News America is facing a financial time bomb, and the clock is winding down.  Truth in 2012 is dedicated to spreading the word, and in the process, we're collecting the latest news on our troubling financial situation.  Have an article or study we haven't seen?  Send it our way at info@truthin2012.org. The Ties That Bond—and Don't 12/15/2011 If Greece could push up Italy's borrowing costs, could intensifying market doubts about the credit-worthiness of Illinois or Puerto Rico (which has more debt relative to the size of its economy than any state) do the same for California? Congress draw attention to public pension gaps 12/12/2011 Republicans in Congress on Thursday sought to shift attention back to public pension shortfalls, with estimates of the total deficit ranging from $600 billion up to $3 trillion. New London, CT weighs in: Here's a list we don't want to be a part of 12/5/2011 Connecticut, along with four other states, are dubbed the "Bottom 5 Sinkhole States" in the Institute for Truth in Accounting's new report, "The Financial State of the States". Jefferson County, Alabama Muni Market Sounds Alert 11/30/2011 Lawyers for the county, which in November filed for what could become the largest municipal bankruptcy in U.S. history, are arguing that holders of $3 billion in debt used to finance a sewer project should be forced to wait for their money. Pension reform: A national issue, now cities wading in 11/28/2011 New accounting rules — and the propsect of huge retirement liabilities showing up on local government balance sheets — are helping spur a new constituency to agitate for pension reform in South Carolina. Cities also have a motive to weigh in. Money slated for health law gets detoured: lawmakers tap fund three times in one year 11/27/2011 In cash-strapped Washington, President Obama’s $1 trillion health care law is presenting a tempting target for lawmakers seeking funds for other projects, as Congress last week raided the health care piggy bank for the third time in less than a year. Sheila Weinberg interview on the Illinois Channel 11/22/2011 Springfield-based Illinois Channel covers public policy events taking place across the state. One-on-one interview with Weinberg about the Institute's efforts to create accurate accounting of government spending. CNBC: Truth in Accounting reports Illinois in the 48th worse financial position of the 50 states 11/20/2011 National press takes notice of Institute's "Financial State of the States" Report. Editorial: Supercommittee should think about cutting defense spending 11/16/2011 New York Times columnist proposes the government should stop reimbursing the costs of pensions and other retirement benefits at defense contractors, at an estimated saving of $30 billion over 10 years. Deficit super committee could gut national parks budget 11/11/2011 National Park Service funding could potentially be gutted if the congressional super committee doesn’t find those elusive $1.3 trillion in budget cuts this month. U. S. deficit reduction talks intensify 10/22/2011 Hard bargaining by a special U.S. deficit-reduction panel is entering a more intensive stage, sources in Congress say. First Business Network coverage of Truth in Accounting speaker event: Interviews of Senator Mark Kirk, Congressman Mike Quigley and Hon. David M. Walker 10/20/2011 First Business News video coverage of Truth in Accounting/Chicagoland Chamber of Commerce luncheon event and speaker interviews. View Sheila Weinberg's presentation before the Hawaii Legislature 10/19/2011 Weinberg was one of four people who testified before the House and Senate members, organized by House Minority Leader Gene Ward. Retired exec leads fight for changes to Illinois pension system 10/9/2011 "This place was going down in flames," Farrell said, "and the unfunded liability five years ago was only about half what it is today. The more we looked at the numbers, the more frightened we became for the state." Truth In Accounting Coming to Hawaii Oct 10-12 10/3/2011 Sheila Weinberg will be speaking in Hawaii on “Government Accounting: The Seen and the Unseen -- What Needs to be Done?” A chilling visualization of total U.S. debt 9/21/2011 Want to see what $114.5 trillion in U.S. unfunded liabilities really looks like? Sheila Weinberg discusses the true financial condition of our federal and state government on nationally syndicated Red Eye Radio 9/14/2011 Sheila Weinberg weighs in on Smart Money Magazine's "10 Things Pension Plans Won't Tell You." 9/12/2011 Yes, pension plans still exist. And some of them toy with taxpayer money. Walker Joins Truth in Accounting Advisory Board 9/6/2011 Hon. David M. Walker, CAI Founder and CEO, and former Comptroller General of the United States, becomes Institute's first Advisory Board member. CBO Projects Third Largest Deficit in the Past 65 Years 9/2/2011 'Economic recovery is likely to remain sluggish and recent turmoil in financial markets threatens to prolong the slump.' Alan Kreuger's Interesting Statistic 8/30/2011 The president's new economic shaman once thought that the best measure of employment is the employment-to-population ratio. That would conflict with government's natural desire to show a higher employment rates by ignoring discouraged workers. Democracy Strikes! 8/27/2011 Illinois has more units of government than any other state. That may be one of the reasons it's in such fiscal trouble but here's a story of one township's government being struck by direct democracy. Well, not really... 8/26/2011 Republican governors face a choice to fall into line over the first impositions of Obamacare. Even though they roundly condenm the program, more of them are taking the federal money. Another Entitlement Looming? 8/25/2011 After bailing out the government-sponsored mortgage giants, news arrives that the administration is considering a general refinance of all government-backed mortgages. How much more tax money would the feds have to put into Fannie without that income? India Shows The Fallacy of 'Stimulus' 8/23/2011 India is going down the same road as we tried over the last several years. Apparently, it's not working out for them. As the government considers QE3, we might look at other's experiences as well as our own before we add another trillion to our debt. Social Security Disability Fund Solvency Under Pressure 8/22/2011 Disability claims are rising as older workers are laid off and cannot find new jobs. Pressure on Social Security's disability system is so great it's taking two years to resolve cases. Estimates are that SSA will not be able to pay full claims by 2017. 'Knock-on Effects' of the U.S. Downgrade 8/20/2011 The downgrade of U.S. debt has caused downgrades of municipal pension funds holding treasury securities. But some towns are getting 'super downgrades'--as severe as four notches--when rating agencies re-examine the credit quality of municipalities. Chavez Challenges 'Dictatorship of the Dollar" 8/19/2011 Gold's remarkable rise is the mirror of the dollar's decline. The international community is looking for alternatives to the dollar as the world's reserve currency, a disaster for us. Enemies and early adopters are making moves to torpedo the dollar. Reaching Hawaii 8/16/2011 The Institute's report on the fiscal situation in Hawaii gets attention. States' Accounting Trickery Revealed By The Institute 8/15/2011 A new report from the Institute reveals how states use accounting tricks to evade their balanced budget requirements. Find out if your state is one of the 'sinkholes'or one of the 'sunshine' states. China's Costs Increasing 8/14/2011 The Institute is concerned about our balance of payments so news of rising Chinese manufacturing costs is of interest. As costs force manufacturing to move to other nations, fewer dollars will be piling up in The Middle Kingdom. What Does 'Fiscalize' Mean? 8/12/2011 Apparently, it's a fancy word for 'bailout' when applied to banks. According to some, U.S. equity markets have been volitile because of European bank problems so it's interesting to see the extent of the problem 'over there'. It's not a pretty sight. Municipal Debt Ratings On Bubble 8/11/2011 Rumors swirled that 'thousands' of municipalities would get bad news from Standard&Poor's. That's been put off for a while but with the U.S. downgrade and the failure of the ratings agencies in the melt-down, they are looking to restore their reputation. More Questions Than Answers 8/11/2011 The government will rent a quarter-million foreclosed homes. If the figure is accurate, it would have been much cheaper to spend $1,000/month to assist homeowners rather than foreclose? It would cost $3 bil/yr. rather than $200 bil we spent on Fannie. Fight Coming To A Head In Wisconsin 8/9/2011 The recall elections are upon us as millions pour into the dairy state to change the majority in the state senate. Why this matters to the rest of the US is detailed here. Fallout From The Downgrade 8/8/2011 With the downgrade of U.S. debt, it was only a matter of time before the agencies and departments which depend on the 'full faith and credit' of the U.S. were also downgraded. It only took one business day. States Not Waiting for the Feds 8/7/2011 Withdrawal symptoms are popping up in states as they face withdrawal of narcotic federal money. Many are taking steps to improve their economies but one wonders how the entitled classes will react to new laws and austerities. Missing The Big Picture 8/5/2011 The media is full of stories about the nation's debt now equaling our GDP. Too bad the pundits and reporters missed another $60 trillion in unfunded liabilities, 4X the debt ceiling. But you can hardly blame them--the government ignores these debts, too. Two Views on the Debt Deal 8/4/2011 The day after the ceiling was raised, the Treasury borrowed nearly a quarter-trillion in new debt. Here are two views of varying credibility but one wonders why it should take a decade to balance the budget. "Old Washington" Saves The Day? 8/2/2011 The Washington Post finds that the washington establishment 'saved' President Obama and the Tea Party by doing the debt deal. Isn't 'Old Washington' how we got into this problem in the first place? Oh, Canada! 7/31/2011 Canada is feeling quite good about shrinking their once very large federal government. Reform has made the country much more competitive and their currency stronger. One problem is nationalized health--too expensive and low service levels. Truthful Accounting Should Be Part of Debt Debate 7/29/2011 Here's an article that appeared in The American Thinker yesterday. Make sure you check the authors. What Does A Trillion Look Like? 7/27/2011 The amounts being argued in the debt limit debate are hard to fathom but here's a good piece showing what our debts would look like if we piled up $100 bills. What About Personal Debt? 7/26/2011 The Institute released it's Fifty State study of state's true financial positions but what about the debt load families are carrying? Here's a peek. The World Waits For Word From D.C. 7/25/2011 As congressional leaders apparently concluded that the president and the treasury secretary aren't part of the solution, they began meeting on their own. Meantime, the world waits for some solution and if it includes a more realistic view of our debt. What Happened on Friday Night? 7/23/2011 From what appeared to be a promising prospect of a solution to the debt ceiling, the principals moved to name calling. What's most troubling is that Moody's may downgrade even if there is a deal. A Budget Picture Before The SHS Reunion 7/22/2011 Here's an excellent graphic that shows the various debt plans that Congress is considering. News that the Senate has rejected the Cut, Cap and Balance plan may elimninate one of the options. The Unexpected Effect of the Debt Crisis 7/21/2011 Here's an NYT article we spied in Governing.com. One wonders how much the Maryland and Virginia economy is dependent on taxpayers in Montana or Alabama. Bill Clinton Advises Congressional Defiance 7/19/2011 The former president says the debt ceiling has no effect and the current president should just borrow what he wants. If this happens, one wonders how the vote on the Balanced Budget Amendment would come out. Trust Fund Blues 7/15/2011 One wise person we know characterizes the Social Security Trust Fund saying 'It's not a fund and you can't trust it'. The debt crisis is the reason more Americans will come to this opinion. Debt Ceiling Battle Goes On 7/14/2011 Robert Reich, a former Clinton cabinet secretary, weighs in on the McConnell plan to fix the impasse. The Institute is concerned with all our debts and that portion controlled by the ceiling is an important component. Where's The Social Security Trust Fund? 7/13/2011 Politicians tell us that Social Security is solvent because of the 'Trust Fund'. Yet, when asked about payments after August 3, the president says he can't guarantee them. That begs the question about tapping the trust fund. He can't--it doesn't exist. A New Mortgage Crisis Brewing? 7/11/2011 Citing 'racism', the attorney general is pursuing a questionable policy by forcing banks to loan to customers who do not meet traditional credit standards. Deregulating the natural laws of credit via 'Affordable Housing' brought us the 2008 meltdown. The Institute Hails A Major Victory 7/11/2011 The Government Accounting Standards Board has proposed nearly all the Institute's recommendations for improving state and local accounting. If adopted, we'll see much more transparent and useful financial statements in the future. Personal versus Government Credit 7/8/2011 Here's one author's reaons he is personally giving up on credit. Inspiring reading for the budgeteers as they debate the debt ceiling this weekend. An Independence Day Quiz 7/5/2011 Not much to report after the holiday weekend so here's something fun. Attention politicians--especially those who are having some trouble with history--why not revisit what indictments compelled a revolution 235 years ago? The reasons are listed. New Twist On Debt Ceiling Debate 7/3/2011 Does the 14th Amendment moot the debt ceiling debate? An interesting question on the July 4th weekend--does the Constitutional requirement that the debt of the United States 'not be questioned' mean the executive branch can borrow as much as they want? Clinton's 'Surpluses' 6/30/2011 The media lets the former president get away with the claim he ran surpluses, again. In his term, U.S. debt increased 37% to $5.7 trillion from $4.2 trillion, according to the Treasury. Better than most but still not a net surplus. Here's his new plan. PGPF's Analysis Of Social Security Trustee's Report 6/29/2011 The Social Security Administration now takes in less than it pays in benefits. This was thought to be temporary but thinking has changed. SSA is now in permanent deficit. This is an excellent overview of the situation at the largest federal entitlement. Compromise On Medicare Possible? 6/29/2011 Medicare is one of the two entitlements to which Americans actually feel entitled. Unfortunately, medical inflation and an aging population are driving the program to bankruptcy. Here's news that two senators are taking notice and working towards a fix. Considering The Moral Problem Of Default 6/28/2011 What happens to the neighborhood environment when individuals walk away from their 'underwater' mortgages? Is there a similar effect when countries default in their 'neighborhood'? That question faces Europe over Greece and on streets all over the U.S. Local Governments In Trouble...In Chna 6/27/2011 China has enjoyed rising economic conditions for the past generation leading local governments to borrow against the future. Turns out Chinese local governments aren't much more responsible than they are here. At least they invest in infrastructure. Biden's Plan For Debt 6/26/2011 The vice president can't seem to move beyond class warfare. NY Lt. Gov Blames Accounting For Fiscal Distress 6/25/2011 Richard Ravitch says weaknesses in governmental accounting camouflaged mounting state deficits. We could not agree more. Geithner Tells The Truth 6/24/2011 N.C. Congresswoman Renee Ellmers asks the Secretary about the plan to tax small business income. Geithner responds that these taxes must rise so government won't shrink. A honest answer and we wonder if he's beginning to understand debt is not the answer. The Practical Aspects of Federalism 6/22/2011 Local government will soon be required to withhold taxes from contractor payments then send the money to the IRS. This includes credit card purchases at gas stations. States are chaffing and want out. It will be interesting to see who wins this battle. Bipartisan Progress in New Jersey 6/17/2011 Governor Christie and the New Jersey legislature take on the pension problem. Compromise On Debt Ceiling? 6/14/2011 Is there a compromise on the debt ceiling coming? Apparently, there is a renewed effort to fix the problem. It pits one side demanding spending cuts against the other wanting to tax a bigger share of the economy. The Wages Of Financial Market Regulation 6/12/2011 The financial industry doesn't like federal regulations headed their way and are doing their best to avoid them. Does that mean running better operations? No, it's much cheaper to lobby congress for the waiver known as being 'unimportant'. A Rock And A Hard Place 6/10/2011 Chinese ratings agencies say the US is defaulting on its debts by inflation. US rating agencies say they will downgrade US Debt without an increase in the debt ceiling. Do we lose either way? Chinese Ratings Agency Accuses US of 'Default' 6/10/2011 This Chinese sovreign debt rating agency says the decline in the dollar's value is a form of default. By printing so many dollars, the wealth of those holding them has declined. That is probably why the Chinese have massively reduced new dollar assets. Cass Sunstein In Detroit 6/8/2011 After years of corporate resistance, the chairman on GM is urging higher gas taxes to 'nudge' consumers into smaller cars. Nudge is Sunstein's strategy but what about GM shareholders? GM doesn't do well when consumers buy cars as appliances, not dreams. IFTA In The News 6/8/2011 It is always a thrill to be quoted and even more so to be on page 1 of USA Today. Institute founder Sheila Weinberg is the sole expert quoted in the article. To See Ourselves As Others Do 6/7/2011 The foreign press has it way with American prospects. The aphorism 'To see ourselves as others see us' has never been truer and it is something to which we should pay attention. While we would disagree that the budget was in surplus, the point remains. Natural Gas To Help With Balance Of Payments? 6/6/2011 Wvery day America buys 10-12 million barrels of foreign oil. At $100+/- per barrel, this adds up and contributes to the glut of dollars the world is beginning to suspect. Could natural gas be an effective substitute for oil from overseas? Uninsurables Not Showing Up 6/4/2011 Obamacare created high risk pools for 'uninsurable' Americans as its first benefit. Projected to attract 200-400,000, it has only signed up 18,000, so far. It's not often that a federal entitlement goes unsubscribed by 90-95%. Fighting The Last War? 6/3/2011 Military officers are often accused of 'fighting the last war' which is code for myopia about current conditions. Why should economists be any different? Here Paul Krugman opines we should fight the double dip recession of 1937 with the same tools. House Rejects Simple Debt Ceiling Increase 6/1/2011 The House's overwhelming rejection of an increase to the debt ceiling shows Congress is 'getting it'...at least in the abstract. The real test of their will to make changes will come when spending restrictions are attached to increasing the limit. Insight From The Grey Lady 5/29/2011 The New York Times grits its teeth and faces the fact that the U.S. Senate has not produced a budget in two years. During a time when spending and deficits have become an existential threat to the Republic, the Senate's leaders show cowardice. Illinois Treasurer Stands Up To Debt 5/26/2011 Il. Treasurer Dan Rutherford showed wisdom and political courage when he called debt an addiction and threatened to call bond underwriters with the truth. Illinois,like others, uses debt to 'balance' the budget because of deficient accounting standards. The Physicality of America's Debt 5/23/2011 Ever wonder how big a stack America's debt would be? Here's an answer but it's doesn't account for unfunded liabilities. That's not truthful; to be correct, the pile would ave to be at least five times higher. What Is Pakistan Doing With Our Aid? 5/20/2011 Many American blame 'foreign aid' as a big part of our debt problem. Truthfully, aid isn't a big deal but we are sending lots of money to Pakistan. They are using it to build Chinese fighter plane factories and weapons capable nuclear reactors. Unemployment Versus The Deficit 5/18/2011 Has the deficit replaced unemployment as the cause celebre in the mainstream media? This article also argues that the average duration of unemployment has increased but there is no mention of unemployment insurance's expanding duration. Misconceptions About China 5/17/2011 The China Daily reports TIME Magazine's opinion on the relationship between America and China's economy. There are four areas they think are misconceived including jobs, currency, capitalism and trajectory. What about credit? Gov. Brown Can't Wait For The Voters 5/16/2011 New governor Jerry Brown promised to ask voters to impose new taxes. The severity of California's fiscal situation means he will try to impose taxes first, and ask permission later. Will The Debt Bomb Detonate Before We Defuse It? 5/12/2011 Stanford graduate students working with David Walker find that the U.S. is running out of time to fix our debt problem. They say we have three years at the most. But it's not all bad news; they give examples of countries that fixed their debt problems. What Happens When Governments Can't Borrow 5/11/2011 Unable to borrow, Ireland has borrowed the Argentine model to put the touch on private pensions. The congress has already held hearing on using the same strategy here. If you have a 401k...watch out. The View From The Left Coast 5/9/2011 The recently sold Huffington Post's writers opine on the remedy for our fiscal woes. The authors paint a bleak picture about our options Truth In Accounting and Comeback America Examine Connecticut 5/8/2011 Our friend David Walker takes a clear-eyed view of Connecticut's financial condition using the Institute's data on the Nutmeg state. Middle Class Troubles 5/7/2011 The living standards of the middle class is under pressure as we deal with the continuing recession. The question of whether real middle class jobs will come back anytime soon...if ever. The Futility Of Contradicting Markets 5/4/2011 The government often operates programs whose goals would not be produced by markets. One example is the housing market where the billions spent to support prices has evidently failed. The result is even more debt for future generations to repay. Critical Thinking Required 5/3/2011 The debate about whether to address our fiscal problems with more taxes or less spending is joined by this article. It takse some critical thinking about how the US defines taxable income and who is responsible. A Happy Day For The US 5/2/2011 The news of Usama Bin Laden's death at the hands of the U.S. Navy is on our mind today. Brave men, superbly prepared show us that we can succeed at what we set out to do--abroad and here. Democrats want spending controls with debt ceiling 4/29/2011 Quickly following the vote in the Bay State, congressmen and senators are balking at raising the debt limit without some spending controls. Mass. House Vote Spotlights The Problem With Public Sector Unions 4/28/2011 With Democrats leading, the Bay State House voted to strip municipal employees of some health care bargaining privileges. The reaction of the union chief shows why public employee unions have been so successful in bargaining with the states. Shell Swidled? 4/26/2011 The U.S. leased a tract for oil drilling but the E.P.A. has denied permission to use it on a flimsy excuse. The E.P.A.'s curious ruling sends signals we'll be sending more dollars to foreign producers and it puts pressure on the dollar's reserve status. Defined Benefits On The Way Out In The Public Sector 4/25/2011 Michael Barone predicts the end of defined benefit plans in the public sector as too expensive. Arizona Makes Progress On Public Pensions 4/23/2011 Arizona is one of the first states to face the reality of public pension obligations. It prescribes bigger payments by beneficiaries and stops some abuses like double-dipping. Clash Of Federalism 4/22/2011 The concept of what FDR called the 'laboratories of democracy' is under assault by today's federal government. Apparently, the Feds are trying to keep Boeing from moving jobs from one state to another the company believes will be more hospitable. A Shocking Statistic 4/21/2011 Almost six of ten Americans now receive at least one federal, cash benefit. These benefits cost $2.3 trillion, annually. The trouble is, the government only collects $2.2 trillion in taxes! An Asutue Chronology of Debt Proposals 4/20/2011 The huge amount of news on the debt crisis and the potential downgrade of U.S. debt is often confusing. Here's a concise chronology of the major thrusts and parries in Washington. What About Reserve Currency Status? 4/19/2011 In an article that completely ignores the effect on the dollar's reserve status, The New York Times reports S&P's lowering of the USA's outlook. Investor's Business Daily wonders if ratings agencies are competent and topical. President Hits Tax 'Expenditures' 4/18/2011 President Obama said he's going after 'tax expenditures'. These are credits the government grants to incentivise certain economic activity that would not otherwise occur. Here's an example of one such credit. A Talley Of Where Your Taxes Go 4/17/2011 Here's a well-meaning but misleading guide to how taxes are allocated to various governmental programs. It is misleading because it does not include the total costs of these programs and debt that supports them. The feds borrow 40 cents per dollar spent. Illinois Notices Pension 'Spiking' 4/16/2011 Illinois and its cities suffer from huge unfunded pension obligations. Late career pay 'spiking' can raise a 57-year old retiree's pensions by 50%, to $167K, according to this article. If typical, no wonder the Land of Lincoln is so fiscally vexed. Changing Direction? 4/15/2011 The House of Representatives has passed the Republican plan for slowing the spending. Estimates are that this vote will save $6 trillion over the next decade. That's all of 10% of the problem we face but, at least it's a change in direction. US Lacks 'Credibility" On Debt 4/13/2011 On the morning of President Obama's speech on the US fiscal situation, the IMF says the U.S. does not have a believable strategy for dealing with its debt. In a related story, the 'BRICs' and South Africa are holding economic talks without the U.S. Presidential Advisor Endorses Ryan Plan? 4/12/2011 David Plouffe, the president's political advisor, is getting awfully close to agreeing that entitlements must be reformed. When will his economic advisors come to the same conclusion in public? What Does 'Full Faith and Credit' Mean? 4/11/2011 Iceland's voters reject a plan to compensate the UK and the Netherlands for helping Iceland through the financial hot water in 2008. What will happen in the credit markets when nations vote on whether to pay their debts? President Obama Plans Big Cuts 4/10/2011 Fresh from last week's battle of the budget, the president plans to announce big spending cuts--and new tax increases--this week. Dr. Sowell on Political Math 4/8/2011 The good doctor comments on the character of politicians and the prospects for change should a balanced budget amendment be ratified. States Drowning In Red Ink 4/6/2011 While this isn't news to regular visitors, it is interesting to see that the media is taking notice. Pressure is building for a national confrontation with the burden of entitlements. Rep. Paul Ryan's Prescription 4/5/2011 The Wisconsin republican outlines his plan for changing the trajectory of federal spending. This is a significant challenge to the vast expansion of government that has become the status quo of Washington. Entitlements and Social Security 4/4/2011 Here are two stories on the Social Security situation. The folks on Capitol Hill don't seem to see the issue the same way the authors do. California Pension Administrators Fooling Themselves? 4/3/2011 Pension administrators count on investment returns to help meet their obligations to beneficiaries. What rate they assume is critical to the amount that must be contributed each year to be prepared to pay. More Government Workers Than Manufacturing Jobs 4/1/2011 Stephen Moore observes that there are more Americans working for government than making things. On the other hand, manufacturing has had great productivity gains that have been completely absent in the public sector. A Manufacturing Nation, Not A Nation of Manufacturers? 4/1/2011 A nearby article bemoans the number of Americans working in manufacturing but this article shows the goods manufactured in America at a 7 year high. Actually both articles prove this point: productivity has eliminated many jobs but not the products. Fed's Life Support For Dying Banks To Be Revealed 3/29/2011 Bloomberg News has won its battle to force the Federal Reserve Bank to reveal some of its secret support for dying banks. Fed Questions Stimulus 3/27/2011 Federal Reserve officials are beginning to question the stimulus plan and the damage it might do to the economy's long-term prospects. Quantitative easing is scheduled to end in June but we should stop the debt monetization practice immediately. It's A Start, But..... 3/26/2011 The Congress has managed to cut all of 6/10th's of 1% from the projected deficit. For a frame of reference, the cuts are about $30 per person. The annual deficit is about $5,000 per person. Tax Seekers Never Rest 3/25/2011 Technology in new cars could permit the government to tax drivers for miles driven. This is being considered to help shore up revenues but where is the concern for taxpayers? And, is there any coincidence that the technology was pioneered by GM? Public Sector Retirements Quickening 3/24/2011 If you are curious about the outcome of the battle between the public sector and their employees, one indicator might be retirements. Public sector workers are retiring earlier than expected on fears that they will otherwise face diminished benefits. Unbelievable! 3/24/2011 A federal judge has ruled that senior citizens are obligated to 'accept' Medicare to receive their Social Security benefits. Seniors who just want to have better insurance will now remain a burden on government rather than paying for their own care. President Want Increased Reliance on Foreign Oil 3/22/2011 The truth is that America will need oil's energy density for the foreseeable future. Why is the president encouraging in Brazil encouraging them to develop their off-shore wells rather than ours? This will only exacerbate our balance of payments problems Electricity Off On The Third Rail? 3/21/2011 The biggest components of our unfunded liabilities include Social Security and Medicare. They've long been considered the 'third rail' of politics but now, there appears to be a drop in potential. Obamacare Waivers 3/20/2011 What do the waivers say about the governing process in the USA? Shouldn't everyone be subject to the same laws and regulations? It appears that politically connected organizations are being excused from compliance with Obamacare. An Example Showing Why Government Costs So Much 3/19/2011 California senators propose socializing the cost of earthquakes, a regular event in CA since 1906. Turning the government into an insurance company without reserves is a recipe for financial troubles and why should non-CA residents be responsible anyway? Cost Of Living Hits Apogee 3/18/2011 While the Federal Reserve doesn't seem to care much about the cost of 'volatile' commodities like food and fuel, most of the rest of us do. The costs of the staples of life have hit all-time highs. A likely result of 'quantitative easing'. Are We Doomed By Debt? 3/17/2011 The Bureau Of The Public Debt added six times the amount of debt that the Congress recently cut from spending in just one day. Can the U.S. ever get ahead of the problem? Pension Math 3/16/2011 The spin on public sector pensions de-mystified for an intended audience of public-sector managers. A valuable contribution from Governing Magazine. Amtrak Redux 3/16/2011 Former PA Governor Rendell proposes to double down on the Amtrak Acela failed experiment. If it's such a good idea, why not ask the private sector to undertake it? If we are to subsidize hi-speed rail, why not eliminate income taxes, after it's proven? Federalism In Full Expression 3/15/2011 Michigan is considering a very different response than Wisconsin recently adopted. They are talking about a state level czar that would have what looks to be all the powers of a bankruptcy judge. They might want to read Art. 1 Sec. 8 of the Constitution. New Methods To Finance Home Ownership 3/14/2011 Major changes in how America finances it home ownership are indicated by the continuing troubles at the two government sponsored financing entities. Here are some reform suggestions. Administration Changes Export Panel 3/13/2011 The U.S. Trade deficit keeps growing despite Washington's best efforts to staunch the red ink with exports. Fannie and Freddie In SEC's Crosshairs 3/12/2011 The two mortgage giants have been investigated for years, now some action is expected. Where was the securities agency when there was real accouning fraud several years ago? And, if sanctions are imposed, who pays...taxpayers to the government? The Problem With State Pensions 3/11/2011 This article holds that public sector pensions are a problem not so much for their generosity but for their duration. Pimco Sells US Treasuries 3/10/2011 The biggest US bond fund has exited treasuries...but not for the reasons one might think. Krugman on Education 3/8/2011 Pundit paul Krugman makes a startling observation on the value of education and labor, generally. Given what America spends on schooling,what does this mean for the earning power of Americans and the country's future living standards? The Other Side of Inflation 3/7/2011 We've been critical of financial officials for their seeming indifference to the threat of inflation. To be fair, here's a sampling of reasons why they prefer inflation to deflation. Chinese Recognize Inflation As A Threat 3/6/2011 After pulling their economy out of recession faster than the U.S., the Chinese have recognized inflation as the next challenge. Do you hear this Chairman Bernanke? Financial Report of the U.S. Government 3/6/2011 You may be interested in seeing the new website for the 2010 Financial Report of the U.S. Government and the Citizen's Guide to the report. Dollar's Reserve Status Imperiled 3/5/2011 This author presents three reasons why the dollar will fade as the world's reserve currency. We Couldn't Agree More 3/4/2011 Words of wisdom that need no further embellishment...from Bill Gates Judge Fastracks Obamacare Decision 3/4/2011 Judge Vinson, who found the entirety of Obamacare unconstitutional now allows the federal government to proceed with implimentation. He also is requiring expedited handling through the appeals process. Oil's Short Term Threat 3/2/2011 One reason our economic rivals are stockpiling dollar-denominated assets is that we buy a lot of oil from foreigners. When Nixon nixed the gold standard, he got oil producers to price barrels in dollars. If that stops, the oil threat will get worse. Cracks Beginning To Appear In Obamacare 3/1/2011 Governors, who are expected to pay for much of Obamacare, are beginning to resist the growing mandates. The president has reacted with some apparent concessisions but are they really going to help cash-strapped governors? Do Foreigners 'Own' The US? 2/28/2011 Here's an interesting list of countries that own U.S. debt. There are some surprises! A Conversation Starter On Entitlements 2/26/2011 This article posits that no one should be surprised that we need to take action on entitlements. The president says we must 'start the conversation' but where has he been over the several years that responsible Americans have been conversing? Signs Of A Compromise? 2/25/2011 Forbes reports the beginnings of a compromise on debt, taxes and Social Security. Stimulus Costs Keep Rising 2/24/2011 The CBO raised its estimate of the Stumulus's costs yet again. One would think honest federal assessments would overestimate costs as much as it understimates them. That's almost never true. What's wrong with the accounting systems? Economist Argues US Is Bankrupt 2/23/2011 Laurence Kotlikoff says the US is bankrutpt and shows how the federal government uses changing definitions to hide the fact. To us, this is an accounting issue because it does not consistently apply terms,keeping them from being comparable. China Pressuring US Policy With Debt 2/22/2011 US holdings of French and English debt empowered Pres. Eisenhower to stop the Suez Crisis in 1956. Now, China is using the same tactic to influence U.S. fiscal and foreign policy according to diplomatic cables now made public. Geithner At The G20 2/21/2011 Treasury Secretary Geithner continues to be the perfect Keynsian, predicting congressional spending cuts would 'damage' prospects to expand the economy. Another more experienced economic predictor, the stock market, disagrees with the secretary. State Unemployment Funds Broke 2/20/2011 Our major complaint is about the accounting public entities use. Here's a story that shows that not much is done even when the accounting is truthful. State unemployment funds are broke even though there were plenty of warnings. So What's The Number? 2/20/2011 Here's an article that highlights our self-delusion over spending. In it, the lead is that the proposed federal budget will cut $1.1 trillion from the deficit over ten years. But why doesn't it lead with the doubling of US debt over the same period? Social Security Not A Problem? 2/17/2011 Jacob Lew, director of the Office of Management and Budget (OMB), says Social Security 'is essentially a parallel issue.' But this doesn't mean policymakers shouldn't address its challenges. Official China Quiet On US Budget Proposal 2/16/2011 Here is a quick video on China's apparent policy of letting U.S. debt roll off their books. Is the Fed taking up the slack and if so, what are the likely consequences? Neither Party Willing To Propose Real Cuts 2/15/2011 Neither the president or the new speaker seem to be ready to tackle meaningful budget cuts. Worst Fears Coming True? 2/14/2011 One's greatest hopes and worst fears are seldom realized except, perhaps, for federal interest expenses. Borrowing costs are rising as bond yields increase. The choice to shorten maturities of U.S. debt has camouflaged long term costs to the economy. Why Are Spending Cuts So Hard? 2/13/2011 The federal government spends about $1.5 trillion more than it takes in, $1 trillon worse than in 2007. Now, the administration calls for cuts of $1.1 trillion over 10 years. Why can't we just use 2007 numbers and save a trillion a year? Corporate Tax Restructuring On Its Way? 2/12/2011 An important Democrat suggests that corporate tax complexity should be remedied--as long as it doesn't result in lower government revenues. Because corporations don't pay taxes--they just collect them--corporate taxes are a giant governmental opacity. Unemployment Insurance Entitlement 2/11/2011 As Americans consider where to reduce federal spending, entitlements must come under considerations. Unemployment insurance is becoming insolvent so the administration has proposed a reorganization--and a tax increase. Debt and Innovation 2/10/2011 One concern we have is that debt repayment crowds out research and development, the key to a prosperous future. Michael Milken, who shook up corporate America a generation ago, makes a direct connection between deficits and medical innovation. Not Too Big To Be Down-sized? 2/9/2011 The treasury secretary will present plans to reduce the 'footprint' of Fannie Mae and Freddie Mac. These life-supported institutions seemed to have escaped regulation under Dodd-Frank but maybe they will now be found not too big to fail. Republicans Having Trouble With Campaign Promises 2/8/2011 Republicans promised $100 billion in budget cuts on the campaign trail but are having trouble making good. Has Potomac Fever struck already? Governor Daniels Has His Say 2/7/2011 Mitch Daniels, governor of Indiana has a complaint about the accounting for Obamacare. Given his success in improving his state's financial condition when almost every other state declined, it's worth a read. Sheila Weinberg Asks A Good Question 2/6/2011 Here's a guest coomentary by the Institute's Sheila Weinberg regarding the Securities And Exchange Commission's mission. Waivers Undermine Health Care Reform 2/4/2011 When does government become a dispenser of favors more than an accountable enforcer of law? It's granted 700 waivers to the new law's requirements and surprisingly, many waiver seekers were strong supporters of 'reform'. Two items report developments. Accountants Faulted For Financial Meltdown 2/3/2011 A search for 'accountants' in the Financial Crisis Inquiry Commission's report doesn't turn up much. Howard Davidowitz asks the obvious question. The Limits Of Federal Power 2/2/2011 One reason the federal debt and the unfunded obligations are so massive are the promises the federal government has made. Many believe that these are often the result of 'mission creep'. The Florida ruling directly addresses the limits of federal power. Federal Judge Rules Obamacare Unconstitutional 2/1/2011 Despite the CBO's determination that health care reform would reduce the annual deficit, truthful accounting would have matched revenues and expenses. The analysis did not but that's not the reason a federal judge has ruled the whole Act unconstitutional. Egypt Pulls The Kill Switch 1/31/2011 Egyptian authorities have flipped the internet 'kill switch' in an attempt to tamp down the protestors. Amazingly, one of the most liberal senators is pushing to give the same power to the federal government. Why? The Financial Crisis Commission's Report: A Discussion 1/30/2011 The Financial Crisis Inquiry Commission has released its report and there is significant disagreement as to the causes and remedies. Here are links to opinions of several experts on the subject. It's Worse Than It Looks--Illinois' New Tax Trick 1/29/2011 Illinois' massive tax increase has been widely ridiculed but a sneaky provision eliminates tax loss carry forwards. This will retard business recovery, stifle investment and kill jobs. Obamacare Accounting Questioned 1/27/2011 Independent experts working for Medicare doubt that health care reform will hold costs down. The chief actuary also testified that many individuals will not be able to keep their existing insurance plans. Should the reform estimates be restated? More On A New State Bankruptcy Chapter 1/26/2011 Another report on Senate talk about a new bankruptcy chapter for states. The question is whether the existence of a bankruptcy option would force feuding parties to the bargaining table. The SEC Investigates Illinois' Bond Dsclosures 1/25/2011 Following an investigation and resulting consent decree in New Jersey, the Securities and Exchange Commission is looking into the situation in Illinois. The SEC can't directly regulate municipal securities but it is concerned with individual behavior. An Interesting Factoid 1/25/2011 GM, the world's second largest carmaker and the quintessential American company, sold more cars in China than it did in the U.S. We need to export there, not just sell there to help our financial situation. Iceland Goes After Bankers 1/24/2011 While we bail out our banks without consequence to the bankers, Iceland follows a far different path. Las Vegas Review Journal Smells Something 1/23/2011 Las Vegas' Review Journal goes on the record regarding the Institute's Financial State of the State analysis. Public Pension Transparency Act 1/22/2011 There's a new push to get states to expose their pension and health care liabilities in Congress. This proposal would encourage states to expose their real unfunded liabilities but because states are sovereign, it would not be required. State Bankruptcy Option More Than Whispers 1/21/2011 Talk about a new chapter in the bankruptcy code allowing states to file for protection is getting louder. Likely congressional refusal to bail out states is driving the conversation but big constitutional and strategic hurdles are evident. How Much Will State Finances Hurt GDP? 1/20/2011 Problems with state finances have economists predicting the effects on GDP. This article analyses municipal layoffs and their direct effects on consumer spending. But, shouldn't we also recognize rising taxes and fees' effect on economic activity? Bankruptcy For States 1/18/2011 There is no provision in the U.S. Code for states to declare bankruptcy. That may change as the reality of states' insolvencies become more evident. An Idea For Fixing The Mortgage Mess 1/17/2011 Fannie and Freddie are still making sub-prime loans that this author thinks create a moral hazard. To fix the mess. he suggests a three step plan. How Does Your State Rank? 1/16/2011 The Economist has matched each state with its economic twin around the world. Click the link to see where your state ranks. A Comprehensive List Of New Obamacare Taxes 1/15/2011 From our friends at Americans for Tax Reform, a list of the new or increased taxes that health care reform imposes. Turns out to be one of largest tax increases ever, meted out in small, targeted doses. Illinois' Situation Illustrates Diminishing Options 1/14/2011 Illinois' reckless spending has convinced legislators that it was time for a massive tax increase. Surrounding states see an opportunity to poach businesses. If the U.S. increases taxes to cure its deficit, will the same thing happen internationally? Triple A Is Not Forever 1/13/2011 Two credit rating agencies have issued warnings on America's AAA debt rating, saying that it's in jeopardy. Given the agencies' demonstrated chronological insensitivity to changing credit conditions, are we closer to a market downgrade than we think? Dimon Predicts Trouble For Munis 1/12/2011 Banker Jamie Dimon predicts more municipal bankruptcies. Municipal bond prices are being inflated in anticipation of federal bailouts. Four Governors Make The (Imaginary) Case For A Bailout 1/12/2011 Speculation about governors of New York, Connecticut, Illinois and California pleading for a federal bailout. The premise is they pay more into the federal government than they receive. But claiming that they must "balance our budgets" is a myth. What The Chinese Do With Their Foreign Exchange Surpluses 1/11/2011 We're sometimes asked why accountants keep an eye on our trade balances. Here's a good explanation in the form of two stories in today's reporting. Dire Economic Predictions For The US 1/10/2011 The conventional economists meeting in Denver say that the Chinese eclipse of America's economy is inevitable. One specific prediction is that the yuan will become the world's reserve currency within a generation. A Long-Term View Of US Population Trends 1/8/2011 An excellent, 80-year overview of the long-term internal migration of Americans and immigrants using our constitutionally-required accounting---The Census. Spending Is The Problem, The Debt Ceiling Is The Symptom 1/6/2011 The coming collision with the debt ceiling is only the symptom of too much spending according to this opinion. That raises the question of whether refusing to raise the debt ceiling is an effective strategy for weaning federal government from spending. Another Sign Of Rising Chinese Economic Power 1/5/2011 Yuan-denominated financial instruments are popping up in Hong Kong as the Chinese begin to unleash their currency as an alternative to the dollar. Is A VAT Tax On The Way? 1/5/2011 Health care reform requires payers to issue IRS 1099 forms. This may set up the mechanics and be the first step to a new European-style Value Added Tax. Brazil Complains About The Yuan 1/4/2011 Some American observers believe that China is keeping its currency undervalued to maintain its export supremacy. Now, Brazil's new president lodges the same complaint. Governments Begin Seizing Private Pensions 1/3/2011 Five European governments have begun to take private pensions to fill annual deficits. Don't believe it can't happen here--Congress has already held hearings to find ways to eliminate 401(k) plans in exchange for federally operated schemes. Bumping The Debt Ceiling 1/3/2011 The primary measure of federal debt is its statutory limit, now set at $14.3 trillion or nearly 95% of GDP. Federal spending is quickly reaching that limit and a battle is developing on what to do when the limit is reached. Less spending or more taxes? The Next Public Choice 1/2/2011 The cost of public sector wages and benefits has become a contentious subject. The unsustainable costs must be adjusted is some form, but how? And should workers or taxpayers take the biggest hit? At The Top Of The Roller Coaster 1/1/2011 As boomers first reach 65 today, they will want their benefits. Like a roller coaster climbing the first hill, the associated financial crisis has developed slowly. Now that we're at the top, watch for the problems to accelerate...very quickly. Chinese Investment In US Manufacturing Increasing 12/30/2010 A 'man bites dog' story about Chinese companies moving manufacturing to the U.S. It's a symptom of the declining value of the dollar which makes it less expensive for the Chinese to operate here. Why Health Care Costs So Much 12/30/2010 Here's one view on why medical care costs so much in the U.S. Unfortunately, the new health care law does nothing to reduce these identifiable costs. Expiring Congress Earns A Dubious Distinction 12/29/2010 Officially, the 111th Congress added $10,429.64 in new debt for every man, woman and child that was recently enumerated by the Census. That's up a staggering 30.3%, from $34,45.93, at the end of the previous, 110th Congress. Mismanagement Contributes To Pension Fund Woes 12/28/2010 Detroit has big economic problems so why are public pension funds investing in questionable deals? One wonders if other public pension fund are involved in similar transactions and how much future fund beneficiaries expect the taxpayers to make good? The Czar Of Vermont Confesses? 12/27/2010 There is much controversy over the effects of the stimulus program authored by the expiring Congress. Here's the viewpoint of one state official assigned to oversee the spending. The article begs the question, 'why did we obligate the nation for this?' What Happens When The Pension Fund Goes Broke 12/26/2010 A slideshow showing the effects of pension fund mismanagement in small town America. What was once thought impossible has now come to pass. Prichard, Alabama's decision to simply stop sending pension checks may become the wave of the future. Cities Raising Taxes To Fund Pensions 12/24/2010 With lavish pension deals justified by faulty accounting coming due, municipalities expect to raise real estate taxes substantially. More Evidence The Obvious Is Becoming Evident 12/23/2010 The mainstream media is beginning to take notice of the nation's dire financial condition. Unfortunately, while reporters are becoming aware that there's a problem, they are still only focusing on the most obvious, rather than the true, numbers. Federal Burdens On State Finances 12/22/2010 Growing Medicaid budgets are burdening states as health care mandates begin to take effect. This article holds that these impositions are more problematic than public pensions. The federally-imposed costs are as expensive as education to the states. Mayor Daley Uses The "B" Word 12/21/2010 While not available to states, cities and towns can go bankrupt under federal and state laws. Recently, the outgoing mayor of our hometown mentioned bankruptcy as the solution to the city's mounting obligations. Markets Differentiating Credit Quality 12/20/2010 The bond market is starting to charge an interest premium for municipalities and states with weaker financial conditions. What Does The XXth Amendment Mean? 12/18/2010 After a session noted for its stately pace, the lame duck session is working hard. But is their work constitutional? This article postulates that lame ducks are unconstitutional. Wouldn't observance of notion change things? Accounting For Auto Jobs Doesn't Add Up 12/17/2010 The news media misses the facts about job creation in the auto industry. Ever Hear of the Tower Amendment? 12/16/2010 Municipal bond issuers have been protected from revealing their real financial conditions by the Tower Amendment. This article reports that demand for more truthful government accounting is growing...and not a moment too soon! The Progressive Case For Benefit Reform 12/15/2010 A well-known San Francisco Democrat makes the progressive case for reforming municipal workers' benefits. But voters said 'no' and Moody's dropped the city's bond rating almost immediately. We're Borrowing 40 Cents of Every Federal Dollar of Spending 12/14/2010 This article by a defeated Congressional Blue Dog makes an important point worth reading but understates the criticality of unfunded promises. Just look at the nearby debt counter for an idea of how big the problem really is. Triple Whammy For Public Pension Funds 12/13/2010 Three big problems facing all defined benefit pension plans include increasing benefits, lower asset values and lower earnings expectations on those reduced assets. Public pension benefits, primarily defined benefit plans, will cost legislatures more. California's Economy Improving 12/12/2010 We've worried that California would be the first state to become insolvent as a consequence of not properly accounting for costs. Perhaps things are improving but permanent fiscal improvement requires proper accounting. The Market Begins Repricing Government Risk 12/9/2010 The bond market is beginning to demand higher yields for sovereign risk. While yields are historically low, is the injection of QE2 reserves having the opposite of the desired effect? Tin Eared Legislator Seeks Bigger Paycheck 12/8/2010 A term-limited state senator runs for the California Assembly and decides that a pay decrease isn't right. He filed with the California Victim Compensation and Government Claims Board. When our leaders feel this entitled, how can we make any progress? Europe as the Preview of US Debt Troubles 12/7/2010 The situation in Europe may well predict what will happen in the U.S. This author believes that the public sector's managers are just as greedy as the worst private sector actors. His prescription is to insist on more honest accounting and disclosure. Two Views On The Deficit Panel 12/6/2010 Here are two opposing views on the work of the president's deficit panel. Without the necessary votes to bring it to a vote as a package, one wonders what pieces will eventually make it through the Congress. Nevertheless, there is some bipartisan support. Mainstream Media Discovering The Pension Abyss 12/5/2010 We've fretted about obligations compounding at public pension funds for years. The mainstream media is now reporting the financial abyss facing state and local governments, a problem dwarfing the housing bubble. Some suggest new state bankruptcy laws. Ethanol Subsidies Doomed? 12/3/2010 One reason the federal budget is out of control are corporate subsidies required to support uneconomic activities. Here's a good idea to start reeling corporate welfare back. But, weren't environmental groups the original supporters of biofuels? Debt Commission Issues Final Report 12/1/2010 The presidential commission goes out of business today issuing aggressive recomendations for solving America's fiscal problems. As expected, they tout higher taxes and fewer benefits. Will there be any plan to fix one root cause-defective accounting? Is The Federal Pay Freeze Material? 11/30/2010 The president announced a pay freeze for civilian federal workers but isn't that just a drop in the bucket compared to the annual deficit? This article sees the freeze as a harbinger of a smaller federal government. Liberals To Make Deficit Reduction Pitch 11/29/2010 Liberals have joined this cause celebre' in Washington; taxes and entitlements will be the battleground. But what can be done to reduce demand for benefits? Should tax rolls be expanded to all Americans to connect costs and benefits? Taxes And Politics 11/28/2010 Dick Durbin demonstrates why Congress spends more than it takes in. He's attaching additional unemployment eligibility to the anticipated tax bill. Balanced Federal Budget Out Of Reach 11/27/2010 Politicians and analysts are not very optimistic about balancing the federal budget. Without the belief that something can be done about the budget, it's unlikely that anything will be done. The nearby quote from Henry Ford is spot on. Black Friday and The U.S. Savings Rate 11/26/2010 Black Friday bargains abound today but what is the latest on the U.S. savings rate?. Low savings is one of the four deficits our friend David Walker identifies as a chronic problem indicating an unsustainable economy and lowered expectations. Russia and China Renounce The Dollar 11/25/2010 Despite denials that it's an assault on the dollar as the world's reserve currency, Russia and China agreed to accept each others' currency for bilateral trade. China replaced the dollar with the yuan for South American trade, earlier this year. Build America Bonds More Financial Smoke and Mirrors? 11/22/2010 Build America Bonds were authorized by the American Recovery and Reinvestment Act and are becoming favorites of fiscally wounded states. Is this just kicking the can, more accounting chicanery or both? The Importance Of Earnest Accounting 11/22/2010 Disputes between U.S. and European accounting standards lead to a $138 billion difference when assessing the same assets. Asset valuation, specifically 'mark to market'significantly contributed to the 2008 meltdown and the need for bailouts. Officials Waking To Accounting Problems 11/21/2010 Our friend Frank Keegan says 'No one uttered the dread word “Truth” during five hours of intense testimony Thursday on growing malaise ripping through municipal bond markets like rumors of plague as awareness of state and municipal fiscal malady grows.' Bernanke Blames China 11/19/2010 China is keeping its currency low which keeps prices of their products low here. Chairman Bernanke isn't pleased and tells the Europeans. Bond Market Cools For States and Cities 11/18/2010 Financial crises start slow then accelerate as market participants begin to appreciate conditions. Years of over-promising mean a crisis may be appearing in the municipal bond market as demand for new public debt is less than robust. Growing Agreement On Earmarks 11/18/2010 Earmarks are a tiny part of congressional spending but the quid pro quos that occur helps explain the explosion of total spending. A Novel Idea? 11/17/2010 We ran budgetary surpluses--at least on a cash basis--in the 1990's because the economy grew faster than expected. Should the government pursue a growth policy rather than a redistribution policy to help do away with trillion dollar deficits? QEII Causing Inflation? 11/16/2010 The Bureau of Labor Statistics doesn't seem to know it yet but inflation has returned. A visit to the grocery store confirms that there's a need for more truthful accounting about prices. This story reports worry about 'currency debasement'. A Word On Social Security 11/15/2010 Peter Orzag, recently departed from President Obama's Office of Management and Budget, hold forth on the future of Social Security. But, as he correctly points out, Medicare costs are a much bigger problem Fed Watchers Get An Ally 11/14/2010 One of the consequences of the change-over in Congress will be that Fed critic Ron Paul will get some Federal Reserve oversight. This may keep Ben Bernanke up at night. Federal And State Deficit Fixes 11/12/2010 The recipe for fixing federal and state budget problems is remarkably similar according to this opinion in the LA Times. Neither will be very pleasant, if they ever see the light of day. What To Do About Public Pensions--From The Inside 11/11/2010 The Government Finance Officers Association has some recommendations on what to do about defined benefit public pensions. Doggone! Chinese Downgrade U.S. Debt 11/10/2010 A Chineses credit rating agency, seeking to compete with American agencies, has determined the U.S. may have some trouble repaying the debt we owe China,among others. Combined with QEII, are we in more trouble than we think? Transparent Opacity 11/9/2010 VP Joe Biden holds a closed meeting on...wait for it...govenmental transparency. China Disdains 'Planned Ecomomies' 11/8/2010 Chinese economic officials are concerned with the U.S.'s planned 'quantitative easing'. As owners of more than a trillion in treasury and other assets, they will lose if the dollar declines. Look for a brouhaha at the coming G20 meeeting. Debt Ceiling Battle Looming? 11/6/2010 The Congress has never failed to lift the debt ceiling which has more then doubled since 2002 to a whopping $14.3 trillion limit. If they raise the debt limit every time things get tight, what's the point of having a limit? What You Can Do About The States' Fiscal Problems 11/5/2010 Here are some questions you should ask your state legislators. From our friends at The Franklin Center. Some Views on 'Qualitative Easing' 11/4/2010 'QEII', a new injection of at least $800 billion to purchase government debt sure looks like currency debasement to us. Here are some interesting views on the plan. Freddie Needs Money 11/3/2010 While everyone is watching the elections, Freddie Mac needs $4.1 billion more in federal cash to maintain 'positive net worth'. Chinese Foreign Trade Growing Quickly 11/1/2010 The Chinese economy keeps growing at a fast clip if their estimates of this year's foreign trade are accurate. As they become less dependent on the U.S. as a trading partner, what will become of their appetitie for our debt? Illinois Lowers Pension Earnings Expectations 10/31/2010 But did they lower it enough? Another Threat To The Recovery 10/29/2010 Faulty paperwork is keeping the real estate market from stabilizing. One wonders if the banks can't keep the paperwork straight, if they we competent to make the loans in the first place. Like other federal bailees, we don't have an accounting. The Result Of Too Much Debt 10/28/2010 The problem of too much debt is that it crowds out productive investment. Here's another example of our future being foreclosed by our overwhelming debt. What's Next For French Pensions? 10/27/2010 France is moving to raise their retirement age to 62 from 60 touching off riots. It's the equivalent of our raising the social security so it's interesting to see what will happen on the streets of Paris. Citi and FOIAs 10/25/2010 During the financial meltdown, the U.S. Treasury guaranteed more than $300 billion in securities owned by Citigroup. The Treasury is refusing to account for how the money-or taxpayers' guarantee-was applied. Big Payments to Private Sector Pension Plans 10/24/2010 In complete contrast to the public sector, private companies are making big payments to fund their future pension obligations. San Francisco Pension Fight 10/23/2010 San Francisco is becoming ground zero in the public pension fund question. It's little wonder--pension costs have risen to $400 million per year from just $175 million five years ago. Fundamental Transformation Is Different In Britain 10/22/2010 Many Americans think we spend and borrow too much. The Brits have the same problem and are talking 'Total Transformation'. Is there anything we can learn from their situation and can we muster the political fortitude to change our profligate ways? Does Geithner Want A Lower Dollar? 10/21/2010 Internationalists are advising a 'managed decline of the dollar' as a step towards what they view to be a reconstituted international financial system. Is this what's behind Treasury Secretary Geithner's 'rebalancing' activity? Brits Bite The Bullet 10/20/2010 The recently elected government faces reality and outlines budget cuts it intends to make. Could this foreshadow what the U.S. will do in the near future? Pension Fund Surprises 10/20/2010 Here's a story about when state pension funds will run out of cash. Problems are found in some unexpected states. The National Debt--At Least The Official Debt 10/19/2010 Federal officials posted the national debt at $13.66 trillion, up more than 28% since President Obama took office. Given that unfunded liabilities are almost five time as large, do we have our heads in the sand? FASB To Decide On Multiemployer Pensions 10/18/2010 While this column has a decided point of view, its larger point is that the Financial Accounting Standards Board is ruling on multiemployer private pensions. They are in serious financial trouble and the accounting professionals are taking notice. Krugman's Views on Mortgage Problems 10/15/2010 Many believe that stability in the housing market--and the mortgages that support it--are a prerequisite to financial recovery. Here are the Nobel Laureate's views on what he calls the 'mortgage morass'. 'Prestidigitation' in Health Care Accounting..and a Fix 10/14/2010 From Governing. The double counting of new taxes for the Affordable Care Act is exposed and the likelihood of an intergenerational reported. Against this bad news, a possible solution in the form of an 'actuarial autopilot' is suggested. What Happened in the Collection Department? 10/14/2010 Major banks have stopped foreclosure activity which will stall the recovery in the residential real estate markets. Why? Local Government Pension Woes 10/12/2010 More evidence that state and local governments have a big pension problem comes from this study. Fed Setting Up Inflationary Economy? 10/11/2010 Conventional wisdom holds that the Fed killed inflation in the early 1980's, or did it? In any event, the Fed appears ready to debase the currency to address the deficits. Wise Words From A Fed Bank President 10/10/2010 Richard Fisher, the president of the Dallas Federal Reserve Bank, proves he is both wise and witty. Here are his remarks in Minnesota on the reliability of economic forecasting and what should be done. George Soros Recommends More Stimulus 10/9/2010 After reportedly reducing his U.S. equity holdings, the progressive billionaire financier prescribes more stimulus and less budget balancing. The Outlook For State Budgets 10/7/2010 Voters in states with extreme budget problems will choose between their status quo and very different visions for state government. Here's a speculation on what could happen in New York. Middle Class Spending Declines 10/6/2010 Middle class consumers have reduced spending even though their income has stayed essentially constant. That should indicate higher savings or the pay-off of debt. Both would be good for an economy addicted to debt. Chinese Offer Greece Credit 10/5/2010 Chinese leader Wen is diversifying his portfolio of troubled credits by offering to buy Greek debt. Is China becoming the world's manufacturer and banker? Bond Pricing Anticipating What? 10/4/2010 Yields for Illinois' bonds now exceed those paid by Mexico, a country that has actually defaulted. Do the high rates Illinois--and other states--pay indicate payment problems ahead? Foreclosures Stalled--An Accounting Problem? 10/3/2010 Banks have stopped foreclosure proceedings in several states because they didn't properly review their documents, apparently leading to some improper seizures. Another question of accounting and accountability. A Good Question 10/2/2010 Here are questions about responsibility for public pension obligations. From Governing Magazine. Some Good News On Bail Outs 10/1/2010 While Fannie and Freddie remain financial disasters, the news on the TARP progam is that maybe, just maybe, our children will not be burdened with paying for it. We'll wait for the final, truthful, accounting before we celebrate. Sheila's Alma Mater Features Her and IFTA 9/30/2010 An excellent story about Sheila Weinberg frm her alma mater, the University of Denver. The Trajectory of Public Pensions 9/29/2010 A recently published op-ed piece by Bronxville Mayor Mary Marvin illustrates how fast one village's pension costs are escalating. According to the mayor's examples, these costs are growing far faster than even health care costs. Debt And Investment 9/28/2010 One collateral effect of high debt is that servicing it forecloses other options including investments in the future. Here's a story from China that illustrates their push for research that yields international patents--and control of future opportunity. Declining Income In Most States Sharpens Fiscal Woes 9/27/2010 Falling incomes in two of three states can't help but worsen budget shortfalls. We've learned that the recession ended a year ago but that word is apparently slow reaching state capitols. Where's The FY 2011 Budget? 9/27/2010 The new fiscal year starts this week but there is no federal budget to guide spending. This is a first in modern times and without a limit there's probably no limit to spending. It's a roll of the dice. Another Bail Out Weekend 9/25/2010 Just in time for Saturday's newspapers, the federal government has bailed out the nation's wholesale credit unions. The reason is familiar: sub-prime mortgage trouble. Regulators claim it won't cost taxpayers a penny....this time, for sure! Self-Funded Stimulus 9/24/2010 American companies operating overseas often leave their profits abroad because of the taxes on reinvesting in the US. If they brought that money home, the effect would be to expand our economy. Now, one labor leader has 'seen the light' on this. Colorado Springs Matches Revenues and Expenses 9/22/2010 One reason that government deficits exist is because citizens ask for more services than they are willing to fund with taxes. Here's the story of one city that is significantly reducing services to keep taxes low. Cities are interested in what happens. What Do You Say To Your Bank? 9/21/2010 China is pressing its advantage as the U.S.'s biggest creditor. It is telling us to butt out in the South China Sea. Bonuses For...Middle of the Road Performance? 9/21/2010 Bonuses are supposed to be paid for top-flite performance so this story is curious. It seems the nation's largest state pension fund paid bonuses for bad performance. We're concerned because truth in accounting also means accountability not entitlement. Now Here's A Twist 9/19/2010 More residential mortgage financing would hardly seem to be a prescription for re-starting the economy. Here's an interesting proposal to refinance every home in America. Report On Pension Assumptions 9/18/2010 We've been worried that public pension funds have assumed they would earn much more than they have. This means the pension shortfall may be much larger than it appears. What Happened To Self-Reliance 9/17/2010 Americans used to pride themselves in self-reliance but now, we've become a nation of entitlements according to this widely reprinted Wall Street Journal article. Riordan On Pensions 9/16/2010 Former LA mayor Richard Riordan proposes a pension bailout based on accurate accounting. That's nice but shouldn't public entities be expected to account accurately? And what happens if the Feds take on the pensions? Shouldn't the PBGC be in charge? China's Strategy For Empire Building 9/15/2010 The U.S. is shipping more than 1% of its wealth to foreign suppliers and competitors every year. The accounting for this policy is beginning to become evident; here's what China is doing with the transfer. New Jersey Leads Move To Cut Public Pensions 9/15/2010 At least twenty states have or are considering a significant change in public sector retirement benefits. In New Jersey, the threat of changes is causing a rush at the retirement office. SEC Enforcement And Accounting Policies 9/14/2010 The SEC usually does not have authority over municipal bond issuers unless there is fraud. here's an interesting take on that question. The Yen Is Soaring 9/14/2010 The dollar now only buys 83 yen, a record low and clear evidence that the world is tiring of the dollar. Japanese investors in US Treasuries have lost 33% in currency translation in just two years. Here's an interesting history of the yen. Fed Keeps It Secrets 9/11/2010 When other government entities are discovering the wisdom of transparency, the Federal Reserve seems to be going in the opposite direction. Wouldn't You Think They Would Have Already Done That? 9/10/2010 The Securities And Exchange Commission is examining new rules that would prohibit companies from concealing debt. Wow, how timely! What about applying the same rules to government's undunded liabilities, too? Good Advice to Pension Funds 9/8/2010 This article advises governments to accurately account for guaranteed pension funds. We couldn't agree more with that notion but why stop at pensions? April 2010 Newsletter 9/7/2010 Sovereign Insolvency 9/7/2010 Readers object to the term 'bankruptcy' when referring to states. These objections are valid as there is no provision for state bankruptcies. But what should we call the financial condition of states being evicted from leased facilities? Let us know. Derivatives Threatening Municipal Bonds? 9/7/2010 Bond buyers are worried about issuers' financial conditions but are credit default swaps a more proximate threat? These side bets may be putting pressure on the market but would CDSs exist if municipalities' creditworthiness weren't in question? An About Face On Home Prices? 9/6/2010 Spending skyrockets when government tries to overcome markets. The real estate bubble is an example of the US taxpayer assuming risks the market wouldn't. Now, the Feds will let the market set home prices--a first step towards recovery. The Chicago Tribune Is Right 9/4/2010 The Chicago Tribune is exactly right about Illinois--and ever other state--that bases its pension fund calculation on assumed rates of return that are too high. Now,the pension funds are now selling assets, exacerbating the problem. Recycling In A Different Form 9/3/2010 Recent reports tout GM's initiative to recycle everything and become a 'zero waste' manufacturer. Are foreign governments doing the same thing with US dollars? Are they recycling them through the GM IPO? The current owners are worried. India And China Duke It Out 9/2/2010 But where's the U.S.A.? Both countries have a plan--India exports brainpower and China manufactures everything--but what is the American stategy? We will eventually run out of borrowing power, what then? Bernanke Scores More Powers 9/1/2010 Economic recovery depends much on the Federal Reserve. Two years ago Congress wanted to trim the Fed's powers but, instead, has given Bernanke more powers with financial overhaul. Let's hope that Bernanke has read as much about inflation as depression. Long Way Away From Recovery? 8/29/2010 Deficit spending is justified by the recession and is thought to be temporary...until the economy comes back. In the 1930's prosperity was 'just around the corner' but never came. Are we under the same delusion in 2010? A financial historian opines. Bailed Banks Bailing On The Dollar 8/28/2010 Citigroup, one of the banks bailed out by the American taxpayer, is advising its customers to drop the dollar in favor of the Chinese renminbi. This aligns the bank with the Chinese government's push to make its money a reserve currency. State Workers Resist Contributiong to Benefits 8/27/2010 States are seeking compromises with their workers and teachers over health care funding. Chicago area readers will want to catch IFTA Founder Sheila Weinberg on Fox 32 on Sunday morning at 8:30 a.m. Misdirection 8/26/2010 Former Senator Simpson lets his tongue wag but are objections just misdirection by those who want to keep the status quo on Social Security? Simpson's earthy style isn't news and, apparently, neither will the debt panel's Rx until after Nov. 2. Homeowners Should No Longer Expect Gains 8/25/2010 Americans have long expected their homes to be a good investment and to provide a nest egg. That may be a thing of the past and have important implications for the U.S. economy. Selling Assets for Pension Payments 8/24/2010 Illinois' pension funds are selling assets to make payments. There are buyers. Since these are real assets, the Illinois situation is different than the federal situation. Social Security's assets consist of government IOUs. Who wants them? Nice To Know We Are Right 8/23/2010 Today's Wall Street Journal lists the state budgeting tricks the Institute identified in our 2009 publication The Truth About Balanced Budgets: A Fifty State Study. The report is avalable to download at www.truthinaccounting.org Pension Underfunding Varies.... 8/22/2010 Governing Magazine assesses the preparedness of six big state pension funds. California To Issue IOUs....Again? 8/21/2010 Financial troubles in America's biggest state continue. "Social Security Works For America" 8/20/2010 Entitlements are the primary long-term challenge to the nation's fiscal health. Social Security's supporters have posted this article on the success of the program. Here's the view of the social justice organization "Social Security Works". Social Security at 75 8/20/2010 Social Security has reached the ripe old age of 75. Its troubles are clear but there's little agreement about what to do. Here's a suggestion from Forbes Magazine. SEC Acts On NJ Pension Funding Fraud 8/19/2010 The Securities and Exchange Commission has come to a settlement with the State of New Jersey. The SEC charged NJ with selling $26 billion in bonds that did not adequately reveal the real financial condition of the state's underfunded pension funds. CBO's Summer Update Shows Red Ink 8/19/2010 The Congressional Budget Office has released its Summer Analysis that shows a total deficit of 9.1% of GDP, second only to last year's 9.9%. That means we've added debt of around 19% of GDP in the last two years. The years pass but the debt remains. Private Sector Unions Seeking Bailouts 8/16/2010 Public sector pensions aren't the only ones in trouble. New accounting rules are exposing troubles in the private sector, too. Organized labor is seeking a public bailout. No Confidence or Just Diversification? 8/16/2010 Chinese finance officials are diversifying their foreign exchange to currencies other than dollars. Is this a result of the Europeans taking a more realistic stand on deficit spending or simply the wisdom of asset diversification? Germany Takes A Different Path 8/14/2010 Germans have apparently managed their recession more effectively than we have in the U.S. Their rebound in economic growth will help balance national budgets quicker. Jerry Brown's Pension 8/13/2010 California pensioneer and Candidate Jerry Brown has generated controversy because no one knows the details of his pension service credit. This is a matter of transparency that may have consequences in November. "The New Deal Is Demographically Dead" 8/12/2010 There is a battle looming between pensioneers and taxpayers. Is The Fed Monetizing Debt? 8/11/2010 Despite Bernanke's assurances, the Fed has begun printing money to buy the Treasury's debt. Mark this date as the start of a period of inflation. Washington Sponging National Wealth? 8/10/2010 Evidence is growing that government is doing much better than the economy at large. The vast expansion of the federal government over the last decade is fueling boom times in Washington D.C. as the rest of the nation shoulders the effects. Social Security Cashflow Turns Negative 8/8/2010 For the first time ever, Social security is paying out more than it's taking in. Here's one reason why. Medicaid Trustees Gagged? 8/6/2010 Guess what? Medicare will cost more than the current statutorial estimate predicts. This compelled an alternative actuarial report. Fascinating, but truly disappointing that the trustees are apparently not permitted to tell the truth! Bond Managers Prognosticate 8/5/2010 With all the deficit spending, does inflation or deflation loom? The managers of the world's largest bond fund offer their opinions. Mo Says No 8/4/2010 Voters in Missouri may understand the costs of a huge new entitlement better than their representatives. They rejected a key provision of the health care reform bill by a convincing margin. Will State Financial Reports Be Delayed Further? 8/3/2010 The IFTA has extensively reported on the tardiness of state Consolidated Annual Financial Reports. Timely information is essential as the states contend with growing fiscal problems but this story reports that state CIOs' budgets are smaller. The Language of Bond Ratings 8/2/2010 Fitch Ratings has launched a new commentary on state finances that is available to anyone. Here's a sample and a link to subscribe Sheila On C-Span 7/30/2010 The Institute's Founder appears on C-Span to recommend FACT-based budgeting. Check it out. Americans Beginning to Save Again 7/27/2010 In this decidely partisan article on China there are two nuggets. First, the observation that the American savings rate has recovered to about half its long term average. Second, the government's deficit spending is nearly $10 per working hour. Is Everything OK in OK? 7/25/2010 Teachers have somethng to worry about in Oklahoma--their pensions. Sheila Weinberg and the IFTA have recently analyzed OK and found some conflicts in the funds' valuations. Pete Peterson's Prescription 7/24/2010 The founder of the Peter G. Peterson Foundation, oft quoted here, gives is view on the US debt situation. Citizens Fire Overpaid City Employees 7/23/2010 Here's an interesting story about three city employees in Bell California that were fired for salaries that were very high. Report: Bailout Cost at Least $3.7 Trillion 7/22/2010 According to this report from Reuters, the bailout has cost the U.S. some $3.7 trillion, so far. These costs are showing up in the national debt but the estimate doesn't include the new costs health care or financial reform will bring. Maine To Use Social Security To Solve Pension Woes? 7/21/2010 Maine has a public pension system one legislator calls 'immoral'. It's unsustainable so the state is looking into using Social Security. Seems like going from one scheme to another and watch for benefits to be paid to retirees who haven't paid much in. Chinese Pass US In Energy Usage 7/20/2010 Energy is a proxy for economic output. China is now using more energy than the US in another sign of China's growing economic power. But the reason may be more due to the differences in the two economies' efficiencies. Questioning Actuarial Assumptions 7/19/2010 For years, public pension systems have assumed their investments would earn between 7-8%. Growing evidence shows that the assumption is too high. If so, these pension systems are further under water than previously thought. International Financial Reform 7/18/2010 On the heels of the expanded regulation of U.S. banks, the Bank for International Settlements, in Basel, Switzerland, is bringing out its own set of capital requirements. One wonders if they will apply to Fannie or Freddie; our new law missed both. Willie Brown Finally Understands 7/16/2010 California's pension costs have been rising at a 38% annual compound rate over the last decade. Willie Brown, one of California's most powerful politicians, was the architect of much of this distress. According to The WSJ's John Fund, he's repented. Fed Recalibrating? 7/15/2010 The Fed's Plan isn't working. Is it possible that uncertainty, not the lack of liquidity, is the problem with the economy? If so, is what used to be called 'pump priming' just inflationary? Bill Gates Weighs In On State Budgeting 7/14/2010 The Institute for Truth in Accounting believes that state budgeting practices often obscure financial conditions more than they reveal. Bill Gates goes much further when speaking to the intelligensia in Aspen, calling state budget systems 'fraudulent'. Another Legislative Leviathan? 7/14/2010 A Bloomberg survey says that four of five Americans think the Financial Reform Bill will not make the financial markets safer. Nothing in the bill does anything to reign in Freddie or Fannie--which makes them too big to fail--why? Sheila Weinberg On The Radio 7/12/2010 Founder Sheila Weinberg becomes a radio star in Maine. Hear the audio link embedded in the article. Health Care Efficiencies 7/11/2010 Medicare is the largest unfunded liability of the federal government so any reduction in costs will help. Here's an article about efficiency that should keep the rate of cost growth down. They use techniques as old as Henry Ford. Congress: Heal Thyself 7/9/2010 The Congress hasn't fulfilled its most important responsibility of passing a budget. Instead, the leaders have used the existence of the Budget Commission to abdicate their duty until the Commission reports in December. That's well into next fiscal year. A Response to Andy Grove 7/8/2010 Last week,we published an article from Andy Grove on jobs. Here's an alternative view. China's View On Trade 7/7/2010 The Chinese are not happy with the 'Bilateral Investent Treaty' according to this article. It argues that China has benefitted from ignoring the 'Washington Consensus' on trade, pointing to Latin America which did heed Washington and stagnated. Inflation 7/6/2010 One way of dealing with the nation's public debt is to inflate it away. Monetary officials are more concerned with deflation but other parts of the government may be unleashing the forces of inflation. An Idea From Inside State Government 7/5/2010 The dismal news on state finances is disheartening but here's an article from a state government insider that suggests we could learn a lot from the Revolution. Where Is The Budget? 7/3/2010 The Congress 'deemed' a budget this past week which allows spending without debate on the fundamentals. From a partisan source but unreported elsewhere. "Unconstitutional" Budgets Catch Up 7/3/2010 Comptroller Dan Hynes has expressed his opinion that the state's budget is constitutionally suspect yet kept writing checks to cover them. Now, the General Assembly's profligacy has caught up and Illinois becomes the poster child for fiscal dysfunction. Andy Grove's Advice 7/2/2010 Andy Grove offers his views on creating employment in the U.S. The former Intel chief calls for a 'job centric' environment. GASB Opines on Public Pensions 7/1/2010 The Government Accounting Standards Board has opined on the nature of state and local government pensions. How A Bill Becomes Pork 6/30/2010 With apologies to the old 'School House Rock' video of how a Bill Becomes a Law, here's a great example of how a bill becomes laden with pork. When introduced, the original purpose cost $30 billion but the final cost has risen to $70 billion. Votes Coming On California Pensions 6/29/2010 Voters will have a say on the amount public employees should conribute to their pensions. In San Francisco, a proposed amendment to the city charter would require city workers to contribute more to their retirement benefits. All Deficit Hawks Now 6/28/2010 Yesterday's news clip reported that the effect of government spending may not be as effective as thought. Now, G20 leaders have pledged to cut their deficit spending. Not too much, though, because they still want Keynesian economics to justify spending. Keynesian And World Stimuli 6/27/2010 Has Keynesian economics been proven to be an illusion? It holds that government spending has a 'multiplier effect' that has justified spending public money--even when the government doesn't have it. Now it appears the 'multiplier' is a mirage. DIY Economics 6/23/2010 Here is a helpful place to start for those who want to do their own economic research. Answering a question from a reader, columnist Ed Lotterman provides an informative source. Social Security In The Red 6/22/2010 Since the late 1960's, Congress has unified Social Security taxes with other revenues. This has provided a significant source of cash to spend on other things. That gravy train has ended according to thoughtful blogger Bruce Krasting. More On The Yuan 6/21/2010 China's decision to let its yuan rise will keep the raw materials it buys relatively cheaper. This could make it relatively more expensive for US consumers. China Devalues The Dollar 6/21/2010 China will let their currency appreciate against the dollar. The move will probably help avoid a trade spat in the short-term and make US exports more competitive where they vie with Chinese products. No word on whether China itself will open. The Trouble In The States 6/20/2010 Time Magazine has a story on the sorry state of the states. What's going on in New Jersey will spread to other states as they face their fiscal truths. State Pensions Funds Are Having Trouble 6/19/2010 States are beginning to admit they cannot pay the pensions they have promised to their employees. Some progress so far but most is balanced on the backs of future workers, not yet hired. While helpful, this isn't enough to stabilize state finances. Market Limit On US Debt 6/18/2010 We've posted stories about the statutory debt limit several times but what is the market limit? It's unlikely that we would have a bond auction where nobody came but, interest rates can rise quickly, Greenspan says. Official Chinese Position On Yuan 6/17/2010 There's a huge debate over the value of Chinese currency which many believe exacerbates the current accounts deficit. Secretary Geithner says the value is impeding economic reforms. Official China vehemently disagrees. Fannie and Freddie To Delist 6/16/2010 When the prices of a company's shares fall to less than $1, stock exchanges often delist them. Fannie and Freddie qualify for delisting and their federal regulator has so ordered. One wonders what effect Fannie's well-documented accounting fraud had. The Five Stages Of Municipal Loss 6/14/2010 Psychologists tell us that human beings deal with loss in predictable ways. This article, featuring the interesting title Deficit Inferno, suggests that these stages also predict how public officials will come to grips with fiscal deficits. Municipal Borrowing and Risk 6/13/2010 Are municipalities heading for bankruptcy? Investors place low probability on that but this article points out that the incentives to seek protection may begin to outweigh the disadvantages. What's missing here are the effects of accounting deficiencies. NY Pension Fund Accounting Trick 6/12/2010 Is accounting being used to make this New York State pension transaction look like it actually has an economic purpose? If one borrows from a bank and uses the money to pay back an oustanding loan, has anything really changed? Only in New York. Chinese Currency Value Aggravates Trade Imbalances 6/11/2010 China and the US are at odds over the value of Chinese currency. When it's cheap, we buy more and the balance of trade gets worse. Moody's Drops Illinois' Bond Rating 6/10/2010 In a move likely to be repeated in the near future, Moody's has downgraded Illinois' debt. Watch for the same thing in a state near you. Private Pensions In Trouble Too? 6/9/2010 We've been concerned with the shape of public sector pensions but what's the story in the private sector? Maybe not much better and the Pension Benefit Guaranty Corporation isn't fully funded either. NY State Cutting Health Care Costs 6/8/2010 Health care has become the largest single cost in several states. Whether the effect of federal mandates or local generosity, these entitlements are growing faster than other programs. New York is beginning to react and slow growth. Data Point: Connecticut Debt Rating Lowered 6/7/2010 The nation's weathiest state isn't immune to the effects of spending more than it is taking in. How Old For Social Security Benefits? 6/2/2010 When Social Security was created, the average life expectancy was less than the retirement age. Since then, we've remarkably extended longevity. One solution for Social Security's fiscal problems is to raise the retirement age. How much is too much? Fighting The Last War 5/31/2010 Armies often prepare to fight the last war. This may be the case in Europe, where central bankers are ever-vigilant to guard against inflation. Policy is designed to arrest inflation but what would happen if the lurking danger is deflation? Debt Reckoning Comng Sooner? 5/29/2010 The Bank for International Settlements blames cash basis accounting as one of the accelerators of the consequences of the real debt the US has piled up. The point is that a 'no confidence' vote by markets will come sooner than anyone thinks. California Municipal Bankruptcies Looming? 5/28/2010 Weak revenue is forcing spending cuts, layoffs and furloughs. But cost-cutting measures may not be enough to keep the town of Antioch's books balanced.The economic climate in California is so bad that many towns are discussing bankruptcy out loud. Money Supply Plunges 5/27/2010 If inflation occurs when too much money chases too few goods, what's the opposite? If the money supply drops, shouldn't prices drop too? So, if the M3 money supply drops faster than it did in 1929-1931, should we expect price depression? How Many Warnings Do We Need? 5/26/2010 Our credit rating is 'triple A'--for now--but the rating agencies are again threatening to lower it due to deficits and debt. If the score falls, interest rates will rise and the deficit will automatically increase. How many disater warnings do we need? Lessons From France? 5/24/2010 The French are set to help solve their social insurance problems by raising the retirement age from 60 years to a new age. Intense speculation surrounds the decision. Raising the Social Security Retirement age is one solution for the U.S. problem, too. European Social Model In Peril 5/23/2010 The Social Democratic model that Europe has enjoyed since the end of the Second World War is feeling the strains of economic realities. The American economy may face the same challenges sooner than we think given the size of federal and state obligations. Hidden Pension Costs Worsen New York’s Fiscal Crisis 5/22/2010 Errors, misunderstandings & wishful thinking are piling hidden new costs onto New York’s public pension system every year, worsening the state’s current fiscal crisis. And the problem is not just in New York. Attitudes Towards China Must Change: U.S. Professor 5/21/2010 Beijing has published the remarks of GWU Professor David Shambaugh who believes that China should be treated with 'true equity'. Overall, he's optimistic on Sino-American relations. Hard Work At The Bureau Of The Public Debt 5/20/2010 Short term interest rates are very low and in response, the Treasury has shortened the maturities on the nation's debt. That means the debt must be rolled over, frequently. We are in peril if the rates must be raised to sell the new paper. Tweaking Social Security 5/19/2010 Senator Kohl of Wisconsin proposes that only a few 'tweaks' are required to fix Social Security. Euro Collapse 5/18/2010 The continuing saga of the demise of European social policy and associated politics is manifesting in the value of the Euro. That's good news for the dollar but as Angela Merkel says, it just buys time. Summer Snowball? 5/17/2010 The Greek crisis is threatening to spread. Angela Merkel thinks the bail out is only a stop-gap measure unlikely to solve the problem. Will it spread? Germans Balking At Bailout 5/16/2010 The Germans have some experience bailing out failed socialist states. Their experience with East Germany's problems give weight to their opinions on the PIIGS and what should be done. Moreover, If the EU can't agree, why should the U.S. participate? An Objection To Low Interest Rates 5/15/2010 The president of the Kansas City Federal Reserve Bank has resevations about low interest rates. He's interviewed here but one must ask 'If rates went up, what proportion of short term federal debt would roll into higher rates and what of the budget?' Threadneedle Street Equates Greece and The U.S. 5/14/2010 England's Daily Telegraph reports that The Bank Of England finds that Greece's troubles also exist in the USA. They also believe the EU has the same weaknesses as pre-federal America. Portugal and the 'Crisis' Tax 5/13/2010 Portugal's Prime Minister Jose Socrates has noticed the Greek crisis and taken preemptive action. Among the plans are to increase the value added tax by 1% to 21%. Will we soon be seeing an American equivalent for the same reasons? Fannie Mae and Freddie Mac 5/11/2010 The bail-out of government sponsored enterprises continues with a requested cash infusion that will bring the total to more than $145 Billion. Analysts expect that at least $50 billion more will be needed. IFTA And Sheila In The News 5/10/2010 Here are a couple of recent articles featuring information or quotes from Sheila Weinberg, the Institute's founder. Lessons from Britain 5/10/2010 Michael Barone analyzes the results of last week's elections in Britain. The take-away may be that many voters have changed their vote to reflect disapproval of the out-of-control spending occuring in both countries. Fannie and Freddie To Escape Regulation? 5/9/2010 Many analysts believe that among the primary causes of the financial meltdown were Fannie and Freddie's business practices. The proposed financial regulation bill does not address these GSE's evident shortcomings. This will cost future taxpayers plenty. Accounting and Accountability 5/7/2010 GM's recent fib about paying back its TARP debts has moved from accounting to accountability of the company's owners in Washington. Financial 'Reform' Becoming Intrusive 5/6/2010 The Financial Reform Bill has surprises for consumers. In one little reported feature, the feds will begin collecting consumers' financial transactions and be able to data mine it. This places citizens at the disposal of government, not vice versa Los Angeles Facing Bankruptcy? 5/5/2010 Is Los Angeles on the verge of bankruptcy? This article makes the case that it is and point to accounting estimates as a big part of the problem. The authors, including a former mayor, suggest remedies for LA where they think is 'the best place to live'. Federal Pension Agency Fails Audit 5/4/2010 The agency that guarantees failed private sector pension plans has failed its audit. Citing 'material weakness' in its financial controls, the Pension Benefit Guarantee Corporation gets a qualified opinion from its inspector general. Greece Pays The Piper 5/3/2010 Greeks are preparing for 'violent modernization' as they accept the biggest sovereign bail-out ever. The biggest price will be paid by the public sector where wages will be frozen and pensions cut. Is there a lesson for states coming from Athens? Maybe It's Cheaper To Bail 'Em Out 5/2/2010 Lehman wasn't bailed out but that path may have been cheaper than cost of administering its bankruptcy. Health care and lawyering are the only two industries that don't have a learning curve which reduces costs as activity increases. Cities Considering Bankruptcy 4/29/2010 Harrisburg PA is considering a Chapter 9 bankruptcy as a strategy to survive financially. As the financial miasmas in which cities find themselves proceed, bankruptcy is becoming a more likely option. Will states soon ask for their own bankruptcy law? Financial Reform Moves In The Senate 4/29/2010 The Senate will debate the 1.200 page "reform" bill now that the Republicans have dropped their filibuster. Here are the four largest points of contention. Bailouts of 'too big to fail' financial institutions appears to be on both parties' minds. Get Ready For 'Shared Sacrifice' 4/28/2010 Chairman Bernanke says the budget deficit is on an 'unsustainable path'. Coincidently, the president commissions a blue ribbon commission made mostly of politicians to suggest new taxes the president knows are politically toxic. Accounting Assumptions and Public Pensions 4/27/2010 California-and many other states-have accounted for their pension obligations assuming high rates of return. New research questions these calculations,finding the unfunded liabilities much higher than previously thought. Fund managers aren't buying it. Sanity In StateGovernment 4/26/2010 Illinois State Rep. Jim Watson has proposed a Fiscal Charter that make a lot of sense for Illinois and other insolvent states. It includes The Truth In Accounting Act that the Institute helped co-author. There's a link to the bill, below. IMF's Advice To The Wealthy 4/24/2010 Get used to 'Rebalance' and 'Consolidate' as International Monetary Fund code words for devaluation and higher taxes. The men in black from the IMF usually dispense their advice to third world bankrupts but now they're targeting the US and our friends. VAT Tax Thoughts 4/22/2010 Governing Magazine, the journal of record for state and local officials, takes on the VAT tax. Why Isn't Fannie and Freddie Included? 4/21/2010 No sentient person believes the timing of the SEC's suit aginst Goldman Sachs is a coincidence. What's missing is any new regulation of the biggest problem in the financial markets, government sponsored enterprises Fannie Mae and Freddie Mac. Why not? Ambivalence Over Goldman Sachs 4/20/2010 Financial observers are torn over the schadenfreude of bailout beneficiary Goldman-Sachs getting into SEC trouble and the over-reach of federal regulators. This article makes the point that the SEC's legal theory may be a stretch. China Takes On Paul Krugman 4/19/2010 Chinese editorialists make the point that China is "piling up greenbacks" and believe they should stop. An interesting fact from the article--China has a trade deficit. Hard to believe from this vantage but U.S. policymakers should pay attention. Public Engaged On Public Pension Plans 4/18/2010 The problem with pensions is no longer a future concern. Illinois has just raised its public retirement age to 67 and capped benefits. That's a good step for 35 years from now but what about the accrued benefits? Here's the flavor of local coverage. Jobs Bill: Two Views 4/16/2010 Two reports on the Jobs Bill. As compassionate as it is, distinguished economist and Democrat advisor Larry Summers says the new law may help keep unemployment high. Banks Runnng Ponzi Schemes? 4/15/2010 We'll resist the temptation to post a tax story today and post this on on the banks. From the Huffington Post, this speculates that the nation's big banks weren't much better than Bernie Madoff. Congress To Ignore Budget? 4/12/2010 Is Congress in denial? Reports here say that the budget is too painful to put on public display...during an election year. Spending beyond our means is America's greatest challenge. If you want to solve a problem, you first have to acknowledge it exists. Man Bites Dog! 4/9/2010 From our vantage, it's almost inconceivable that China would have a trade deficit. The truth is, they buy lots of commodities and with a rising economy, consumer goods. They are probably paying for those imports with their dollar hoard. California's Real Pension Crisis Exposed 4/8/2010 Using realistic earnings assumptions exposes California's pension problem as far worse than previously reported by the pension funds' managers. California is not alone; other states have similar problems for similar reasons. Congressional Temper Tantrum 4/6/2010 Earnings announcements required by securities laws upset members of Congress enough for them to call for hearings. The reason? Firms must actually calculate the full, present value effect of new laws. Apparently, Congress does not understand this idea. A Soak The Poor Tax Coming? 4/5/2010 Conventional wisdom foresees a Value Added Tax. Since it’s regressive, progressives will tinker and politicians will sell influence. If we’re to have a consumption tax, why not the ‘Fair Tax’? Economists say it will grow the US fastest. China's Hu Coming To Washington 4/3/2010 Under the cover of a nuclear summit, Hu Jintao will visit the U.S. next week. More interesting may be any talks he has with treasury officials. Chinese To Redistribute Wealth...With A Social Security Tax 4/2/2010 China considers a national social security tax to redistribute income. If they do not already redistribute income why do we call them Communist China? Sheila Weinberg On 'Monsters and Money' 3/31/2010 Here's The Institute's Sheila Weinberg on CBS Channel 2 Chicago's Monsters & Money in the Morning. Budget Woes Press States Into Questionable Cash Grabs 3/30/2010 Desperate states are quickly grabbing cash in ways that signal there's something systemically wrong. Courts are curbing these schemes but the trend is disturbing. Goldman Loses Bet Against US Dollar 3/29/2010 Goldman Sachs cynically bet against the greenback after influencing the Feds to get them a better AIG settlement. It's a wager that's proven to be a bad deal for these masters of the universe. Markets Anticipating Local Governments' Troubles? 3/27/2010 For the first time in memory, investors are selling municipal bonds on credit concerns. Also, several private companies sold their debt for better rates than the U.S. government got last week. Are markets 'ahead of the curve' and what's their message? What If They Gave An Auction And Nobody Came? 3/26/2010 Diminishing interest is U.S. debt is beginning to push rates up, regardless of Bernanke's approach. This Wasn't Supposed to Happen Until... 3/25/2010 The Social Security Administration is beginning to cash those IOUs that make up their 'trust funds'. This was not supposed to happen until much later in the decade. Now there's talk of 'strengthening finances'. That sounds like a tax increase. State Pension Troubles Inevitable 3/24/2010 Trillions in local government pensions are changing the primary object of local government from filling potholes to paying pensions. Municipalities can escape these debts by declaring bankruptcy but states cannot. Do we need a new bankruptcy chapter? Promises, Promises!! 3/22/2010 'Health Care' was sold on reducing US debts. Not likely. Besides cooking the CBO estimate, Congress is salvating over 4 years of taxes without having to provide benefits. Don't believe it? Remember the government's handling of the Social Security trust. The New Trickle Down Economics 3/20/2010 Now that the government owns GM, it should be a reliable customer. Not so for tool makers waiting to be paid. These small businesses are now seeking TARP relief to stay afloat. If trickle down economics aren't good, how about trickle down bankruptcy? @Recovery.gov 3/19/2010 The federal government's web site is always an amusing visit if it weren't so devastating for the next generation who will have to pay for it. Illinois: The Problem Child Of State Finances 3/18/2010 Illinois may be in the worst financial condition of any state. Its politicians have so stretched the definition of what can be constitutionally spent that the state has accumulated a $100 billion debt and will be 47% short on this year's budget. Mass Treasurer Predicts US Bankruptcy 3/17/2010 With the state's experience with its own form of public health care, Massachusetts' treasurer says federal aid has propped up the state's plan so Congress could pass a national plan. Tim Cahill fears the plan on the table will 'bankrupt' the USA. Choices Coming For Municipalities 3/15/2010 Aging infrastructure will be competing with pensions for local tax revenues, soon. Kibitzers at this recent water main break highlight the coming controversy. State and Municipal Pensions The Next Bail Out? 3/13/2010 This eye-opening story from Bloomberg shows that the truth about public pensions is beginning to become evident. Years of neglecting their funding combined with false and misleading assumptions by public officials have brought financial disaster. The China Model 3/12/2010 The Chinese discuss the 'China Model' and reasons for their three decade march from a planned economy to a market-based manufacturing powerhouse. Battle Lines Forming Over Deficits 3/11/2010 As developed countries ponder their accumulated debts, politicians are looking for ways to pay them. The Economist advises honesty about the sizes of the debt. We couldn't agree more. States Double Down On Pension Funds 3/9/2010 Worried about funding shortfalls, states are increasing pension fund investment risks. Having ignored their fiduciary obligations for years, this strategy reminds one of an embezzler, about to be caught, taking big chances to put the money back. Schools Going To Four Days? 3/8/2010 The USPS is trying to drop Saturday deliveries to save cash. Now, some schools are going to four day weeks. Have public institutions just become too expensive? The unfunded costs at the state level are almost entirely due to employee costs and pensions. At first, slowly, then quickly... 3/7/2010 NIALL FERGUSON suggests imperial collapse may come much more suddenly than many historians imagine. A combination of fiscal deficits and military overstretch suggests that the United States may be the next empire on the precipice. Rep. Tryon Introduces the Truth In Budgeting Bill 3/6/2010 Here's some great news from one of the Institute's friends, Illinois State Rep. Mike Tryon on the Truth in Bugeting Bill. With the Institute's help, Florida legislators are introducing their own version. Hat Tip to The Illinois Observer! Congressman Ryan on Health Care 3/4/2010 Wisconsin representative Paul Ryan hits it exactly right asking how we will pay for the nation's existing entitlements let alone new ones. Our debt clock, nearby, shows the problem. China Debates Its Economic Policy 3/2/2010 China is debating its economic model and it appears that we can learn something from the world's most dynamic economy. This China Daily editorial's first sentence directly contradicts current U.S. policy. Assumptions Make The Difference 3/1/2010 Showing just how much the assumptions matter, CalPERS, the California agency that is one of the largest pension administrators, is considering reducing its earning assumptions. If it does, the amount California taxpayers will have to kick in, skyrockets. California A Bigger Risk Than Greece? 2/28/2010 Banker Jamie Dimon makes the case that California presents a bigger risk to investors than Greece. Combine his opinion with the data from the recent Pew Center for the States and the perception of financial danger rises exponentially. The Architect of Social Security 2/27/2010 If you have ever wondered why the Social Security retirement age was set at 65, read on. The Robert J. Meyers, who made the policy has died, after having been eligible for 32 years of Social Security benefits. Meyers was one of the last New Dealers. Banks As Casinos 2/25/2010 Greece's financial crisis is in full bloom. Banks who once helped hide Greece's fiscal problems have switched sides and are now rooting for default. Has Greece--and its creditors been set up to fail by the bankers? 'Blatantly Dishonest Accounting' 2/24/2010 Them's fightin' words for the Institute. On the eve of the health care summit, IBD states the obvious: ten years' of taxes for five years of benefits violates the most basic accounting principle of matching revenues with expenses. Try that with the SEC! Soros on the Euro Crisis 2/22/2010 The situation in Greece and the Euro is having a negative effect on American markets and the dollar. George Soros says the basis for the euro is "patently flawed". Should we expect him to try to break the euro? Governors Say States' Prospects Dim 2/21/2010 The economy is pressing the states' fiscal conditions and the governors do not see recovery as fast as the general economy. They are wary of health care mandates and the local tax increases that will be required to fund them. Interest Rates Headed Higher 2/20/2010 This article shows why economists often say 'but on the other hand...'. What it misses, however, is that our foreign creditors are not happy with the amount of U.S. debt outstanding. Keeping them invested in treasuries will propel rates upward, faster. China Losing Appetite For U.S. Debt 2/19/2010 Hard on the heels of news that Social Security has just become a net cost to the government, China is beginning to let U.S. debt roll off. With these two sources of federal funding drying up, where will the money to finance U.S. debt come from? This Wasn't Supposed To Happen Yet 2/18/2010 Social Security has now gone into the red. According to this blog, the system now pays out more than it is taking in. This tipping point comes much earlier that the government previously reported. Social Security is now a net loser for the Treasury. The Banks Have Mostly Repaid 2/17/2010 Now that most of the banks have repaid their bailouts at a profit to the government, one wonders how much trouble they were in in the first place. Chasing The Fed 2/15/2010 Here at the Institute, we're concerned with transparency in government. Here's the story of one reporter's battle to find out what's happening at the Fed. It shows how bureaucrats regularly ignore Freedom of Information Act (FOIA) requests. Is Wall Street A Little 'Greecey' 2/14/2010 In every crisis, one finds winners and losers. In the Greek melt-down, we find U.S. bail-out winner, Goldman Sachs, at the center of controversy, once again. The Truth About Deficits. 2/10/2010 Newsweek's Evan Thomas writes about Obama'a 'other deficit' and advises telling the truth about deficits. Thomas might want to take a look at the real debt clock, shown above, and recommend telling the whole truth. Unlimited Guarantees Get Used 2/9/2010 The unlimited guarantees are supporting the two government sponsored entities. There is no evident exit strategy. What Does The Secretary Know That We Don't 2/8/2010 Treasury Secretary Geithner's prediction that our bond rating will remain AAA is based on...what? The warning from Moody's is bad enough, contradicting the ratings agency seems foolhardy. The Corrosivity Of Debt 2/7/2010 The Greeks are attracting blame for threatening the Euro after revealing their annual deficit will be 12% of GDP, not the 4% previously reported. Wait! Isn't that about the same thing we're doing here? 51% of Greece's budget are public wages and pensions. Employment Picture 'Murky' 2/5/2010 There were 20,000 fewer jobs available in January yet unemployment went down to 9.7%. This mathematical curiosity is actually signaling that many workers have not only exhausted unemployment benefits but, just as importantly, their hope of finding work. Accounting Problems In Unemployment Numbers? 2/4/2010 The Labor Department needs to tell us the truth about unemployment numbers. Their accounting seems to be based on an active imagination, pulling numbers out of their hat,according to this article. The Cost of Debt 2/3/2010 Heather Wilhelm, one of our favorite commentators, on David Walker, the crush of debt facing the U.S. and the president's budget. Extreme Budget Proposal 2/2/2010 The president's proposed budget is fully one-quarter of GDP or 22% more than the 40 year average. If classic pump priming works, we should soon enjoy a roaring economy. If not, our kids will pay. $3.8 Trillion Budget Proposed 2/1/2010 The Administration has proposed a budget that spends $1.6 Trillion more than it receives in revenues. If that's not bad enough, the Feds are busy running up unfunded liabilities for entitlements. Unbalanced 1/31/2010 How can you determine if your government's budget is truly balanced? Hints Of The President's Budget 1/31/2010 The president announced spending freezes at the State of the Union address but are they meaningful? By exempting entitlements, the major source of our mushrooming debt remains unchecked. Sheila Interviewed By NOCW 1/30/2010 Sheila Weinberg discusses the concerns of the Institute during an interview by NOCW. Intergenerational Equity 1/29/2010 The best reason to eschew debt is to avoid making our chldren pay our bills. Here's a neat explanation of governments' burden in terms of generational accounting. Spending Ratchet Only Goes One Way 1/28/2010 The president's plan to freeze some spending deserves a closer look. Having substantially raised spending on purposes that aren't recession-related, he proposes to now freeze them at their new, higher levels. US debt will surely increase, as a result. Organized Entitlements 1/27/2010 Open-ended entitlements for individuals or government sponsored entities go a long way to explain why the US has $74 trillion in obligations. Here's the story on Fannie Mae which now enjoys the unlimited support of the Treasury...which means taxpayers. Fed To Change Interest Rate Benchmark? 1/26/2010 Apparently unable to control the Federal Funds rate as a consequence of the huge amount of cash that's been injected into the US economy, the Fed is considering a new benchmark. What happened to the notion of Just The Facts 1/25/2010 Congress will raise the debt limit soon because it is running out of authority to borrow. Here's a very simplified list of debts "subject to the limit". Shouldn't all U.S. debt be subject to the debt limit? How Is This Bipartisan? 1/25/2010 America's debt problem is one we must face immediately and a commission to develop a strategy is a good idea. To gain widspread support however, it must include views from both parties. This story reports the idea is becoming a unipartisan initiative. Is The US Economy Doomed? 1/24/2010 Two professors offer 20 reasons why the US economy will not recover shortly...if ever. They blame debt and provide easily understood evidence that a depression is on its way. China Says It Has Recovered 1/22/2010 As Americans worry about a double-dip recession, our Chinese rivals say they have recovered. They are now more concerned with inflation,a problem the American economy will surely face when we turn the corner. This may be a glimpse of our future. Debt Limit To Rise 1/21/2010 Congress will soon raise the debt limit by about 10% to more than $14.3 Trillion. Why isn't there a limit on the size of unfunded liabilities? Perhaps more honest accounting would help. Partisan Deficit Commission Agreed 1/20/2010 With all the hoopla over the Massachusetts election, you may have missed the agreement between congressional Democrats and the White House to create a "Deficit Commission". Regular Visitors Will Notice... 1/18/2010 If you are a regular visitor to our site, you will notice that we've changed the welcoming video. It dramatizes the question of making decisions with all the facts, a practice we should ask our leaders to always take. Watch it all for other new clips! China Attracts Investors 1/17/2010 China's Foreign Direct Investment has doubled recently showing the Middle Kingdom is attractive to investors seeking their fortunes. Chinese leaders say this shows the country is well onto recovery. US Still Leads In Science But.... 1/16/2010 The US still leads in science but, measured by the nationality of PhD graduates, we are training the rest of the world. In addition to debt and trade gaps, do we have a PhD gap and if so, what will it take to keep these bright scholars productive here? The Monopoly Game As An Economic Metaphor 1/15/2010 Amity Shlaes from the Council on Foreign Relations looks to culture and markets to explain our economic prospects. Taxing Big Banks 1/14/2010 The administration announces plans to tax big banks to recover the money spent to bail out the financial sector. Recession Redux 1/12/2010 Do tax cuts and smaller government work to end recessions? Two of our favorite commentors say we are in the same position as we were in 1981, just before the Reagan cuts. Now, we're trying the opposite strategy; what will happen? Bailout's Costs Told 1/11/2010 The 'profits'from bank bailouts are being offset by AIG, automakers and bad real estate loans. Win some, lose some... from Reuters. California First To Seek Fed Bail-Out? 1/9/2010 The states are beginning to line up outside Congress' door. California is the most obvious but Illinois, New York and Arizona may soon follow. Shouldn't all states get in line now to protect their taxpayers from funding other states deficits? Washington Office Space Pricing Predicts More Bureaucrats 1/8/2010 Many observers believe that bad commercial real estate loans will be the next heartburn for banks. Not so for D.C. properties....prices and occupancy rates for office buildings are up. Investors seem to be predicting a more expensive government. NY Governor Takes Representatives to the Woodshed 1/7/2010 We believe 2010 will be the year that states replace banks as the organizations with most pressing financial problems. New York is a good example of the looming problem and Gov. Paterson observed that other states have similar problems. The Power of Compounding Growth 1/5/2010 Try this. Sit down with a calculator and punch in a 5% growth rate. Multiply 1 by 1.05 then that answer by 1.05. Do it ten times. Then try the same process with 1.07. Quite a difference! Here's an article that re-evaluates 'the aught's' growth. For Once, Illinois Leads The Nation 1/4/2010 As an Illinois-based organization, we are always interested in local developments. In this story, Illinois shows the way...to bankruptcy through politics? Some Good News--Savings Rate Up 1/3/2010 Americans are saving more and if the family in this story is any indication, we are changing our consumption patterns. That's good news for a nation drowning in private and public debt. When Entitlements Run Out Of Money 1/2/2010 The Mayo Clinic has stopped taking national health care, that is Medicare, patients at its location in Phoenix because the government doesn't cover the direct costs of providing health care. Little wonder--Medicare is $38 Trillion in the hole. Bankrupt Bookends 1/1/2010 New York State's general Fund ended in the red for the first time in history. Now the state's anchoring the Atlantic and the Pacific are essentially bankrupt. These,and other states with similar troubles, will be the story of 2010. Another GMAC Rescue--The Perfect Coda For 2009 12/31/2009 The Treasury has injected another $3.8 Billion in exchange for majority control. It's a consequence of failing to raise $9.1 in new equity after this fall's stress tests of troubled financial institutions. Is this more deficits for our kids to bear? The Ghost Of Financial Crises Yet To Come? 12/30/2009 With apologies to Charles Dickens, are state and municipal financial troubles in our future? Can they be avoided like Scrooge avoided his by governments and public employee unions changing their ways? Accounting Problems With Health Care Bills? 12/29/2009 The Congressional Budget Office says the health care legislation passed by the Senate double counts savings. The trouble seems to be the government is able to choose situational accounting rules. Goldman Sachs On The Dole...Again? 12/28/2009 Another example of the premiere banking firm's firm control of government. This time it's tax- free bonds to build a new HQ building near "Ground Zero". Interestingly, The New York Times reports Goldman's name will not adorn the structure. 'Shovel Ready' Not The Answer? 12/27/2009 Hedge fund manager Andy Kessler's different view on how to spend--or maybe invest--in our future. Fannie and Freddie Covered For Unlimited Losses 12/26/2009 Fresh from raising salaries at these government owned entities, the Treasury announces unlimited bailouts. Are the TARP funds returned by banks facing salary caps financing this? Season's Greeings From The Institute 12/25/2009 During this season for giving, we are thankful for the gifts we have received from our visitors, volunteers and contributors. Thank you for your attention, time and the resources that are propelling the Institute into a new force for truth. No Pay Czar at Fannie or Freddie 12/24/2009 Fannie and Freddie disclosed they have raised their CEO's pay packages. How are they different than the private companies who have to deal with the Pay Czar? Maybe if these two had pay restrictions, they would pay back the taxpayer's bailouts, too. End Of Life Care 12/23/2009 America's debt crisis is largely due to entitlements. Medicare is the largest of these and among its largest costs are caring for very elderly and terminal patients with only days or months to live. How China Sees Copenhagen 12/22/2009 A face-saving article on China's role at Copenhagen. This article suggests western media didn't do the job it's expected to do. In the long-run, did China act rationally and do the planet a favor? Better News On Mortgage Workouts 12/21/2009 The key seems to be reducing payments by at least 20%. Better asset performance should help TARP recipients survive--and pay down the debts they owe US taxpayers. From Copenhagen 12/20/2009 The meeting ended on Friday in chaos. Here's what the conferees did manage to agree on. Federal Transparency Coming 12/19/2009 Steve Cook, a CPA in Texas reports that the FASAB has issued requirements that the Federal Government report its financial condition truthfully. Debt Keeps Piling Up 12/17/2009 The Federal Government is out of control when it comes to spending. They seem to be spending in the same way one would just before declaring bankruptcy. Dealership Ressurections 12/16/2009 GM and Chrysler tried to reduce their dealer network for years only to be stymied by state politicians. The bankruptcy and takeover by the feds allowed the companies to downsize their networks. Now, federal politicians are resuscitating closed dealers. One Study Confirms Health Care Reform Costs 12/15/2009 Here's the Lewin Group's analysis of the plan passed by the House and the plan on which the Senate will soon approve. From the Peterson Foundation. China's Economy Coming Back To Life 12/13/2009 The Chinese are enjoying a surging economy. The fact that imports are up is good news for the rest of the world but, what are they importing? One answer is western car companies--like Hummer and SAAB--a bigger version of 'cash for clunkers'. Medical Care and Technology 12/12/2009 One enduring theme in the health care debate is digitization and here's a story about one entrepreneur on the front line of electronic medical records. He offers insight and wisdom we should consider as health care is reformed. Trade Deficit Narrows...Slightly 12/10/2009 Each year, Americans export about 1-1.5% of the country's wealth to those countries willing to make products and services for us. The weaker dollar is improving exporters' prospects but overall, our trade position is dismal. Then, there's the debt.... Should Public Employees Contribute to Their Pensions? 12/8/2009 The pension and other post-employment benefits promised to public employees are sinking many jurisdictions. Should employees help fund their own pensions? The comments this article received are well worth reading. Good News On Bailouts? 12/7/2009 The Treasury now says it will lose $42 billion on the $370 spent on bailouts. On the other hand, new loans may lose $100 billion. At best, that's an 11% loss. By the way, Kuwait announced it's made a 37% profit on its Citibank rescue. James Grant Has His Say 12/6/2009 One of the best on the dollar's situation with an excellent historical seasoning. Just the thing for a Sunday afternoon. Prudence or Politics? 12/5/2009 Is Illinois Comptroller Hynes acting prudently or politically in denying permission for the governor to borrow another $500 million? This is a decision that will be coming to many states. 'Until There Is More Clarity' 12/3/2009 White House job summiteers should tell the president that they hire when doing so will create profits. With Cap&Trade, Health Reform and Card Check costs looming and anti-business rhetoric foreshadowing more employment costs, new hires will stay rare. In Defense of The Federal Reserve 12/2/2009 The economic meltdown has put extraordinary demands on the Fed. Some see this is as mission expansion and that demands an audit of the Fed's activities. Here's an alternative view from Forbes. The Debt Argument 11/29/2009 While The Institute consistently warns about our debt, others believe it doesn't matter as much as we think. One of these is Paul Krugman and here's a revealing exchange from The Atlantic. What Happens When Too Much Is Spent 11/28/2009 The equivalent of printing money in the Mideast is to pump more oil but even that has its limits as Dubai--and world markets--are discovering. From the Canadian Broadcasting Company 'Balanced Budgets' Running Out Of Cash 11/27/2009 A state's resources are not infinite. After exhausting every possible budget trick to spend more, eventually, states simply run out of cash. That appears to be the case in New York State which figures it has only $36 million on hand. Accounting Gimmicks Used to Justify Health Care Bill 11/24/2009 The accounting used by the supporters of health care 'reform' to estimate costs are shown to be untruthful in this article. Mark Twain had a great description of what's what's exposed here. Is The Punchbowl Running Dry? 11/23/2009 One Federal Reserve chief described responsible economic behavior as removing the punchbowl just as the party gets going. Low interest rates may be the punch that's being removed. New Stimulus Plan Gaining Traction 11/21/2009 The New York Times reports that 'liberal' economists are reaching consensus on another stimulus plan. Perhaps they will tell us why the first one didn't work, before planning a new one. Tax More...Get More Of IT? 11/18/2009 Regulators want to raise taxes to get greater penetration of information technologies and broadband. How does that work? Chinese Believe US is Inflating Its Currrency 11/17/2009 As president Obama visits, Chinese bankers explicitly accuse the U.S. of inflating its way out of its debt. TARP Debtors Miss Payments 11/16/2009 A report on the fate of TARP bailouts from The Huffington Post. The President Visits The Bankers 11/15/2009 President Obama is likely to be interrogated like a failing debtor by America's largest creditor. China Stories 11/14/2009 American purchases from China have helped make them an emerging power and the U.S. a debtor nation. In posts today, a look a both factors. Debt Reduces Options 11/13/2009 As any homeowner with too many obligations knows, debt reduces options. The same is true for nations. Pew Lists States In Trouble 11/12/2009 A list of the disaster states in the most trouble from The Pew Charitable Trust. Borrowing Binges Catching Up 11/11/2009 Given the states' precarious financial positions, many observers wonder why the credit markets are still so easily accessible for the states. That may be changing as California is beginning to discover. Controversy Over A Fed Audit 11/10/2009 The recent actions of the Fed mystify many and the remedy, in their view, is an audit. Every other bank is audited but the Fed is resisting. Here's an academic rationale for the Fed's reticence. Another Reason For The Meltdown? 11/8/2009 Depending on one's perspective, there is plenty of blame for the meltdown. From Forbes, here's an opinion that holds technology was just as much to blame as greed, over-regulation or the CRA. Another Budget Commission 11/7/2009 As part of raising the authorization to raise federal debt, some legislators are proposing a new blue ribbon commission on debt. Here are Bruce Bartlett's observations from Forbes. Accounting for Jobs 11/5/2009 Once, at the Road America race track, the extremely rare and exotically expensive McLaren race car was honored. One wag observed that 'all 11 of the eight ever built are here.' Is the same accounting technique in play when counting stimulus jobs? Tom Sowell On Health Care 11/4/2009 The sixth installment of the series. Withholding Scam In California? 11/4/2009 California has a clever idea--increase withholding amounts but not the underlying taxes. How long until other states adopt this imaginative technique and if the legislatures spend the money, are their budgets still balanced? Thomas Sowell on Health Care 11/3/2009 Part Five in the ongoing series from Investor's Business Daily. Migration In America 11/3/2009 Where are the hip places to move? If it's for economic opportunity--the primary reason to pull up stakes--the answers are suprising. From Forbes, an assessment of our internal ebb and flow. This has huge implications for state finances. Does Washington Know What It's Doing? 11/2/2009 Federal Reserve Chairman Bernanke comes under attack for fundamental misjudgments in Forbes. CitiBank Bailouts 11/1/2009 Assessing the nation's total liabilities is made more difficult by unforeseeable events. Given the regularity of some bank's failures, perhaps we should explicitly recognize some provision for future financial melt-downs. Thomas Sowell On Health Care: Part Four 10/31/2009 The next installment... Cash For Clunkers Adds To The Deficit? 10/31/2009 The popular program certainly jazzed GDP but some believe it simply subsidized sales that would have occured anyway. If so, we paid--or our children will pay--$24,000 per sale the program created according to one source. The White House disagrees. Tom Sowell On Health Care 10/30/2009 Part Three of the economist's views on the realities of health care. GDP Resumes Growth 10/29/2009 US GDP grew at a 3.5% clip in the Third Quarter signalling an end to the recession. But many wonder when jobs will also resume growth. Sowell On Health Care 10/29/2009 Our link to Part Two of Thomas Sowell's thoughts on health care. From Investor's Business Daily Getting Beyond Stage One 10/28/2009 Thomas Sowell, once a Marxist, has written a new book which includes a chapter on medical economics. Investor's Business Daily is serializing it over the next several days and here's part one. We'll link subsequent parts as they appear. The Case For A Second Stimulus 10/27/2009 Politicians tell us the original stimulus plan was back-end loaded because 2010 is an election year. 'Just wait' they say but that hasn't stopped some from agitating for a second stimulus plan, now. Here's their case from The New York Times. The Shape of Things To Come 10/26/2009 Illinois State AFP Director Joe Calomino appears in The Chicago Daily Observer and points to a problem that is coming to most states. Dollar Dumping Difficulties 10/25/2009 The advocates of dumping the dollar have great conflicts that make it difficult for them. Irwin Stelzer explains. Does Congress Get It? 10/23/2009 Federal spending is creating new debt that is bumping up against the debt limit. The problem is that Congress only limits a small part of the nation's obligations. The real number is in the upper right corner of this web page. Support For An Audit Of The Fed Grows 10/22/2009 The Federal Reserve has not been audited, an essential function of proper accounting. Support for an audit is growing in Congress and the Institute agrees that one should be conducted now. Paul Volker: Too Big To Fail? 10/21/2009 Paul Volker's financial acumen collides with The White House's vast banking experience. Estimates Are Almost Always Low 10/20/2009 Over the years, initial estimates of the costs of entitlements are almost universally underestimated. We published a similar study--with similar findings--more than a month ago. One exception to this iron rule is the prescription drug benefit. Wait Until We Have To Pay It Back 10/17/2009 Monetization looks ever more likely as the deficit comes in at $1.4 Trillion. On The Dollar: 10/16/2009 We've worried about the dollar for a long time but, from The Economist,here's some alternative views. Wisdom on Inflation 10/15/2009 An erudite article from The City Journal that confronts inflation on a moral plane. Long, but worth the read. Dollar No Longer A Store Of value? 10/14/2009 Some thoughts on the declining dollar. Bail Outs For OPEC? 10/13/2009 The Saudis want compensation for lost revenues due to climate change treaties. Trouble For State Pensions 10/12/2009 According to this analysis, state pension funds will be at 50% funding within a decade. The data we've seen agrees and maybe, sooner. So much for rosy predictions. Bank Failures Hit 100 in 2009 10/11/2009 The FCIC has taken over its 100th failed bank this year. This is the flip side of banks 'too big to fail' and the costs threaten the FDIC's solvency. Trade Imbalance Improves 10/10/2009 America's trade deficits have improved. That's good news but the underlying reason is not that we are exporting more, it's that the financial melt-down is forcing us to consume less. Truth in Accounting 2009 Fall Newsletter 10/9/2009 Eventful Summer Leads to Busy Fall Plot Against The Dollar? 10/9/2009 The UK Telegraph reports a 'plot' against the dollar. Why is there so much news about the dollar in the foreign press and so little in our domestic news? Dollar in Freefall? 10/8/2009 One of the Institute's main concerns is the value of the dollar. This Wall Street Journal article shows why. New DC Hiring Scheme Coming? 10/7/2009 The federal government may be spending more to subsidize moribund hiring. Maybe it should investigate why it's so expensive for small business to hire new workers first. Oil Producers Plotting Against Dollar? 10/6/2009 The British press is reporting that the oil states, including Brazil and Russia, are working to replace the dollar in oil transactions. These reports are becoming too prevalent to be ignored and presage an economic disaster for the U.S. Quick Check On Federal Spending 10/5/2009 When asked how much we spend on defense, many people think about half of our budget goes into that category. Actually, it's just 13%. If you want a quick look at where the other 87% goes, here's the data. California: A Failed State? 10/4/2009 We keep an eye on California because it is the canary in the coal mine. It is also the state that reported a good financial condition just two years ago. One wonders just how truthful those reports were. Problems Emerge As Communist China Reaches 60 10/3/2009 The perception of the Chinese economy may be different than the reality, according to this analyis from The Far East Economic Review. Repatriating American Manufacturing 10/2/2009 From an unusual source Kid's Today magazine, the story of one company bringing manufacturing back from China and Vietnam. The reasons cited are qualitative rather than cost. New Year's In Washington 10/1/2009 Today is the first day of fiscal 2010. While the economy is in tatters, how much is Congress spending on its own operations? Here's an interesting report that shows our legislators continue to grow government at a level far beyond that of the economy's. State Tax Revenues Tumble 9/30/2009 The lights are on in state capitols as legislators invent new entitlements. This, despite the fact that 49 states are struggling with substantially lower revenues. Only one state had increased revenues--any guess which one? Volker's Pessimistic View 9/29/2009 Paul Volker, the Fed Chief who whipped inflation, offers a dark view of the economy and of America, generally. Transparency Heros 9/28/2009 The Los Angeles Times salutes several transparency heros. This is a clip and save list. Banks Set To Report Huge Losses 9/26/2009 Large banks are likely to book losses that are much higher than ever before. It's tough to pay back the TARP loans when operations lose these staggering amounts. Guaranteed Public Pensions Better Than 40(k)s 9/24/2009 Market Watch distinguishes between private and public pensions. Where Does The Money Go? 9/23/2009 According to this article, Americans believe that half the money that flows to the government goes...where? Option Arms In Trouble 9/23/2009 As if the financial meltdown wasn't enough, Option Arm mortgages are about to reset, adding pressure to the already battered residential mortgage markets. Fixing Health Care with Common Sense Technology 9/21/2009 'Electronic medical records' is a big part of health care reform. Here's an article from Baseline, a web site for IT professionals, that illustrates the opportunity to improve medical care with technology. Maybe we should try this, first. One Analyst's View on the Dollar 9/19/2009 With rumors that BRIC countries will move to replace the dollar as the world's reserve currency in October, here's an emerging markets' expert opinion on why. Affordability of the Senate Health Legislation 9/18/2009 A good analysis of the competing interests in the Senate Finance Committee's bill. From the The Washington Post. Senate Finance Committee's Plan 9/16/2009 The first story on the last prescription for the entitlement plan. From The New York Times. U.S. Credit Shrinking 9/15/2009 Critics of the Federal Reserve will ask for an audit of the bank at a rally today. It will occur at 2:30 at State and Van Buren in Chicago. Sheila Weinberg has been asked to speak at the event. Reluctant Sharehholder? 9/14/2009 The notion that the financial industry must be much more regulated or it will be nationalized is the elixer the president will prescribe for Wall Street, today. Demicrats Warn They Will Move on Health Care 9/13/2009 Democrats say they will move on health care--the largest entitlement ever--with or without Republicans. Cap and Trade II? 9/12/2009 With all the contention over the health care debate, it's easy to forget Cap-and-Trade looms. Senate Republicans have 'disengaged' on the current version according to The Economist this may lead to Cap-and-Trade II. "Exotic Mortgages" Coming Due 9/11/2009 The effects of the real estate collapse may not be over, despite encouraging signs in the resale market. Krugman Blames The Economists 9/9/2009 Evidence that the recovery will be slow coming as the current 'conventional wisdom' may be the same as it was in 1932. UN Recommends Dumping The Dollar 9/8/2009 With gold hitting $1,000 and oil rising above $70, confidence in the dollar is falling. Other nations are now agreeing with China that the dollar should be replaced with a synthetic currency. China Still Worried About US Printing Money 9/7/2009 The Fed is printing money to buy Treasury bonds. This is alaming to the nation's biggest creditors, including China. Mitch Daniels on State's Plight 9/6/2009 Yesterday, we presented a national view of America's financial situation from David Walker. Today, Gov. Mitch Daniels of Indiana looks at the states. Bankruptcy Judge Voids Municipal Labor Contract 9/4/2009 Vallejo Califonia's contract with the electrical workers union has been voided in the bankruptcy court. With this precedent, will other hard-pressed cities now start considering filing Chapter 9s? Study: Europeans More Innovative Drug Developers 9/3/2009 Drugs make up a large portion of the nation's medical costs. Other nations control prices and, in many cases, are the only purchasers. Does the ability to charge higher prices lead to more and better drug development in the US? FDIC Bailout Coming? 9/2/2009 The residual problems from the banking crisis have yet to be seen according to this opinion. Doomed To Repeat It? 8/31/2009 Wise men and women tell us that past is prologue. The administration recognizes that it's 1937, not 1929, that it should study. Rampant Consumerism A Victim Of The Recession? 8/28/2009 The New York Times reports that Americans may be changing their spending habits. This will certainly have an effect on the recovery which are usually led by consumers. Checking Up On The Banks 8/27/2009 With news the FDIC is running out of money, what is the status of banks "in trouble"? From the The Wall Street Jounal Bailing Sub-Prime Lenders 8/26/2009 A watchdog group concludes that the "Making Home Affordable" money is going to the very lenders who created the real estate crisis. On the other hand, aren't these institutions' customers the people who need the help? Looking Ahead To The Census 8/25/2009 Next year's census promises some good news for the Sunbelt and bad news for the Rustbelt. Social Security Payments: The Uncola 8/24/2009 There will be no Cost of Living Adjustment in Social Security payments for the first time since they became automatic in the inflation-plagued 1970's. Worse, the bureaucrats have figured out how to actually decrease some folks' benefits. Luke-Warm News On The Deficit 8/20/2009 The FY 2009 Deficit won't be as big as was once thought. That means it's bigger than any deficit, by any measure, since World War II. Buffet Worried About Stimulus Spending 8/19/2009 One of the president's biggest supporters worries about the scale of fiscal stimulus saying we are in 'uncharted territory'. Perhaps he should visit this site where we chart the deficit. California Public Pensions "Unsustainable" 8/18/2009 In a remarkably pointed article, San Diego's Union Tribune faces facts over California's state pension costs. They are unsustainable and the current systems "has to die". Look for others to follow The Golden State's lead as fiscal reality hits. What's A Proper U.S. Balance Sheet? 8/17/2009 The federal take-over of Fannie Mae and Freddie Mac exposes taxpayers to foreseeable losses. These "assets" should appear on the federal balance sheet---along with their liabilities. Here's a Wall Street Journal article on the subject. Whole Foods CEO's Suggestion 8/17/2009 Here's health care advice from a "progressive" CEO of Whole Foods Markets who seems to have a much less intrusive idea for improving access to health care. IFTA in the News 8/16/2009 Here are three recent stories featuring Sheila Weinberg and The IFTA. These stories show the people are beginning to understand the scale of Illinois' fiscal challenges--even if their leaders choose to ignore them. Unintended Consequences 8/15/2009 The government's announcement that it will produce a 230 MPG vehicle at its GM investment is good news. But, what are the consequences and will it actually reduce total emissions? Troubled Banks Still A Concern 8/14/2009 Bloomberg has an excellent overview on conditions in some 150 banks that are not "too big to fail". The trouble is almost exclusively due to soured real estate loans and credit card losses. Is Ginnie Mae The Next Problem? 8/12/2009 History shows that finanacial institutions with quickly growing assets often find themselves in trouble. Ginnie Mae has quadrupled its assets in less than three years. Is this growth a warning sign? Market Test For Treasury Securities 8/11/2009 Many wonder what will happen if the U.S.'s creditors stop buying our debt. The Financial Times reports an important test of buyers' sentiment occurs this week as the Treasury plans a $75 Billion auction. Martin Feldstein On Foreclosures 8/8/2009 With all the hulabaloo over the health care meetings, we need to remember the real estate crisis has far larger implications, immediately. The Harvard professor suggests a full recourse mortgage as solution to the real estate problem. Clunkers Traded For Fuelish Trucks? 8/7/2009 Here's another example of why truthful accounting--accurate and timely--is important when making policy. Congress added $2 billion to the Clunkers program yesterday. But are the subsidized buyers buying fuel-efficient cars? Apparently not so much. IFTA Volunteer Appears in 'The Illinois Review' 8/5/2009 Nancy R. Mathieson, a new volunteer at the Institute, makes an important point about the original errors in estimating Medicare's costs. They underestimated by a factor of 10. That's an important lesson as we consider health care 'reform'. Federalizing State Deficits? 8/4/2009 The New York Times recommends the federal government become involved in curing state budget shortfalls. The Institute's 50 State study revealed state "balanced budgets" are a myth. Fix the accounting first and fiscal problems will diminish. Nettlesome Problem for the Pay Czar 8/2/2009 Bailed-out Citigroup owes one of its associates a $100 million bonus earned under contract for his role in last year's oil bubble. Will the "pay czar" allow the oil trader to get his gold? Health Care Seen As Others See Us 8/1/2009 A dispassionate view comes from The Economist, reporting on the dynamics of the health care debate. The polls quoted in the article show that the public sees the issue quite differently than the Congress and the President. America's "Lost Decade"? 7/31/2009 Irwin Stelzer has some thoughts on the possibility America will suffer a 'Lost Decade' like the Japanese economy did after its credit crisis. Arizona Capitol Building For Sale? 7/30/2009 Arizona is in such dire fiscal condition that it's considering selling its capitol building. One commentor on this story calls the plan 'payday loans for government'! The IFTA's 50 state study found bad accounting to be a big reason for such troubles. Dollar's Troubles Have Consequences 7/29/2009 As other countries' stimulus plans succeed, they have less use for the "safety" of the dollar, according to Bloomberg. As its price falls, other economies want a say in international finance which is dollar-denominated Two related stories, today. Mark-to-Market...Again 7/28/2009 Brian Wesbury and Robert Stein make a powerful case to suspend the "Mark-to-Market" accounting principle, completely. Many believe this policy was a primary contributor to the financial meltdown. Ben Bernanke On The Barnstorming Trail 7/27/2009 The Fed Chairman is usually a mysterious, silent oracle but Bernanke is out developing public confidence by explaining the bank's role. Private sector executives build confidence with audits, not interviews. Bernanke should order an audit, too. Truthful Numbers 7/25/2009 The Chicago Tribune's Dennis Byrne quotes the Institute's research in a recent editorial. He concludes the debt Baby Boomers are leaving makes them the 'worst generation'. GAO Reports on Mississippi Stimulus Spending 7/24/2009 Here is how the GAO reported on spending in Mississippi