by | ARTICLES, ECONOMY, OBAMA, POLITICS, TAXES
Do you know who is on the hook for many student loans? You, the taxpayer.
From CNS News:
“Since President Barack Obama took office in January 2009, the cumulative outstanding balance on federal direct student loans has jumped 517.4 percent.
The balance owed as of the end of May was $739,641,000,000.00. That is an increase of $619,838,000,000.00 from the balance that was owed as of the end of January 2009, when it was $119,803,000,000.00, according to the Monthly Treasury Statement”
The largest reason for this is Obama’s “Pay As You Earn” (PAYE) program implemented in 2010.
There are several portions of PAYE that are particularly concerning:
1) PAYE repayment is based on 10% of discretionary income;
2) If the payment doesn’t cover the accruing interest, the government pays your unpaid accruing interested for up to three years from when you begin paying back your loan under the PAYE program.
3) The balance of your loan can be forgiven after 20 years if you meet certain criteria
4) Your loan can be forgiven after 10 years if you go to work for a public service organization
Think the debt balloon is bad now? The program will be severely unsustainable once loans start to be repaid — with interest often being covered by the federal government– and later, loan forgiveness options kick in, with the balance paid by the federal government.
And the federal government is…YOU.
More on how the PAYE program hurts the economy:
by | ARTICLES, GOVERNMENT, OBAMA, OBAMACARE
Did a failed medical scheduling project at the VA contribute to the development of “secret waiting lists”?
At least one attempt to implement a scheduling system at the VA never got off the ground after nearly a decade of trying.
Apparently a medical scheduling project for the VA was begun in 2000 and was discontinued in 2009, 9 years after it the project began — and it remained utterly unfinished. Nothing seems to have been done for another 3 years until 2012, when the Secretary of Veteran’s Affairs launched a contest to create an app for scheduling — a contest which didn’t close until the summer of 2013. Was it during this interim time between scheduling systems that the practice of “secret lists” began as a coverup/bandaid for the problem?
According to a press release in 2013 announcing the winners in the “scheduling app” contest, it was noted that the “VA started to develop a Medical Scheduling Package replacement in 2000. This effort was not successful. When VA ended the project in 2009, none of the planned capabilities were delivered. It had cost more than $127 million”.
So, was used at the VA between the end of the Medical Scheduling Package project in 2009 and the Medical Scheduling App Contest of 2012/2013?
We now know there were secret waiting lists as some of the facilities. It also appears the the Obama Administration knew about the “secret waiting lists” as early as 2010. The Daily Caller reports that there was an internal VA investigation in 2010 regarding “paper” waiting lists:
“We conducted this review to determine the validity of an allegation that senior officials in Veterans Integrated Service Network 20 (VISN) instructed employees at the Portland VA Medical Center to use unauthorized wait lists to hide access and scheduling problems,” according to an August 17, 2010 VA Office of Inspector General (OIG) report entitled “Review of Alleged Use of Unauthorized Wait Lists at the Portland VA Medical Center”
Underfunding the Department of Veterans Affairs is not the problem. From 2007 to 2012, enrollment in VA services has increased by 13% from 2007 to 2012. At the same time, the VA budget went from $82 million to $125 million — a 53% increase, and the biggest jump in the VA’s budget history since records go back to 1940. The failed Medical Scheduling Package project alone cost $127 million dollars.
$127 million is a lot of taxpayer monies that could have been used on veterans’ treatments. Yet even with a generous budget, the VA could not deliver quality services to our Veterans.
by | ARTICLES, GOVERNMENT, HYPOCRISY, OBAMA, TAXES
From Committee on Ways and Means Chairman, Dave Camp:
“Due to a supposed computer crash, the agency only has Lerner emails to and from other IRS employees during this time frame. The IRS claims it cannot produce emails written only to or from Lerner and outside agencies or groups, such as the White House, Treasury, Department of Justice, FEC, or Democrat offices”.
This revelation comes a year after the IRS scandal broke. Commissioner Koskinen stated that he would turn over all documents pertaining to Lois Lerner. The time frame of the lost documents cover January 2009 – April 2011, a critical time relating to the scandal.
But wait. National Review Online reported just a few days ago that in October 2010, (squarely during the time frame of the lost emails),
“[the IRS] sent a database on 501(c)(4) social-welfare groups containing confidential taxpayer information to the Federal Bureau of Investigation, according to documents obtained by a House panel. The information was transmitted in advance of former IRS official Lois Lerner’s meeting the same month with Justice Department officials about the possibility of using campaign-finance laws to prosecute certain nonprofit groups. E-mails between Lerner and Richard Pilger, the director of the Justice Department’s election-crimes branch, obtained through a subpoena to Attorney General Eric Holder, show Lerner asking about the format in which the FBI preferred the data to be sent”.
.
Emails. Between Lerner and an outside agency. In 2010.
Additionally, last month, Katie Pavlich reported that, “According to new IRS emails obtained through a Freedom of Information Act request from Judicial Watch, former head of tax exempt groups at the IRS Lois Lerner was in contact with the Department of Justice in May 2013 about whether tax exempt groups could be criminally prosecuted for “lying” about political activity”.
So we know Lerner communicated with an outside agency in 2013. Here’s another one in 2012:
It also came to light in April that “House Oversight Committee show staff working for Democratic Ranking Member Elijah Cummings communicated with the IRS multiple times between 2012 and 2013 about voter fraud prevention group True the Vote. True the Vote was targeted by the IRS after applying for tax exempt status more than two years ago. Further, information shows the IRS and Cummings’ staff asked for nearly identical information from True the Vote President Catherine Engelbrecht about her organization, indicating coordination and improper sharing of confidential taxpayer information”.
But we don’t know anything about 2009 – 2011. Except at some point, emails did exist. WHOOPS!
Flashback: Remember the TIGTA report? You can read the entire Treasury Inspector General for Tax Administration, (TIGTA) timeline report here. Incredibly, this report, released in May 2013, names “email” as the source for much of their timeline documenting events in 2010 and 2011, but possibly now, those emails are “lost”. 16 out of the 26 non-redacted events in that timeline refer to “email” as the source. Take a look. And, what was redacted? We don’t know.
Again, the IRS claims it only “has Lerner emails to and from other IRS employees during this time frame…it cannot produce emails written only to or from Lerner and outside agencies or groups, such as the White House, Treasury, Department of Justice, FEC, or Democrat offices.” The ability for an inbox to lose certain emails during the time frame — but not others — is incredible.
David Camp hits the nail on the head when he notes that, “because of this loss of documents, we are conveniently left to believe that Lois Lerner acted alone”.
See how it works? Since the IRS cannot produce any hardcopy evidence of corroboration, the Obama Administration and its agencies are conveniently spared.
by | ARTICLES, FREEDOM, OBAMA, QUICKLY NOTED, TAXES
From National Review Online:
“The Internal Revenue Service may have been caught violating federal tax law: In October 2010, the agency sent a database on 501(c)(4) social-welfare groups containing confidential taxpayer information to the Federal Bureau of Investigation, according to documents obtained by a House panel.
The information was transmitted in advance of former IRS official Lois Lerner’s meeting the same month with Justice Department officials about the possibility of using campaign-finance laws to prosecute certain nonprofit groups. E-mails between Lerner and Richard Pilger, the director of the Justice Department’s election-crimes branch, obtained through a subpoena to Attorney General Eric Holder, show Lerner asking about the format in which the FBI preferred the data to be sent”.
More evidence that the 2013 IRS scandal targeting 501c4s is worse than we thought. Read the whole article here:
by | ARTICLES, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, POLITICS, TAXES
Obama issued an Executive Order today that brought extra relief to some student loan borrowers. A 2010 law allowed for repayment caps at 10% of a borrower’s income, though some loan holders were ineligible. This Executive Order expanded those who could qualify for the income repayment plan.
From the NYT: “Mr. Obama’s main action will be to expand on a 2010 law that capped borrowers’ repayments at 10 percent of their monthly income. The intent is to extend such relief to an estimated five million people with older loans who are currently ineligible — those who got loans before October 2007 or stopped borrowing by October 2011. But the relief would not be available until December 2015, officials said, given the time needed for the Education Department to propose and put new regulations into effect”.
Though this Executive Order — and its 2010 law counterpart — may sound well and good, financially it is a disaster. The 10% income repayment does not help any young person get off on a solid financial footing. Likewise, because some sectors allow for loan forgiveness after a period of time, that amount gets written off by the federal government, thereby substantially adding to the federal debt.
For example, if someone borrows $30,000 a year for 4 years for a degree, that is $120,000 of student loan debt. The debt carries an interest rate of at least 6%. The Obama repayment plans offer an option that allows borrowers to pay 10% (it used to be 15%) of what they earn, and if not fully paid back by the end of ten years, any balance is forgiven.. So for instance, if a new graduate lands a job that pays a generous $50,000/year, he/she would pay back $5,000/year. With interest of at least $7,200 ($120,000 x 6%) which likely does not even cover the interest on the original $120,000 loan.
There is almost no way a borrower can begin to pay back anything on their loan, and by the time they actually can make a dent, the additional interest accrued would have ballooned the total loan amount to at least $150,000. This is financially crippling for a young person.
The costs for the 10% repayment program since its implementation have ballooned from $1.7 billion in 2010 to $3.5 billion in 2013 to an estimated $7.6 billion for 2014.
This Executive Order seems to be a precursor to a bill being pushed by Senator Elizabeth Warren, which Obama has said to endorse. It “would allow borrowers to potentially save thousands of dollars by giving them a chance to effectively pay off their high-rate existing loans in exchange for new loans that carry substantially lower interest rates”.
How would this program be paid for? A new tax or increased taxes on the wealthy, of course.
The real impact of this higher education reform is that the government is now encouraging people to borrow substantially for their education, while simultaneously providing an avenue for students to avoid paying back much of their funds — leaving the taxpayer on the hook, a deficit in freefall, a tax increase for targeted high income earners, and an economy in stagnation.
by | ARTICLES, BLOG, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, TAXES
From the Bureau of Labor Statistics (BLS):
Total nonfarm payroll employment rose by 217,000 in May, and the unemployment rate was unchanged at 6.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, health care and social assistance, food services and drinking places, and transportation and warehousing.
Household Survey Data
The unemployment rate held at 6.3 percent in May, following a decline of 0.4 percentage point in April. The number of unemployed persons was unchanged in May at 9.8 million. Over the year, the unemployment rate and the number of unemployed persons declined by 1.2 percentage points and 1.9 million, respectively.
Among the major worker groups, the unemployment rates for adult men (5.9 percent), adult women (5.7 percent), teenagers (19.2 percent), whites (5.4 percent), blacks (11.5 percent), and Hispanics (7.7 percent) showed little or no change in May. The jobless rate for Asians was 5.3 percent (not seasonally adjusted), little changed from a year earlier.
Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 218,000 in May. The number of unemployed reentrants increased by 237,000 over the month, partially offsetting a large decrease in April. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their current job search.)
The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 3.4 million in May. These individuals accounted for 34.6 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 979,000.
The civilian labor force participation rate was unchanged in May, at 62.8 percent. The participation rate has shown no clear trend since this past October but is down by 0.6 percentage point over the year. The employment-population ratio, at 58.9 percent, was also unchanged in May and has changed little over the year.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 7.3 million, changed little in May. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
In May, 2.1 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, there were 697,000 discouraged workers in May, little different from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force in May had not searched for work for reasons such as school attendance or family responsibilities.
by | ARTICLES, BUSINESS, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, TAXES
This is a tad worrisome:
Nonfarm business sector labor productivity decreased at a 3.2 percent annual rate during the first quarter of 2014, the U.S. Bureau of Labor Statistics reported today, as hours increased 2.2 percent and output decreased 1.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decrease in productivity was the largest since the first quarter of 2008 (-3.9 percent).
And this:
In the first quarter of 2014, nonfarm business productivity fell 3.2 percent, a greater decline than was reported in the preliminary estimate. The revised figure reflects a 1.4 percentage point downward revision to output and a 0.2 percentage point upward revision to hours.
You can read the whole report here
No one else seems to be reporting on the revised numbers, which mirror that of the 1st quarter of 2008 (-3.9).
Couple this with the report last week that the “economy in the U.S. contracted for the first time in three years from January through March as companies added to inventories at a slower pace and curtailed investment”.
It will be interesting to see what the unemployment numbers show on Friday.
Friday update: Unemployment stays flat
by | ARTICLES, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, POLITICS, TAXES
Diana Furchtgott-Roth wrote an article this past week outlining the economic impact of Obama’s newest regulations. Obama has decided through Executive Order to institute environmental regulations similar to those in the failed “cap-and-trade” legislation from a few years ago. But Obama will now go a step further than just the regulation of power plants; regulations will include regional emissions.
Regulation is stifling. It creates more barriers for American businesses which drives up costs for consumers. Businesses which are abroad are not subject to such regulation, which means they will often be able to charge less for products than American ones. With the economy at such a sluggish pace right now, of course consumers will purchase the lowest price. With higher costs to run the business, as well as drop in demand for product, employees will face the risk of losing jobs as a cost-saving measure for their employer.
Some lawmakers are waking up to the economic impact over-regulation has on our industries. Several legislators introduced a bipartisan in 2011 aiming to reduce regulatory burdens in particular agricultural endeavors. According to records, “this legislation passed the U.S. House of Representatives on March 31, 2011 as H.R. 872, The Reducing Regulatory Burdens Act of 2011. Additionally, it advanced out of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, but the full Senate failed to consider it during the last Congress”. It is now known as H.R.935, “The Reducing Regulatory Burdens Act of 2013”. Yesterday, on June 2, it was placed on the Union Calendar, which means it has not been defeated in Committee. Such legislation is a starting point for raising awareness of the destructive nature of burdensome regulation.
Back to Obama’s new Executive Order environmental rules. Furchtgott-Roth summed up her article nicely when she wrote,”For those concerned about economic growth, poverty, and inequality, cap-and-trade makes no sense, either nationally or regionally. Our air is getting cleaner, and will continue to do so for the foreseeable future as new capital replaces old. Cap-and-trade did not pass a Democratic Congress in 2010, and Mr. Obama should not impose it on a regional basis through regulation”.
by | ARTICLES, FREEDOM, GOVERNMENT, HYPOCRISY, OBAMA, OBAMACARE
Paul Krugman did it in 2011. Nicholas Kristof did in 2009. So did Ezra Klein. And Barack Obama did it in 2008. What did they do? They all praised the VA system as a model for health care.
Krugman: “Yes, this is ‘socialized medicine’…But it works, and suggests what it will take to solve the troubles of US health care more broadly.”
Kristof: It is fully government run, much more “socialized medicine” than is Canadian health care with its private doctors and hospitals. And the system for veterans is by all accounts one of the best-performing and most cost-effective elements in the American medical establishment.
Klein: the “VA is actually socialized medicine, where the government owns the hospitals and employs the doctors. If you ordered America’s different health systems worst-functioning to best, it would look like this: individual insurance market, employer-based insurance market, Medicare, Veterans Health Administration”
Obama: Make the VA a leader of national health care reform so that veterans get the best care possible.
We all now know how laughable these statements are. At least they did get one thing right: The VA is a model for healthcare — government-run health care.
Money is not the problem. From 2007 to 2012, enrollment in VA services has increased by 13% from 2007 to 2012. At the same time, the VA budget went from $82 million to $125 million — a 53% increase, and the biggest jump in budget history since records go back from 1940. Yet the VA could not deliver quality services to our Veterans.
We see the same scenario with the other major government -run health program: Medicare. It is currently insolvent; Medicare spends roughly 3 times what it takes in and it is only getting worse. There are no cost controls. Even Obama acknowledged this in 2010 when he said, “The major drivers of our long-term liabilities as everyone knows are Medicare and Medicaid, and health care spending.”
Government should not be handling our health systems. The fact that secret waiting lists existed shows just how far the government went to hide their incompetency in running a health system at the very time that Obamacare was being debated both in Congress and then in the public square. If Congress and Americans had known the truth of the condition of the VA health system, it is likely that Obamacare would never have been allowed to become law.
by | ARTICLES
“A citizen can hardly distinguish between a tax and a fine, except that the fine is generally much lighter.” – G.K. Chesterton 5/25/31
Happy Birthday, Sir!
