My Blog Talking About Your Blog

The blog that I found interesting was by Gavin Trevino, “Privatize,To Big of a Risk?” The subject matter was privatizing social security. I found the subject very interesting. I was unaware the proposal for privatizing social security was going into consideration once again. Some facts and figures were given but I would have liked some more information. I enjoyed the pro and con approach taken by the author. He illustrated the arguments from both sides. Overall a good read.

I agree with the author. At first glance privatizing social security seems to be a possible solution. Being able to avoid cuts and tax hikes is always a plus. It sounds promising, being able to take control of your own investments. However, as Trevino points out not all retires are educated about the market. The catastrophe that is social security is unavoidable. Over 40 million post World War II baby boomers will reach the retirement age between the years 2010-2040. (socialsecurity.procon.org) I figure my generation will not be receiving any social security benefits. I know I’m not counting on social security as my retirement plan. There is just too mush investment risk. The first risk is poor investments. The second is the possibility of interest rates being low when an individual is ready to retire. At least with the type of social security in place now there is some protection. Our nation needs a solution to this looming problem

Congress Finally Stepping up to the Plate

On September 6, 2008, the director of Federal Housing Finance Agency (FHFA), announced that the government sponsored enterprises Fannie Mae and Freddie Mac would be placed under conservatorship. Conservatorship is a legal concept in the United States of America, where an entity or organization is subjected to the legal control of an external entity or organization, known as a conservator. That same day U.S. Treasury Secretary Henry Paulson stated that “I attribute the need for today’s action primarily to the inherent conflict and flawed business model embedded in the government sponsored enterprises (GSE) structure, and to the ongoing housing correction.”

            Fast forward almost four years later and the federal government is finally taking a step in the right direction. The House Financial Services Committee voted 52-4 on Tuesday to cap salaries for top executives, stop future bonuses, and to bring the agencies salaries in line with the federal pay scale. These two mortgage giants have foreclosed on millions of homes. They both own or guarantee about half of all mortgages in the United States. Both firms have already received $170 billion in taxpayer bailout money and are requesting $14 billion more. The reason for the bailout, both companies took big loses on risky mortgagees they purchased. It seems unfair to me that the taxpayers are bailing out companies that made bad business decisions.

            These top executives are earning million dollar paychecks and claiming the company needs taxpayer money to stay afloat. This citizen finds that pill very hard to swallow. I think it’s time that these top executives feel the squeeze on their pocket books. It’s all about greed.  Fannie’s CEO Michael J. Williams received $5.6 million last year and Freddie’s CEO Edward Halderman received $5.4 million. While the refinance programs were supposed to help as many as 7 million borrowers it only assisted 1.7 million. Why is the bulk of the money going into the pockets of the executives? Under the recently proposed bill the top executives would only be allowed to earn around $220,000.  It’s hard for me to imagine that these people have really earned those million dollar paychecks. The $220,000 annual salaries seem fitting.  Edward DeMarco, acting director of the Federal Housing Finance Agency, said that the bonuses are being used to keep talented executives with the companies. If these top executives of these too big to fail companies are that talented then they would have never put themselves in such a financial disaster. I understand the need for competitive wages. I also understand the incentive of bonuses. I understand that these executives handle millions of dollars. I’m not opposed to million dollar salaries. What I am opposed to is my hard earned money funding their lavish lifestyles instead of helping my fellow American.

Sources:

Huffington Post
Wikipedia
CNN
Politico

Blogging About a Blog

               The editorial I have chosen to critic is, “Struggling with Mortgage? “Sorry”, says Obama Administration,” by Adrianne Strohmann. I thought her editorial was well written and quite informative. She took the time to research her information and used reputable sources such as MSNBC and the New York Times. The editorial provides a lot of facts and figures and is worth reading. The topic of her editorial is relevant to everyone. The economy’s well being is important to us all. Adrianne herself wrote that we all know someone affected by the mortgage struggle.  Her opinion of disappointment of the Obama administration was made very clear. I agree that HARP was mismanaged just like so may other programs. What I really liked about the editorial is that it encourages the reader to get involved. The author encourages the reader to contact their representative. She even goes as far as to provide a link.

               I agree with the author that the Obama Administration has not lived up to its promises. I feel a more aggressive and time effective plan was needed for the mortgage crises. The regulation of the banks by the administration was awful. The variable interest rates should have never climbed as high as they did. The banks should have been monitored more closely.  Although many were able to stay in their homes so many more homes were foreclosed. Helping 70,000 families is a good start but letting 2.5 million homeowners foreclose is a shame. How is the economy supposed to improve?  On the other hand how does one stop the snowball effect? Is four years long enough for any administration to rectify so may wrongs? Was the public’s expectation too high? I hope Congress listens to the American public. I hope that everyone will not make the same mistakes twice.

Super Committee to Save the Day?

Right now in Congress there is a so-called “super committee” working to create a debt reduction plan. The committee is composed of twelve member’s six Democrats and six Republicans, almost all men. They have until November 23^rd to submit a proposal to reduce the deficit by $1.5 trillion. If the committee fails, as much as $1.2 trillion in across-the-board cuts would initiate and be evenly divided between defense and non-defense spending.

            First of all I have to comment on the committee name. The “super committee”, are we in the fourth grade? I’m guessing Congress is hoping they will live up to the name. I digress. Surprise, surprise the committee is at a deadlock. The Democratic Party submitted a proposal and it was not well received by the GOP. It was a $3 trillion plan designed to cut the federal deficit within a 10 year span. The plan was presented to the committee by Senator Max Baucus, (D- Montana) the Finance Committee chairman. A majority of the six democrats supported the proposal. The plan would cut entitlement programs such as Medicaid and Medicare and would require $1.2 and $1.3 trillion in new tax income. The proposal by the Democrats was at least non partisan and their part of the compromise was cutting entitlement program funds. The Republicans have made their opposition to new taxes very clear.  The GOP responded with a proposal that took enormous cuts out of the entitlement programs, and would generate new revenue through government sales and fees. No new revenue would be generated through taxes. Needless to say negotiations are not going well. The Democratic Party is willing to compromise on entitlement programs but the Republicans are not willing to compromise on revenues.

            The committee has been having private meetings for two months. Without a steady flow of information it has left this observe wondering if the committee will succeed. To make matters worse the two parties’ are bickering.  One GOP aide accused Democrats of leaking details of their offer to the press. The Democrats have denied the accusation. It seems to me that the differences between these two parties are getting the best of them. The deadline is approaching fast and there is no evidence of progress. I for one am skeptical that any proposal will be agreed upon on time. Looks like Congress won’t have any deficit reduction plan to consider.

The Facts of Occupying Wall Street

I looked through a lot of the suggested sites for the editorial I wanted to critique. I first started on the right-winged more conservative list. I was trying to see what the Republicans had to say but I found it to be a difficult read. I realize that I have a more liberal frame of mind. There were plenty of editorials on the thousands of Americans protesting on Wall Street and around the country. The Smirking Chimp had an editorial by Walter Brasch, Occupy Wall Street: Separating Fact from Media.

                The title is what first caught my eye it was exactly what I wanted just facts. I normally don’t follow political events or issues that closely. I lose interest quickly. I was aware that people were protesting Wall Street due to economic hardships but that was about it. I knew no real details or facts. I learned a lot from reading this blog. Mainly how the average American has reached his/her breaking point. The greed of Congress, Wall Street, and the wealthy has reached epic proportions. I was not only educated as to why people were protesting but also how poorly the bailout was handled. I think everyone should read this blog it covers a lot of ground. Brasch backs his opinions with quotes from representatives, journalists and even the vice President Joe Biden saying, “In the minds of the vast majority of the American the-middle class is being screwed”.  This blog is definitely geared for a more democratic audience.  When I was reading a blog from Ann Coulter she called the protesters blood sucking leeches. I was wondering if she had a point. Did these people in fact have a reason? And if so, was it a good one?  After reading Brasch’s blog I strongly agree with him. This is not just a mob of disenfranchised rebels.  These protesters are the middle class Americans feeling the brunt of the economic crises. It is clear they are not looking for just a handout. They are looking for opportunity. There are still not enough jobs and the bailout helped companies that didn’t need the help. What gives? I don’t understand how the government gives millions to a company that already has profits in the millions. This bailout system doesn’t seem justified. It seems that the help and money never reach those who needed it the most.  Walter Brash made his point very clear, yes the protesters are united. Yes their actions are justified. Yes they have one voice.

Taking a Bite out of Spending

In keeping with my last blog, I have found another article about our government and its debt. This article is in our very own Austin American Statesman. It is another example of the government’s appalling overspending.  It is definitely “Time to take a bite out ofwasteful spending” in all areas of our government. We as rational individuals realize that in politics and government money is mismanaged.  Ciaran Griffin points out how ridiculous and sever this mismanagement has become. It all starts with a $16.00 muffin.

                Last month a report was released by the Justice Department’s acting inspector general, Cynthia A. Schnedar. This report was an audit of the excessive overspending that is occurring during government conferences.  What first caught my in this article was the title and the picture of a muffin.  I was intrigued; I thought what’s with the muffin?  As I began to read the author got straight to the point. In the author’s first sentence her point of view was very clear it started with “Our latest outrage”. Allowing the reader know her own feelings of the situation.  It is implied that anyone reading this article is her intended audience and in agreement with her opinion.  I find that it is an opinion that is hard to disagree with. She cited facts and listed some of the overpriced treats attendees were enjoying at these conferences. Along with the $16 muffins there were also $10 cookies and brownies.  Throughout the article she stayed true to her opinion but wasn’t unreasonable. In one of the paragraphs she writes that the conferences were for “worthy topics” like drug enforcement and violence. However, the conferences did not need to be held at such extravagant locations. The Hilton Justice Department, really?

                   The information she obtained were from reputable sources such as the Associated Press and the Justice Department. The article was clear, informative, and to the point. There is no mistaking the author’s opinion. The facts in the article only cemented her opinion and mine. It would be crazy for me to say that I don’t agree with Ciaran Griffin. Or for anyone else who has read the article. She gave me undeniable facts and plenty of examples. The example I found interesting and irritating was the $400 hammers, and the $600 toilets the Pentagon felt was necessary. C’mon now! Look I love indoor plumbing as much as the next girl but, boundaries and common sense need to be exercised. The evidence was overwhelming. I found the read to be informative but also enjoyable.  I enjoyed her comment towards the end that the administration should be embarrassed. Yet again, another reason Americans are cynical about government.  

America in Debt

 

 The article that caught my eye was "Cash-Short, U.S. Weighs Asset Sales", by Edward Wyatt from the New York Times. Just as many American households are looking for other avenues of income so is the American government.  This article covers one of President Obama’s proposals to help raise this country’s revenue and reduce the deficit. The proposal is to sell some of the government’s assets such as land, buildings, and even airwaves. The support for this proposal is bipartisan. This is not a new concept it has been done before with positives outcomes. Although Congress may be in agreement, there are many bureaucratic obstacles and red tape to overcome. In a way I find that a bit ironic.  The process of overcoming these obstacles seems like it would take years. How much money the government can raise is up for debate. What I find interesting and refreshing is that the government is looking to all options to generate revenue.  It is important to every citizen that the American government can pay back its debts.  It seems like the deficit just keeps growing year after year.  The economic bubble has popped and it is time for everyone including the
government to balance the budget.