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Maryland Gov. Martin O’Malley signed into law a package of tax increases Tuesday targeting six-figure earners, tobacco users and companies engaged in real estate transactions to cover record spending on education. In a two-hour ceremony, it was easily the most recognizable measure O’Malley (D) signed but hardly the most popular. Rather, union members, minorities and interest groups crowded the State House to celebrate more than 200 lesser-known and often narrowly tailored bills. They passed the General Assembly with little fanfare but, taken together, will color the state’s social and political identity a slightly deeper shade of blue. The bills included...

Borrowing Your Way Out Of Debt And Other Normal Abnormalities By Bill Bonner 02/20/12 Buenos Aires, Argentina – Dow up 45 points on Friday. The 10-year T-note right on the 2% yield mark. Almost all the news is good. It looks like recovery is finally here. Or, are we just getting used to a punky economy…where even a little improvement looks like a boom? As far as we know, the US economy is still in a Great Correction…with plenty more correction ahead. But people get used to correction…and used to the feds pumping in cash and credit to keep things...

The U.S. Senate, in an unusual procedure, cleared the way Thursday for the U.S. to lift its borrowing authority by $500 billion to $15.19 trillion, enough to keep the support federal government borrowing through late January or early February. The action came under an unusual legislative procedure spelled out under the August agreement to raise the U.S. debt ceiling and avoid a U.S. credit default. In a 52-45 vote, the Senate blocked an attempt by Republicans to slow down the process that will result in the $500 billion debt-ceiling increase. The increase stems from a deal between Congress and the...

If you've been watching the news today, you know the stock markets are plunging. The markets have only been open about four hours, but the DOW has already plunged over 300 points, update, make that over 600 points.. Everyone knows this is because Standard and Poor downgraded the credit rating of the USA from AAA to AA+. Add in the fact that they downgraded the credit of institutions such as Freddie Mac and Fannie Mae for being too reliant on government (shocker!), are mulling downgrades of Britain and France, and said they might downgrade the USA again in a few...

The White House is pushing back against the growing narrative that Obama is "sitting on the sidelines," as reported by the New York Times yesterday, and letting Congress do all the work. As John Boehner spent the night trying to wrestle members into place to support his debt ceiling deal, Valerie Jarret reminded reporters yesterday that it was President Obama who was losing sleep over the issue. "He's getting absolutely no sleep. He's working tirelessly, meeting with his economic team, doing a lot of outreach, exploring all kinds of possibilities for compromise," Jarrett said. Chief of Staff William Daley...

  Amy Winehouse Economics David C. Stolinsky July 28, 2011 Amy Winehouse’s mother Janis stated that she believed it was “only a matter of time” before her daughter died.− News item Let me apologize in advance for using the name of a recently deceased young woman as a descriptor of our economic problems. But I mean no disrespect for Amy Winehouse. On the contrary, my disrespect is aimed at those responsible for wrecking our economic system to the point that the only options remaining are rehab or premature death. Beautiful, talented, wealthy Amy Winehouse was found dead at age...

But sometimes there's less than meets the eye. Generally, banks that repaid CPP funds did so with cash raised from earnings, or by raising new outside capital. In finance and banking you always have to read the fine print. And if you go back to the report, you'll notice that the fine print accompanying the entries for each of the above exits makes reference either to Footnote 49 or Footnote 50. Footnote 49 reads: "Repayment pursuant to Title VII, Section 7001(g) of the American Recovery and Reinvestment Act of 2009 using proceeds received in connection with the institution's participation in...

Ron Paul's recent idea on how to ease the national debt is hardly original but none the less worthy of consideration. He has proposed what leftist critics of the status quo monetary system have been proposing for decades: that money printing should be used to fund the government. To give Ron due credit, he is not proposing exactly that. More precisely, he is proposing that the Fed should tear up a bundle of its Treasury securities, which would lower our overall debt total bringing us below the current debt ceiling. Still, the mechanics are identical, if not in reverse order....

Half way into a third year of economic recession during his term, President Obama offered his advice to families suffering from the effects of high unemployment and home mortgage defaults. “First, don’t spend all your money,” Obama said. “As hard up as you may be, your finances can’t be in as bad a shape as the government’s. Chances are the government is going to need more of your money. What you’ve saved could be crucial to keeping government up and running.” “Second, there’s a difference between saving and investing,” the President went on. “Saving just means you haven’t spent the...

About a year ago Zero Hedge posted an article titled: "Record Number Of Americans Using Retirement Funds As Source Of Immediate Cash" after a report by Fidelity uncovered that "plan participants with loans outstanding against their 401(k) accounts had reached 22 percent versus 20 percent a year earlier." It is now time to revisit this very important topic because if recent press reports are true, last year's record number has just increased by another 50%. "On "The Early Show" Thursday, financial journalist and Newsweek columnist Joanne Lipman said, "Right now we have 30 percent of people who have 401(k)s have...

Yesterday, Tuesday, Treasury Secretary Timothy Geithner gave a speech in New York on the debt default crisis, which tried to shift blame for the nation's finances away from the Administration (reported by USA Today: "If Republicans try to impose that plan on this country as a condition for raising the debt limit, then they will own the responsibility for the first default in our history, with devastating damage to the nation." Talk about chutzpah! First, as Treasury Secretary, Geithner is the Administration official most responsible for monitoring the spending as well as the revenue-raising of the federal government. It is...

Reuters reports that the US Treasury has informed lawmakers it needs a $2 trillion debt limit increase to operate... until the end of 2012. Better stated, this is 112% of US GDP (which will soon be declining). This is precisely as Zero Hedge speculated. We hope PIMCO will be swayed soon enough to buy all this extra debt about to start coming down Geithner's conveyor chute. But yes, the Fed will most certainly not be needed to monetize this extra debt: Japan, Europe and Libya have it covered. That said, we don't know if Libyan rebels will have the capacity...

I believe Boehner gave up too much. A TV pundit said that the Dems and Repubs "split the difference." Nonsense. In a former occupation, I designed and taught a business negotiating skills class for the management training company I worked for then, and later wrote and sold a better class as an independent. Back then, in a Neanderthalish zero sum game, if I "drop anchor" at 100, and you drop at zero, and the final agreement is 38.5, we obviously didn't "split the difference." I lost. Particularly considering that, as you know, the federal debt jumped $54B while they were...

When does borrowing not create debt? Only in two instances: when one has no intention of paying it back, and when Barack Obama does it. Jake Tapper asked new White House press secretary Jay Carney exactly how borrowing over six hundred billion dollars in the best year of Obama’s ten-year budget projections (using the rosiest of all possible economic assumptions) somehow qualifies as (a) balanced spending and (b) not adding to the national debt. Carney explains how that works: TAPPER: If I borrow money from you — to pay — to pay off the interest for - CARNEY: You may...

Budget shortfalls and subsequent muni bond defaults "could derail the recovery, cost a million public employees their jobs and require another big bailout package that no one in Washington wants to talk about," ... Gov. Christie does an excellent job of framing this discussion by pointing out the huge disconnect between the benefits of public sector employees vs. their private-sector counterparts. "I think the general public thinks, 'I can't believe anybody gets a pension anymore. I've got a 401(k). It got killed in the stock market. I don't know what I'm gonna do for my retirement. I can't believe people...

Unemployment Insurance: State Trust Fund LoansUpdated Dec. 15, 2010 The Federal Unemployment Account (FUA) provides for a loan fund for state unemployment programs to ensure a continued flow of benefits during times of economic downturn.  According to the U.S. Department of Labor, Employment and Training Administration, 30 states and the U.S. Virgin Islands are currently borrowing to cover unemployment benefits.  Four states, Maryland, New Hampshire, South Dakota, and Tennessee, have repaid their loans in full.     As of December 13, 2010, the most recent balances of outstanding state loans from the FUA are: State Loan Balanceas of Dec. 13, 2010 Began Borrowing Alabama $283,001,164.19 September, 2009 Arizona $212,184,077.48...

$10.2 trillion: The amount of money advanced-nation governments will need to borrow in 2011 As the debts of advanced countries rise to levels not seen since the aftermath of World War II, it’s hard to know how much is too much. But it’s easy to see that the risk of serious financial trouble is growing. Next year, fifteen major developed-country governments, including the U.S., Japan, the U.K., Spain and Greece, will have to raise some $10.2 trillion to repay maturing bonds and finance their budget deficits, according to estimates from the International Monetary Fund. That’s up 7% from this year,...

A bond is a contract to repay borrowed money within a specified term and with fixed-interval interest payments. Build America Bonds (BABs) were created under the American Recovery and Reinvestment Act, signed into law by President Obama in February 2009, with the intention of providing a low cost means of borrowing for state, municipality and county agencies. Build America Bonds are taxable fixed-income securities that help these agencies finance capital expenditures through subsidized borrowing. (snip ) The Pros • 35% subsidy/tax credit • Interest rates comparable to corporate bonds - this means the bonds are typically high-yielding • Allow municipalities...

Frustrated by the reluctance of consumers to open their wallets and spend the country back into prosperity, the Federal Reserve Bank is said to be considering imposing “negative interest rates.” Under this concept, savings depositors would be charged interest while borrowers would be paid interest. Federal Reserve Chairman Ben Bernanke explained, “We’re at our wits end on this recession thing. Despite our attempts to float the economy on a wave of newly created money too many people are simply hoarding their cash. Granted, people are fearful of losing their jobs and want to preserve cash to pay for necessities in...

For the past year, Gov. Arnold Schwarzenegger has warned that CalPERS was heading over a cliff and pawning off its financial problems on future generations. Now he wants to borrow $2 billion from the California Public Employees' Retirement System to help fix this year's state budget. The governor's plan represents an apparent about-face – and raises questions about the long-term costs. The last time the state borrowed from CalPERS, it had to pay the pension fund $400 million in interest. More borrowing would surely bring more interest expense, experts said Friday. CalPERS is obliged to "treat the loan as they...

<p>Right now, one of the core questions perplexing markets is how U.S. treasury rates on long term debt can remain so low, even though the U.S. government continues to add more and more debt to the supply.</p> <p>The simple answer is that right now, the demand for that debt continues to outpace supply, reducing interest rates.</p>

More Deflation: Consumer Credit Drops Sharply In May Joe Weisenthal Jul. 8, 2010, 3:31 PM The Federal Reserve said Thursday that borrowing dropped by $9.1 billion in May. It also said borrowing declined by $14.9 billion in April, revising an initial estimate that showed a gain of $995 million for the month. In May, consumers borrowed less on their credit cards and took out fewer auto loans. Credit card borrowing has fallen for 20 straight months.Consumer borrowing has fallen in 15 of the past 16 months as households have struggled with uncertain job prospects and battered finances following a deep...

Nearly Bankrupt Illinois Forced To Pay Through The Nose To Borrow Money Joe Weisenthal Jun. 18, 2010, 9:02 AM Image: myonlinemaps.com The market has lost confidence in Illinois, a state which has now adopted its own IOU system. Bloomberg: Illinois sold $300 million of Build America Bonds at a yield premium over Treasuries about 40 percent higher than two months ago after lawmakers failed to close a $13 billion budget deficit for the year starting July 1. The fifth most-populous U.S. state sold the taxable debt maturing in 2035 priced to yield 7.1 percent yesterday, or 297 basis points over...

Voters fed up with spendthrift Obama May 14, 2010 STEVE HUNTLEY shuntley.cst@gmail.com Passage of the massive health-care overhaul was supposed to repair the sagging political fortunes of President Obama, Congress and the Democrats. It didn't. That's not just because of the unpopularity of ObamaCare, though certainly it's a factor. No, there's something more fundamental at work. In 2008, America awoke from a binge of profligate borrowing, notably in housing, with a pounding economic hangover that brought the country to the brink of depression. The lesson was clear: We have to live within our means. This is a lesson that Washington...

We have just survived the worst debt-fueled binge since the Roaring '20s. Now two professors at Yale University are suggesting we introduce leverage into a new realm of our lives — our retirement portfolios. TIME's Barbara Kiviat asked economists Ian Ayres and Barry Nalebuff to explain themselves and the strategy they lay out in their new book Lifecycle Investing. You are advocating that people in their 20s and early 30s take all their retirement savings and buy stocks on margin. Can you explain why that's not as crazy as it sounds? Ayres: It's not as crazy as it sounds because...

Link to the Bloomberg article

WASHINGTON – The Treasury Department says it expects to borrow $392 billion in the current quarter to finance the largest annual budget deficit in history. The projection is $86 billion lower than an estimate the department issued in November, when it expected to borrow $478 billion. The improvement is largely due to higher-than-expected repayments of about $90 billion in bailout funds by large banks. The department also says it borrowed $260 billion in last year's fourth quarter, below an earlier estimate of $276 billion. Treasury expects to borrow $268 billion in the second quarter of this year. The projections come...

Gov. Arnold Schwarzenegger on Thursday defended $11.1 billion in new borrowing as a critical investment in the state's water future while at the same time insisting California must cut its way toward a balanced budget in the short term. In an interview with The Bee's editorial board, the Republican governor also took aim at the state's prison employees and advocated for a constitutional change allowing California to rely more on private workers. After reaching a deal last week with state lawmakers to bolster California's water infrastructure, Schwarzenegger is trying to build popular support for the plan, knowing voters will have...

When the Borrowers Stop Borrowing By Bill Bonner 11/09/09 Beunos Aires, Argentina – The Dow moved up 17 points on Friday, leaving it above the 10,000 mark. Gold rose too – it is at a new record high, only $5 below $1,100.(The DJIA closed today up 203 points) According to the news reports, the US economy is ‘growing’ again. Yes, that’s the official storyline. But wait, what kind of growth is this? David Rosenberg: “All we can say is that if the overwhelming consensus is correct that the recession is behind us, then what we have on our hands is...

We are likely to have a double-dip recession, and this is why. Your Uncle Sam has been having a hard time because he spends more than he makes. He engages in much unproductive behavior and wastes a lot of money on things that he doesn't really need. He is easily influenced by his irresponsible children, Nancy and Harry, whose mantra is: "Spend, Sam, spend." Sam is also sloppy with his finances. His record keeping is poor, and he is frequently ripped off by people who claim to be his friends. Recently, Sam experienced a big drop in his income, because...

Saying that borrowing money without a balanced budget in place "would be irresponsible," Gov. Arnold Schwarzenegger revoked a financial mechanism Thursday that he agreed to last year for seeking emergency loans. In a letter to state Controller John Chiang, the governor said he was rescinding his authorization for a General Cash Revolving Fund, which he had approved in April 2008. The fund is legally necessary to enable the controller to borrow money on the commercial credit market through the issuance of Registered Anticipation Warrants, or RAWs. The warrants usually carry steep interest rates and up-front fees, but would give the...

The Federal Reserve issued the first installment of what it calls its ongoing series of monthly reports that provides new information on its credit and liquidity programs. Most of the June report was dry, but two things stood out. The first was the extent to which the Fed balance sheet is made up of junk, paper that is rated BB+ or lower. The second and more obvious fact was that the agency wrote-down $5.25 billion in the first quarter. Most of the losses came from a re-valuation of securities acquired as part of the restructurings of Bear Stearns and AIG....

We are beginning to learn that $12.8 trillion doesn't last very long when it is being spent by corrupt politicians and idiot bureaucrats. It doesn't seem to matter how much Obama has already spent or committed; he just has to keep spending more and more and more. WASHINGTON – The Treasury Department said Monday it will need to borrow $361 billion in the current April-June quarter, a record amount for that period. It's the third straight quarter the government's borrowing needs have set records for those periods. Treasury also estimated it will need to borrow $515 billion in the July-September...

Reporting from Sacramento -- California may find it hard to borrow the $23.3 billion that Gov. Arnold Schwarzenegger has proposed to ease the state's financial crisis, the Legislature's nonpartisan analyst said Thursday. The spending plan Schwarzenegger outlined Dec. 31 for the next 18 months relies on borrowing $5 billion against future state lottery earnings, $7 billion in new infrastructure bonds and $11.3 billion in short-term borrowing so that the state does not run out of money. Schwarzenegger has depicted his proposal, which he intends to formally submit to the Legislature today, as the only financially responsible solution to a budget...

SACRAMENTO — Gov. Arnold Schwarzenegger's staff Wednesday released his most detailed plan yet to tackle the state's staggering budget deficit, calling for deep cuts to state services, hefty tax increases and a large new round of borrowing to close a projected $41.6 billion shortfall through mid-2010. While little of the proposal was new, it included some striking elements, such as cutting billions of dollars from public school funding and slashing the deduction state taxpayers can claim for their dependents. The plan also arrived a day after the state controller warned tax refunds might have to be paid with IOUs in...

<p>Financing schemes that sidestepped voter approval have put local governments deeper in hock.</p> <p>Oxnard was in a bind, facing a $150-million bill to fix cracking and crumbling streets and no way to pay for the work without cutting other services.</p>

Strapped Churches Can't Pay the Mortgage After Borrowing Binge; St. Andrew at Auction The auctioneer told the small crowd huddled outside the Talbot County Courthouse that the property would be sold "as is" -- rectory, bell tower, oak pews and rose-tinted stained glass windows included. "Who gives $700,000, 700, 700?" he called out. One man, a representative for a local bank, raised his finger. The auctioneer tried in vain to nudge the price up. "Sold!" he cried. St. Andrew Anglican Church had just been bought by the bank that had started foreclosure proceedings against it. "It's probably good for my...

Hedge funds gain access to $200bn Fed aid By Krishna Guha in Washington Published: December 20 2008 05:01 | Last updated: December 20 2008 05:01 Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200bn programme intended to support consumer credit. The Fed said on Friday it would offer low-cost three-year funding to any US company investing in securitised consumer loans under the Term Asset-backed Securities Loan Facility (TALF). This includes hedge funds, which have never been able to borrow from the US central bank before, although the Fed may not...

Runaway borrowing to trigger tax rises By Chris Giles and George Parker Published: November 20 2008 23:45 | Last updated: November 20 2008 23:45 Annual public borrowing is set to rocket towards £120bn over the next two years – far higher than City forecasts – forcing Alistair Darling to announce plans for deferred tax rises and public spending curbs when he presents his pre-Budget report next week. Treasury officials say the “mammoth shock” to the economy will cause tax revenues to fall far below previous government forecasts, even before the chancellor announces what is promised to be a “decisive” temporary...

State transportation officials are poised to issue billions of dollars in debt to help speed road construction, a move that will keep Dallas-area projects on schedule for now but will do little to shore up the state's long-term road-funding crisis. The Texas Department of Transportation will likely begin issuing $1.5 billion in bonds within 60 days, pending the recovery of the nation's upended credit markets, and is taking steps to borrow another $6.4 billion over the next few years. Historic turmoil in the credit markets is already costing the department hundreds of thousands of dollars in extra interest payments each...

No one wants to talk about who is most to blame for the financial crisis that now threatens the U.S. economy, though there is plenty of blame to go around. It is far easier to blame other people -- greedy Wall Street executives, predatory lenders, President Bush, federal regulators, members of Congress --than it is to look at ourselves. For too long, Americans have been living on borrowed money they could never pay back. We've bought houses we couldn't afford and taken out loans on home equity that didn't materialize, assuming housing values would continually move upward. We've paid for...

The Texas Department of Transportation, which has alternated between fiscal gluttony and subsistence the past few years, may be about to belly up to a feast again. A feast paid for with money to be borrowed, mind you. Given the state of credit markets, one hesitates to reach for the salt right away. But absent the financial Armageddon that the president and others have been gabbing about, TxDOT might be sitting on an $8 billion stash this time next year. Even in the zero-laden world of government spending, $8 billion would be a significant infusion into TxDOT's budget. Without that...

It's good to see the state's top three leaders now on the same page – literally – on at least a few ways to attack the problem of under-funded roadway needs. Breakthrough No. 1 – admitting a problem. Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Tom Craddick – never political chums – all put their signatures on a joint statement last week conceding that Texas' "ability to fund needed transportation projects in the future is limited." Breakthrough No. 2 – committing to specific fixes. The most welcome one was a pledge to quit siphoning off road money...

Much has been written about the August budget put forward by Governor Schwarzenegger last week. At his press conference announcing his plan, the Governor said that his budget plan was "a fiscally responsible compromise" and will "put our state on the road to fiscal sanity." In reality, after spending some time looking it over, and discussing it with state policy experts .., the Governor's proposal will do nothing of the sort. It includes more borrowing and higher taxes on Californians... The Governor said that more borrowing in the budget is "not a wise idea and I will not do that."...

...As consumers max out their credit lines and banks clamp down on lending, many older and middle-class Americans are resorting to pricey, often-risky alternatives to stay afloat. Some are depleting their retirement accounts, tapping 401(k)s for both loans and hardship withdrawals. Some new fast-cash options allow homeowners to squeeze equity from their houses -- without the burden of monthly payments. One new product offers a one-time payment. In exchange, the company gets up to 50% of any future change in the property's value, typically collecting its share when the house is sold. Americans are resorting to these more extreme measures...

SACRAMENTO (AP) - Gov. Arnold Schwarzenegger will propose borrowing against future state lottery revenue to help close a $15.2 billion budget deficit in the next fiscal year. Administration officials told The Associated Press that the governor on Wednesday will propose raising $15 billion over the next three years by selling bonds based on anticipated lottery revenues and using about $5.1 billion in the 2008-08 fiscal year to help erase the deficit. The other $10 billion would be left in a rainy day fund the governor wants to create as part of a budget reform proposal to ease the effect of...

There's been a lot of talk about the new Trans-Texas Corridor — the next-generation "super-highway" — and opinions are varying. Now the debate is coming to Lufkin's doorstep. On Monday, the American Land Foundation, Stewards of the Range and TURF will hold a workshop at Lufkin's Pitser Garrison Civic Center on how to stop the Trans-Texas Corridor 69. The event runs from 9 a.m. to 3 p.m. A portion of Texas citizens have voiced their opposition to the TTC-69 in public meetings held by the Texas Department of Transportation, but believing they are not being heard, four cities and their...

Two Democrats have introduced legislation sought by Gov. Arnold Schwarzenegger that could broaden voter support for a twice-delayed, $9.9 billion high-speed-rail bond on the November ballot. A spokeswoman for Schwarzenegger, Sabrina Lockhart, said Thursday that the administration worked with the rail board to draft the Galgiani and Ma bill. The bill by Assemblywomen Cathleen Galgiani of Tracy and Fiona Ma of San Francisco would allow the bonds to be used for all segments of the proposed 700-mile rail system. The bond's current language dedicates the money only for the proposed segment between the Los Angeles and San Francisco areas.Ma and...

Bingeing and Borrowing: Borrowing for budget shortfall would exceed constitutional debt limit Clint Bolick, Goldwater Institute, February 28, 2008, Having spent like a drunken sailor in years of plentiful revenues, the state of Arizona now finds itself with a large and growing budget deficit. Like the mythical siren beckoning sailors to wreck their ships on dangerous shoals, Governor Janet Napolitano soothingly implores the legislature to bridge the fiscal gap by borrowing. Whatever the fiscal implications of mortgaging Arizona’s future, our state constitution is clear. The framers were intent on fiscal responsibility, and crafted two provisions—one aimed at the state, the...

The governor never tires of telling us that he grew up on a farm. Gee, who'da thunk it? Well, me for one. Over the course of these "town meetings" on his multibillion-dollar toll-and- spend scheme, our governor has undergone a personality change. The first few sessions featured docile crowds that were willing to sit back and absorb the wisdom of a Wall Street whiz who spoke with great authority on matters of high finance. But once the crowds wised up, Gov. Jon Corzine started to look like the bumbler he was when he first entered politics eight years ago. The...