Free Republic

Wisconsin paid off its $60 million debt owed to Minnesota under the former tax reciprocity agreement between the states, Gov. Scott Walker announced today. The debt was left unpaid by the previous Wisconsin administration after former Minnesota Gov. Tim Pawlenty ended the agreement in 2009. The agreement had allowed workers living in one state and working in the other to pay income taxes to their home state, saving taxpayers the burden of filing two tax state returns. “It was a huge disappointment for both Minnesota and Wisconsin taxpayers when former Minnesota Gov. Pawlenty ended reciprocity last year,” said Sen. Bob...

The following is adapted from a speech delivered on February 16, 2011, at a Hillsdale College National Leadership Seminar in Phoenix, Arizona. TO BEGIN, consider one of the most important measures of property, the kilogram. It’s a measure of mass or, for non-scientific purposes, weight. According to the papers last week, a global scramble is under way to define this most basic unit after it was discovered that the standard kilogram—a cylinder of platinum and iridium that is maintained by the International Bureau of Weights and Measures—has been losing mass. You may think that this is impossible. Of all the...

The State of Illinois is still paying off billions in bills that it got from schools and social service providers last year. Arizona recently stopped paying for certain organ transplants for people in its Medicaid program. States are releasing prisoners early, more to cut expenses than to reward good behavior. And in Newark, the city laid off 13 percent of its police officers last week. While next year could be even worse, there are bigger, longer-term risks, financial analysts say. Their fear is that even when the economy recovers, the shortfalls will not disappear

Madness of HELOC Lending During the Bubble Years Aided by the seemingly limitless desire of banks to lend money, homeowners opened an incredible number of HELOCs during the bubble years of 2004-2006. Nowhere was the madness of HELOC borrowing more astounding than in California. During the two key years of 2004 and 2005, a total of 1.43 million HELOCs were originated in California just for the purchase of homes according to figures received from CoreLogic. Wait a minute, you say. That's more than the total number of homes sold in California during these years. Correct. A total of 1.25 million...

The dollar's domination of the world's monetary system has tremendous consequences for the U.S. economy and fiscal policy. Yet leading officials and commentators in Washington repeatedly overlook this effect when grappling with economic news. "Deficit fears don't appear to bother the bond market," was the headline on the front page of the Washington Post in June. The article implied that our creditors are naive for accepting low returns on Treasury bonds because America is running the risk of being hit with a debt crisis similar to what happened in Greece, whose government came close to defaulting on its obligations last...

LONDON — The Duchess of York's debts have reached 5 million pounds, or nearly $8 million, and her only option may be the first voluntary bankruptcy of a royal, The Sunday Telegraph of London reported. At least one senior financial adviser to Buckingham Palace recommended the action despite the acute embarrassment it would cause for her ex-husband, Prince Andrew, and Queen Elizabeth, The Telegraph said. The queen is said to be “deeply concerned” by the debts, which are more than twice as large as previously thought, the newspaper said. Even Prime Minister David Cameron has been briefed on the issue...

The $5 trillion rollover Jun 29, 2010 13:30 EDT Banks around the world must refinance more than $5 trillion of debts in the coming three years, a massive rollover that poses threats to financial stability and growth. The need to replace these debts, which are medium and long term, will place pressure on bank profit spreads and in turn may either prompt deleveraging, where banks sell assets that they can no longer economically finance, or simply lead to a bout of credit rationing, where borrowers must pay more to borrow, thus crimping investment and economic growth. For banks in the...

Among debt collectors, Steven Katz is known as a “credit terrorist.” For years, he has run what he calls the Steven Katz School of Bill Collector Education, otherwise known as the “credit terrorist training camp.” Mr. Katz, a 58-year-old accountant in suburban Tucson, spends his free time schooling debtors on the finer points of consumer protection law to help them turn the tables on debt collectors. On occasion, he thumbs his own nose at them too. “How many times can I sue you? Let me count the ways,” he wrote under his pseudonym, Dr. Tax, in a March posting on...

<p>Purple may be the official color of the Service Employees International Union (SEIU), but Andy Stern is leaving the union deep in the red. Last week, he surprised the labor community by announcing his resignation as president of SEIU. Mr. Stern has claimed victories in helping pass health care legislation and getting President Obama elected, but his impact within his own organization shows gaping budget deficits and massive underfunding of pensions.</p>

You may have seen the recent story about the 41-year-old doctor who graduated from medical school in 2003 with student-loan indebtedness of $250,000 that has swelled to more than $555,000. She is now scheduled to pay $990 per month until she is 70. Ouch! This is an extreme example of a widespread problem. Only 40 percent of the $730 billion of outstanding student loans actively are being repaid. This isn't healthy for financial institutions or for many young Americans. It's easy to say those who borrow to pursue their post-secondary education bear the primary responsibility. The first rule of survival...

Whenever a demagogue wants to whip up hysteria about federal budget deficits, he or she invariably begins with an analogy to a household’s budget: “No household can continually spend more than its income, and neither can the federal government”. On the surface that, might appear sensible; dig deeper and it makes no sense at all. A sovereign government bears no obvious resemblance to a household. Let us enumerate some relevant differences. 1. The US federal government is 221 years old, if we date its birth to the adoption of the Constitution. Arguably, that is about as good a date as...

New York Times columnist Paul Krugman played media critic on Friday, asserting that the media have gone from sensible to sensationalistic on the long-term federal budget deficit forecasts. The most notable part came when he insisted that the media’s presentation of a deficit threat is a lot like the threat of Iraqi weapons of mass destruction (and will be just as damaging). Isn't this a little odd in an article titled "Fiscal Scare Tactics"? Or was Krugman being self-referential? And is this a great analogy, since the Iraqi WMD ended up missing, and the trillion-dollar deficits have hardly vanished? Krugman...

Eric Sprott: "Dead Government Walking" Joe WeisenthalNov. 3, 2009, 12:48 PM If you're looking for something to cheer you up, don't read the latest letter from ultra-bear Eric Sprott (via Market Folly). Basically he argues, a US default is coming sooner, rather than later, and that there's just no hope of averting this. The projected US deficit from 2009 to 2019 is now slated to be almost $9 trillion dollars.3 How on earth does anyone expect them to raise this capital? As we stated in a previous article, in order to satisfy US capital requirements, all existing investors would have...

Dannii Minogue has revealed how she was forced to pose nude for Playboy to pay off her crippling debts. The X Factor judge, 38, stripped off for the front page cover shoot in 1995 after the breakdown of her marriage to actor Julian McMahon. She owed more than £150,000 and was too proud to turn to her older sister Kylie for help. 'My parents didn't want me to do it. My dad was saying, "Doing this is forever - you can never, ever change it," she said during an emotional interview with Piers Morgan. 'Kylie knew why I was doing...

Jefferson reports $7 million in debts$5.7 million is legal debt from case By Michelle Krupa Saturday, September 12, 2009 Convicted former U.S. Rep. William Jefferson reported in a bankruptcy court filing Friday that he and his wife have more than $7.1 million in debt, including $5.7 million owed to the law firm that represented him against federal corruption charges. The Jeffersons reported about $2 million in assets, most of it comprised of family homes in New Orleans and Washington, and a parcel of farmland in East Carroll Parish. Still, the couple reported that their monthly household income continues to outpace...

After dinner, when there was little to do, particularly in many of the smaller towns, I would sit on my straw mattresses and read "The Art of War" by Sun Tzu, the great Chinese military strategist of the third and fourth centuries B.C. In sharp contrast to the strategists of the West, who believed in the all-out destruction of the enemy's cities and people, the discreet and thoughtful Sun Tzu urged extensive use of deception, of psychological war and of nonviolent methods of "warfare." "What is of extreme importance in war," he wrote, "is to attack the enemy's strategy." And...

The banks must be forced to disclose their "toxic" assets.... In effect, this function can be executed by the setting up of a "bad bank," as the Swedes did in the early 1990s. The bad bank clears the toxic assets off the books of banking systems by buying them at market prices and forcing write downs by the banks. A good bad bank forces banks to write down their bad assets and cleanse their balance sheets with those made insolvent being recapitalized, nationalized or liquidated by the state. But it is equally possible to use a bad bank to buy...

HARRISBURG -- With a section of a Pittsburgh bridge dropping 8 inches and an Interstate 95 support pillar cracking in Philadelphia, Gov. Ed Rendell is turning up the heat under the Legislature to provide infrastructure repair funds more quickly. Mr. Rendell sent a letter to all 253 legislators yesterday urging quick passage of a $240 million "supplemental debt authorization." His program of borrowing would enable state officials to fast-track repairs on some of the state's 6,000 bridges classified as structurally deficient, along with fixing ailing highways, repairing "state-owned, high-hazard dams" and beginning flood mitigation projects. Also yesterday, Mr. Rendell called...

MOSCOW, Oct 11 (Reuters) - Russian banks could be saddled with millions of dollars in bad loans if a drop in oil prices hits the incomes of middle class Russians who have been gorging on a glut of consumer credit. The spot price of Urals , Russia's export blend, has fallen from a peak of $73.65 per barrel in July to $55.12 on Wednesday, and analysts predict a sizable fallout for Russia. "My two major concerns about the Russian economy are the 2008 election and bad loans," said Tim Ash, analyst at Bear Stearns, referring to the vote to elect...