Category Archives: Debt

May 14, 2012

Shortfall in California’s Budget Swells to $16 Billion

Posted on May 14, 2012 by ifnm| Leave a comment

LOS ANGELES — The state budget shortfall in California has increased dramatically in the last six months, forcing state officials to assemble a series of new spending cuts that are likely to mean further reductions to schools, health care and other social programs already battered by nearly five years of budget retrenchment, state officials announced on Saturday.

Gov. Jerry Brown, disclosing the development in a video posted on YouTube, said that California’s shortfall was now projected to be $16 billion, up from $9.2 billion in January. Mr. Brown said that he would propose a revised budget on Monday to deal with it.

“We are now facing a $16 billion hole, not the $9 billion we thought in January,” Mr. Brown said. “This means we will have to go much further and make cuts far greater than I asked for at the beginning of the year.”

Mr. Brown disclosed the news in a video that had all the trappings of a campaign announcement. In it, he aggressively accounted for the steps he said he had taken to try to scale back a $26 billion deficit he found upon taking office. And he urged viewers to back an initiative he is putting on the November ballot that would increase sales taxes by 0.25 percent and impose an income tax surcharge on wealthy Californians to try to stave off more cuts.

State officials said Mr. Brown’s proposal would include a package of immediate cuts, as well as others that would be triggered only if voters failed to approve his tax plan. The sales tax increase would expire after four years, while the income tax surcharge would last for seven years.

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Posted in Debt, Economy and Debt, Government

April 4, 2012

Recovery threatened by runaway student loan debt

Posted on April 4, 2012 by ifnm| Leave a comment

Mark Zandi, chief economist at Moody’s Analytics, argues that government loans and subsidies are not particularly cost-effective for taxpayers because “universities and colleges just raise their tuition. It doesn’t improve affordability and it doesn’t make it easier to go to college.”

The federal student loan program seemed like a great idea back in 1965: Borrow to go to college now, pay it back later when you have a job.

But many borrowers these days are close to flunking out, tripped up by painful real-life lessons in math and economics.

Surging above $1 trillion, U.S. student loan debt has surpassed credit card and auto-loan debt. This debt explosion jeopardizes the fragile recovery, increases the burden on taxpayers and possibly sets the stage for a new economic crisis.

With a still-wobbly jobs market, these loans are increasingly hard to pay off. Unable to find work, many students have returned to school, further driving up their indebtedness.

Average student loan debt recently topped $25,000, up 25 percent in 10 years. And the mushrooming debt has direct implications for taxpayers, since 8 in 10 of these loans are government-issued or guaranteed.

President Barack Obama has offered a raft of proposals aimed at fine-tuning the system and making repayments easier. Yet the predicament of debt-burdened former students has failed to generate much notice in the GOP presidential campaign. Instead, the candidates are dismissive of government student loan programs in general and Obama’s proposals in particular.

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Posted in Debt, Education, Government

March 29, 2012

Student Loans on Rise — for Kindergarten

Posted on March 29, 2012 by ifnm| Leave a comment

Much of this demand is coming from high-income families. Roughly 20% of families that applied for aid to pay for their children’s kindergarten through 12th grade private school education had incomes of $150,000 or more, according to 2010-11 data, the latest from the National Association of Independent Schools.

Instead of saving up for their sons’ college education, Bill Dunham and his wife are taking out loans for high school. Their eldest son will begin ninth grade at a school in Boston where annual tuition runs around $10,000 — and they already pay $5,000 a year for their younger child. A project manager for a mechanical construction company, Dunham says the schools referred him to lenders who specialize in pre-college education loans. He’s taking a loan to cover his son’s full high school tuition, which he plans to repay over two years. “If we had the money, we’d pay it now,” he says.

It used to be that families first signed up for education loans when their child enrolled in college, but a growing number of parents are seeking tuition assistance as soon as kindergarten. Though data is scarce, private school experts and the small number of lenders who provide loans for kindergarten through 12th grade say pre-college loans are becoming more popular. Your Tuition Solution, one of the largest lenders in this space, says demand for the upcoming year is already up: This month, the total dollar amount of loans families requested rose 10% compared to a year ago; at that pace, the company expects its total funding to rise to $20 million for 2012-13. Separately, First Marblehead, which exited the market in 2008, reentered last year as demand for loans began to rise.

Much of this demand is coming from high-income families. Roughly 20% of families that applied for aid to pay for their children’s kindergarten through 12th grade private school education had incomes of $150,000 or more, according to 2010-11 data, the latest from the National Association of Independent Schools. That’s up from just 6% in 2002-03. Those who don’t get approved for free aid, like grants, increasingly turn to loans, experts say.

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Posted in Bubbles, Debt, Education

March 19, 2012

Video: Oh Canada! Our Bought and Sold Out Land

Posted on March 19, 2012 by ifnm| Leave a comment

Oh Canada presents how nations allow private banks to create their money and put the public in debt to these banks instead of creating their money themselves without any debt. Although it’s main focus is Canada, nations around the world use the same system.


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Posted in Bubbles, Canada, Debt, Economy and Debt

March 13, 2012

The next crisis to avoid is in student loans

Posted on March 13, 2012 by ifnm| Leave a comment

It’s not entirely clear what the implications of this ballooning debt will be, as outstanding student loans approach the $1 trillion mark this year. However, economists have suggested that high student debt combined with a weak job market, particularly for younger workers just starting out, has already added pressure onto the broader economy. And it will likely have an impact on future growth.

Ever since U.S. consumers began owing more on their student loans than their credit cards a couple of years ago, economists have kept a closer watch over whether soaring education debt could be America’s next bubble to pop.

For Federal Reserve Chairman Ben Bernanke, the issue apparently strikes close to home. At a Congressional hearing recently, the central banker told lawmakers that his son, who’s in medical school, will likely rack up $400,000 of student debt upon graduation. The rapid growth of education loans requires “careful oversight” from regulators, he added.

There’s reason to worry. After all, the latest outstanding student loan balance has risen to $870 billion – more than the total credit card debt (at $693 billion) and what people owe in car loans (at $730 billion), according to a report released Monday by the Federal Reserve Bank of New York.

More importantly, the rate of delinquencies may be higher than previously thought, the Fed’s economists noted. That’s because calculations that the central bank usually follows don’t take into account the proportion of federally guaranteed loans that typically don’t require repayment while borrowers are still in school. It also doesn’t consider those loans that can be deferred for up to six months upon graduation. If such groups were excluded from the tally, the percentage of borrowers with past-due balances as of last summer would jump to 27% – about double the 14.4% (or 5.4 million borrowers) under the Fed’s more conventional measure. And as many as 47% of student-loan borrowers appear to be in deferral or forbearance – a temporary option that many unemployed, underemployed or those facing financial hardships often chose.

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Posted in Bubbles, Debt, Economy and Debt

March 12, 2012

Great Moments in European Political Correctness

Posted on March 12, 2012 by ifnm| Leave a comment

Has it ever occurred to the reporter that “genuine equality” exists when everyone has an equal chance and government doesn’t put a thumb on the scale? But regardless of what he thinks, doesn’t good journalism mean keeping his opinions to himself?


Viviane Reding, the senior justice official in the European Union

Europe is in shambles. Nations are going bankrupt. There are riots in the streets. So you would guess that the folks at the European Commission are focused on some big issues.

But you would be wrong.

The eurocrats in Brussels have much bigger fish to fry. They’re addressing the unmitigated horror of inadequate female representation in corporate boardrooms and contemplating continent-wide quotas.

I’m not kidding. Here are some excerpts from the New York Times report.

Frustrated that her previous efforts to get more women into the top echelons of European business have not yielded stronger results, Viviane Reding, the senior justice official in the European Union, was to announce a new effort Monday that could result in legislation requiring that women occupy up to 60 percent of the seats on corporate boards. …E.U.-wide rules were now needed, she said. “Personally, I don’t like quotas,” Ms. Reding said. “But I like what the quotas do. Quotas open the way to equality and they break through the glass ceiling.” Countries that have quotas “bring the results,” she said. Ms. Reding has long campaigned for major changes in European boardrooms and had given industry “a last chance” to improve its record on placing women in top management.

Isn’t that nice. She doesn’t like quotas, but she has no choice because she gave industry a “last chance” to engage in gender bean counting and they didn’t comply.

I wonder if it’s ever occurred to this über-bureaucrat that it’s not her job to tell private companies who to hire, fire, or promote?

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Posted in Affirmative Action, Debt, Europe, Journalism, Political Correctness, Riots

March 10, 2012

Federal Debt Has Already Grown $700B in FY12; $40 Per Day Per Full-Time Worker

Posted on March 10, 2012 by ifnm| Leave a comment

Because this is a leap year, when February has 29 rather than 28 days, Congress and the administration had an extra day over the previous three years to add debt before March 6. The full national debt is now $15,499,023,629,682.44. That equals approximately $138,738 for every full-time worker in the United States.


House Speaker John Boehner and President Barack Obama

So far in fiscal 2012–which began on Oct. 1–the federal government has borrowed more than $700 billion, according to the official debt numbers posted by the U.S. Treasury.

That means that since Oct. 1, the debt has been increasing at a pace of approximately $40 per day per each full-time worker in the United States.

The federal debt is growing at a faster clip this fiscal year than it did in either of the two previous fiscal years that began during the presidential term of Barack Obama. At the beginning of those two fiscal years, however, Obama was working with a Democratic-majority Congress.

This fiscal year is the first one during Obama’s term to start after the Republicans gained control of the House of Representatives in the 2010 elections.

Thus, with a Democratic president in the White House and a Republican speaker in the House federal borrowing has accelerated rather than decelerated.

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Posted in Debt, Government

March 6, 2012

California slipping toward bankruptcy, again

Posted on March 6, 2012 by ifnm| Leave a comment

So have California Democrats learned that government-funded crony capitalist development isn’t good for their constituents’ bottom line? Not at all. State Senate President Pro Tem Darrell Steinberg, D-Sacramento, is looking to “recreate a new set of economic development tools for cities.”


Los Angeles Mayor Antonio Villaraigosa, at center. Also seen from left: Oakland Mayor Jean Quan, San Jose Mayor Chuck Reed, San Diego Mayor Jerry Sanders, Sacramento Mayor Kevin Johnson.

California is going broke. Again. The state controller has estimated that the state will run out of money sometime this month. California will need to find $3 billion in cuts or revenues to keep the state in the black through the rest of this fiscal year.

And next year looks even worse. California’s Legislative Analyst Office projects that, even with billions in one-time revenues from Facebook’s impending IPO, Gov. Jerry Brown’s budget will run a $6.5 billion deficit.

Democrats in state government are desperate for cash. And they are beginning to cannibalize their local government brethren for revenues to make up the difference. The state’s more than 400 redevelopment agencies have become one of the first targets.

Created in the 1940s, RDAs empower a city or county to identify almost any parcel of land as a “redevelopment area.” When that is done, state property tax revenues from that area are frozen and any subsequent increase in property tax revenue beyond the frozen level goes directly to the RDAs.

RDAs are also empowered to borrow money without any voter approval. They can then buy property with that borrowed money and pay it off with the expected revenue stream from their take of the property taxes. All told, RDAs skim $5 billion from Sacramento every year.

Intended for “economic development,” RDAs quickly became the bread-and-butter of almost every pay-to-play construction project in the state. Developers would give money to local politicians, and those politicians would use the RDAs, and their powers of eminent domain, to obtain land for their campaign contributors on the cheap.

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Posted in Bubbles, Business, Debt, Democrats/Progressives, Government

February 27, 2012

Video: Victor Davis Hanson – The New Old World Order

Posted on February 27, 2012 by ifnm| Leave a comment

“You’ve got all the stereotypes that you’ve always had, there’s sunny people down south in places like Italy and Spain and Greece and they’re lazy. They’re yelling, they wave their hands, they don’t know how to do accounting, they take siestas. Then there’s all these rigid, Nordic and Germanic peoples working from 6 to 6 to pay for them. That hasn’t changed. It goes back to antiquity.” Victor Davis Hanson


Victor Davis Hanson


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Posted in Bailouts, Debt, Victor Davis Hanson

February 24, 2012

Armageddon Outa Here!

Posted on February 24, 2012 by ifnm| Leave a comment

As the global financial system seems set to slide into the abyss, Nick Griffin explains that the ‘elite’ have already prepared for the disaster they’ve created – with our money!

[Note: This article was originally posted on December 13th, 2011. The IFNM website was attacked by hackers and many articles are now gone from the archives. As a public service, IFNM is now reposting said articles.]

“We don’t really know what’s happening, but it’s going to get very nasty.” My twitter followers may recall that phrase from a tweet I posted a month or so back. It’s a verbatim quote from a man described as “a fairly high level banker” by a reliable member who runs a clay pigeon shoot to which said banker and several friends had gone for a day out.

He said it in reply to our member’s question as to what is happening with the global financial system and what’s going to happen next. As such it is very significant for two reasons:

First, his admission (which our chap says he’s sure was genuine) that he and his banking colleagues don’t understand what’s going on. Second, that, despite that, they know enough to recognise a financial and economic train crash in progress when they see one, even though they may not know exactly why it’s happening.

As a matter of fact, what is happening is, at root, very simple. It’s just that the Powers That Be don’t want us to know what a monumental mess they and their crooked system have got us all into.

In plain terms, the problem is that they have a fiat money system, where credit is created out of nothing as an interest bearing debt, meeting in head-on collision with the first big impact of Peak Oil: The abrupt ending of several hundred years of overall economic growth rooted in an apparently endless increase in high density fossil fuel energy, from coal and then oil.

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Posted in Bailouts, British National Party, Debt, Europe