and transcript available here.

Bio

Dean Baker is co-director of The Center for Economic and Policy Research (CEPR). He is the author of several books including, The United States Since 1980; Social Security: The Phony Crisis (with Mark Weisbrot); and The Benefits of Full Employment (with Jared Bernstein). He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio.

THE RADIATION LEVELS IN JAPAN SHOULD BE VERY MUCH HIGHER THAN THE FALLOUT REACHING THE U.S. SO JUST HOW HIGH ARE THEY IN JAPAN?

Shinjuku Station, Tokyo                                                            Photo credit: the blogger

I discovered that the Japanese Ministry of Economy, Trade and Industry puts out a daily pdf giving the radiation rates in micro-Sieverts per hour by prefecture.

Below I paste in their release for April 21, 2011. The box to the left center gives comparison values of (1) the average radiation in micro-Sieverts that most people everywhere are exposed to in one year's time, (2) the dose received in a normal chest x ray, and (3) the added cosmic ray dose you'd receive on a round trip from New York to Tokyo and back.

So if you were at Shinjuku Station for an hour yesterday, you would have received 0.072 micro-Seiverts. And if you were to stay there for an entire year with no change in dose rate, you'd receive 630 micro-Sieverts, actually less than your typical annual dose from all sources of about 3,000 micro-Sieverts (which might include for example 70, 400, 600, and 2,000 micro-Sieverts per year due respectively to (a) living or working in a concrete building, (b) decay of natural radioactive Potassium-40 in your bones, (c) radioisotopes left over from the atomic bombing of Hiroshima and Nagasaki and subsequent A-bomb tests, and (d) the Radon-222 you might breathe if you spend much time in a basement or mine).

If you lived in Fukushima Precinct (presumably outside the evacuation zone) yesterday you'd have been receiving 1.75 micro-Sieverts per hour, and you would accumulate 15,330 micro-Sieverts if you stayed there for a year and nothing changed. By comparison, the maximum yearly dose allowed for U.S. workers in radiation environments is 50,000 micro-Sieverts. Here is a handy chart in case you'd like to look up some of these numbers yourself.

Now all you have to do now is to realize that the fallout in the U.S. is undoubtedly diluted 10 to 1,000 times compared to Fukushima Prefecture. So put away your potassium iodide pills.

WORRIED ABOUT NUCLEAR FALLOUT FROM JAPAN? WELL, LOOK AT ALL THE FALLOUTS THAT MANY OF US OLDER FOLKS HAVE SURVIVED IN GOOD HEALTH.

Blogger's Note: While large doses of nuclear radiations are certainly dangerous, go here to see evidence that small radiation doses may actually be beneficial. Although we still lack a statistical sense of just how large a dose humans can tolerate without a high probability of contracting some form of cancer, I am among the many persons born in 1945 or earlier who survived in excellent health the fallouts from the 2053 events you will watch unfold below.

---

Original here.

A Time-Lapse Map of Every Nuclear Explosion Since 1945 - by Isao Hashimoto

Here's the comment posted with this video on YouTube by the person who uploaded it:

Uploaded by aConcernedHuman on Oct 24, 2010

Japanese artist Isao Hashimoto has created a beautiful, undeniably scary time-lapse map of the 2053 nuclear explosions which have taken place between 1945 and 1998, beginning with the Manhattan Project's "Trinity" test near Los Alamos and concluding with Pakistan's nuclear tests in May of 1998. This leaves out North Korea's two alleged nuclear tests in this past decade (the legitimacy of both of which is not 100% clear).

Each nation gets a blip and a flashing dot on the map whenever they detonate a nuclear weapon, with a running tally kept on the top and bottom bars of the screen. Hashimoto, who began the project in 2003, says that he created it with the goal of showing"the fear and folly of nuclear weapons." It starts really slow — if you want to see real action, skip ahead to 1962 or so — but the buildup becomes overwhelming.

http://www.ctbto.org/specials/1945-1998-by-isao-hashimoto/

Multimedia artwork
"2053" - This is the number of nuclear explosions conducted in various parts of the globe.*
Profile of the artist: Isao HASHIMOTO
Born in Kumamoto prefecture, Japan in 1959.
Worked for 17 years in financial industry as a foreign exchange dealer. Studied at Department of Arts, Policy and Management of Musashino Art University, Tokyo.
Currently working for Lalique Museum, Hakone, Japan as a curator.
Created artwork series expressing, in the artist's view, "the fear and the folly of nuclear weapons":
"1945-1998" © 2003
"Overkilled"
"The Names of Experiments"
About "1945-1998" ©2003
"This piece of work is a bird's eye view of the history by scaling down a month length of time into one second. No letter is used for equal messaging to all viewers without language barrier. The blinking light, sound and the numbers on the world map show when, where and how many experiments each country have conducted. I created this work for the means of an interface to the people who are yet to know of the extremely grave, but present problem of the world."
Contact the artist:
Should you have any query regarding this artwork, please contact e-mail address below:
hashi123@amy.hi-ho.ne.jp
* The number excludes both tests by North Korea (October 2006 and May 2009).

--------------------------------------------------------------
[Comment by Fubar and Grill originator, Mark Smith] Okay, given that our own governments have been nuking their own citizens for decades, why should they be concerned about nuclear power plant meltdowns? Why should anyone expect them to care about human life?

Each nuclear test increased the radiation exposure of everyone on the planet, none of whom could prove that cancers were caused by nukes. If we had accurate statistics available, I'm sure that increased childhood and other cancers would follow every nuke test. That's one video we'll never see because the statistics are hidden.

--------------------------------------------------------------
[Blogger's comment] My K-12 schooling spanned the years 1942 to 1956 and I cannot remember a single classmate dying of cancer -- or any other cause. Being a particularly sensitive child, I surely would have remembered any and all such events. In college I was profoundly shocked by the death of a high school mate and fraternity brother in a motorcycle accident and disturbed by the sudden death of student I hardly knew. Of course, my story alone is not statistical evidence, but surely some epidemiologist somewhere has collected sufficient data to draw statistical conclusions.  Reader feedback on any such studies would be most welcome.

"The ForeclosureGate scandal poses a threat to Wall Street, the big banks, and the political establishment. If the public ever gets a complete picture of the personal, financial, and legal assault on citizens at their most vulnerable, the outrage will be endless." - Michael Collins

Beyond ForeclosureGate - It Gets Uglier

Submitted by Michael Collins on Wed, 04/20/2011 - 21:14

Michael Collins

The ForeclosureGate scandal poses a threat to Wall Street, the big banks, and the political establishment. If the public ever gets a complete picture of the personal, financial, and legal assault on citizens at their most vulnerable, the outrage will be endless. (Image)

Foreclosure practices lift the veil on a broader set of interlocking efforts to exploit those hardest hit by the endless economic hard times, citizens who become financially desperate due medical conditions. A 2007 study found that medical expenses or income losses related to medical crises among bankruptcy filers or family members triggered 62% of bankruptcies. There is no underground conspiracy. The facts are in plain sight.

ForeclosureGate represents the sum total illegal and unethical lending and collections activities during the real estate bubble. It continues today. Law professor and law school dean Christopher L. Peterson describes the contractual language for the sixty million contracts between borrowers and lenders as fictional since the boilerplate language names a universal surrogate as creditor (Mortgage Electronic Registration System), not the actual creditor. Other aspects of ForeclosureGate harmed homeowners but the contractual problems that the lenders created on their own pose the greatest threats.

When the Massachusetts Supreme Court upheld a lower court ruling that the actual creditor must named in the mortgage agreement (a legal requirement that the banks forgot to meet in their contracts), there was consternation on Wall Street. What would happen if a class action lawsuit challenged these flawed mortgages? Isn't the Massachusetts decision the latest of many attacking the legal basis of the shoddy business practices and boilerplate industry contracts? What if homeowners started walking away from their underwater mortgages based on the legally flawed contracts? If there were a viable prospect of a class action suit against financial institutions threatening to invalidate these contracts, wouldn't that crash the stock values of the big banks and some Wall Street firms?

The big banks and their partners on Wall Street need a preemptive strike to derail the legal process that threatens their existence. They may get a temporary reprieve through pending consent decrees from the United States Department of Justice and consortia of state attorney's general. If that protection fails, big money will make every effort to buy a bill from Congress that absolves them retroactively, en masse. The consent decree might cost them a few billion dollars. That's much better than owing the trillions in lost home values due to their contrived real estate bubble and stork market crash.

As bad as this is, it gets worse.

Beyond ForeclosureGate

The surface scandal is about fraudulent business practices and a systematic assault on homeowners by lenders, servicers, and the legal system. A much broader picture must be viewed in order to understand the utter contempt that the ruling elite has toward citizens and the depraved tactics used to express that contempt, all to serve endless desire to accumulate more money and power.

The set up began when we heard about the ownership society in the 2004 presidential election. President Bush defined ownership as taking the government out of our lives so more people could own homes and control their destinies. The foundation was home ownership. As Bush said on the campaign trail, "We're creating a home -- 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" October 2, 2004.

Then Federal Reserve Chairman Alan Greenspan was uncharacteristically coherent when he laid the foundation for the swindle earlier that year. Greenspan told the Credit Union National Association that the fixed rate mortgage was "an expensive way of financing a home." He was clear when he advised lenders that, "consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage." February 2, 2004. Home equity through exotic mortgage products fueled consumption and became the new "margin account."

The Chairman of the Federal Reserve and the president ratified the real estate bubble, already underway at the time, as political and financial doctrine. The advice was clear. Get an ARM, own your piece of the American Dream and spend that equity. Housing prices never go down, right?

Freddie Mack, Fannie Mae, Wall Street and the big banks provided the back room. Mortgage Backed Securities (MBS) derivatives were vastly expanded. This made it easy for more homebuyers to qualify for mortgages they might not otherwise get, credit standards dropped. Those with good credit saw an array of tantalizing zero interest loans and other mortgage products to maximize available cash and feed the stock market.

It was all good until it wasn't.

The real scandal is the unfathomable loss of wealth and opportunities by the vast majority of citizens and the vicious attack on the most vulnerable citizens as a part that process. The attack continues and is worthy of review.

Foreclosure and Bankruptcy

Foreclosure is the down side of the ownership society. When you're sold a bill of goods, a property that you were told you were qualified to buy, and you lose it, you are evicted from ownership island.

Before Congress passed the 2005 bankruptcy reform act, homeowners could avert foreclosure in many states by filing for bankruptcy. Not just anyone could qualify. The process of qualifying was difficult and, oftentimes humiliating. But homes were saved and families were preserved with a chance to start over.

A myth emerged of the bankruptcy abuser, a high-class sort of welfare cheat. These reckless people worked the system to rack up large debts that were subsequently wiped clean through bankruptcy. The alleged abuse of the system became the excuse for a major overhaul of bankruptcy law. The legislation passed the Senate with 74 yes votes and soon became law.

The changes since the 2005 legislation provide substantial benefits to creditors. Morgan et al summarized the direct benefits to creditors in a forthcoming publication in the New York Fed's Economic Policy Review. Before bankruptcy reform, the filer of a bankruptcy claim used to determine Chapter 7 or 13 filing status. That makes a difference in the amount and type of debt relief. The legislation imposes means test that determines precisely which chapter (7 or 13) filers must use. Significantly, chanter 13 filers retain more debt from medical and other unsecured credit.

Legal costs ranged from $600 to $1500 before bankruptcy reform. Legal fees now range between $2800 and $3700. Previously, there was no requirement for credit counseling prior to filing.

Filers must now document approved credit counseling six months before filing or face dismissal of their case (Morgan et al.). This counseling requirement can lead to unwarranted dismissals or inordinate delays in filing at a time when filers need relief.

Under the old law, only bankruptcy trustees appointed by the federal court could file claims of abuse by the filer. Under the new legislation, anyone can file a claim of bankruptcy abuse, which can lead to a dismissal of the cause. This is a huge benefit to lenders who wanted to keep citizens from realizing debt relief.

The Real Benefit for Big Money - Delayed Bankruptcy Filings

The new law makes it harder to file a claim, doubles costs, and gives the creditors a say in claiming fraud on the part of those who file claims. Significant delays in filing for bankruptcy became the norm.

From Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors, Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008

Time is money for loan servicers. A long delay before a bankruptcy filing, allows servicers the opportunity to add on special fees, many of which the borrower can't comprehend. One thorough study showed that many of these fees were questionable. The longer it takes, the greater the revenue opportunities. Delay benefits creditors since loan payments continue at their original level.

What happened to those big spending, reckless bankruptcy abusers that were the rationale for the 2005 reforms? The following graph from the Consumer Bankruptcy Project shows that there is virtually no difference between the incomes of filers before and after bankruptcy reform. The majority of filers made between ten and forty thousand dollars a year before reform. That has remained virtually unchanged. The big spending abusers were and remain a mythical construct; the centerpiece of a diversion strategy to keep attention away from this never-ending gift to creditors.

 From Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors, Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008

These newly empowered creditors were the same creditors who hired debt collectors to try and frighten people out of their filings. A major study found that 24% of filers reported that debt collectors told deliberate lies to avoid bankruptcy. They heard that filing for bankruptcy would lead to jail, job loss, or an IRS audit. Some were told that it was illegal to file for bankruptcy. Lawless, et al. Did the Bankruptcy Reform Fail? An Empirical Study, October 2008

The deck was stacked early against citizens and protection from creditors disappeared under the new law. The creditors, who so recklessly precipitated the economic collapse, came out on top. They were free to profit in any way they could from their new market.

What Causes Bankruptcy - Financial Shocks from Medical Expenses

Prior to the new law, the major cause of bankruptcy stemmed from medical care expenses and the resulting disruptions to families. Rather than the mythical big spender contrived by Congress, for nearly half of filers, major medical expenses, family tragedies, were the tipping point to a loss of financial viability.

The Consumer Bankruptcy Project audited a representative sample of bankruptcy filers in 2001. The audit found that 46% cited a "major medical cause" for bankruptcy. This includes the direct cost of uncovered medical bills for major illness or injury, lost work due to the same, and the need to mortgage the family home to cover medical costs.

Did Congress review this data? Were they intent on making it harder to file bankruptcy as a result of illness? When bankruptcy is delayed or simply not attainable, less money is available for needed medical care. Were the members supporting bankruptcy reform indifferent to the suffering compounded by their thoughtless legislation?

The situation is worse now. A comprehensive survey of those who filed bankruptcy in 2007 showed the increasing desperation of those faced with medical problems. When individuals or family members are in dire need of medical care, do they just sit home and suffer?

 From Medical Bankruptcy in the United States, 2007: Results of a National Study, Himmelstein et al., American Journal of Medicine, 2009:04

Nearly two thirds of bankruptcies result from medical care that people can't afford or losses in income from medically required leave. Where are the big spending cheats?

Nihilists at the Helm

The big banks, Wall Street, the politicians they own, and the Federal Reserve Board created the real estate bubble in bad faith.

They knew or should have known:

• that the real estate bubble was unsustainable;
• when the bubble deflated, many homeowners would hit a financial wall; and, that
• when homeowners hit the wall, to maintain viability for their families, they would need relief of some sort.

What did the nihilists of the financial elite and their hit men walking the halls of power do with all this knowledge? They went ahead with the real estate bubble, fostered it, deregulated meaningful controls on the financial industry, and crafted a new bankruptcy law to stick it to filers. They knew or should have know that data from 2001 showed a very high rate of filings due to the financial stress of medical care. Did they care? Do they care now? Has anything been done to correct this injustice?

While citizens suffer in financial distress, often due to illness, at the behest of influential bankers and investors, the Department of Justice crafts a settlement with lenders and their representatives to relieve them of the stern justice due for their specific crimes and the larger horrors they visit upon citizens, all in the name of short term profit.

We are most emphatically not a nation of laws. We are a nation where the law is used by a very few for their own purposes, without regard for the well being of the nation or its citizens. We are a lawless nation.

END

 This article may be reproduced entirely or in part with attribution of authorship and a link to this article.

In Economic Populist, also see:
ForeclosureGate Deal - The Mandatory Cover Up by Michael Collins
The Arc of Justice - The Ibanez Case Ruling by Numerian
An Update on the Foreclosure Mill by Robert Oak
Is Residential Real Estate a Ticking Time Bomb? By Robert Oak