Tag Archives: Democrat Party

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Puerto Rico debt crisis will impact U.S. investors

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Which financial companies hold Puerto Rica debt?
Which financial companies hold Puerto Rico debt?

Pay attention to this article from Investors Business Daily if you have investments.

It says:

With the financial world transfixed by Greece’s debt-driven meltdown, Puerto Rico announces it can’t pay its $73 billion in debt. Once again, we’re learning that welfare statism is no replacement for fiscal responsibility.

Compared to Greece’s $353 billion in debt, Puerto Rico’s $73 billion doesn’t sound so big. On a per capita basis, it’s about a third less.

But appearances deceive. Puerto Rico is in deep, owing actually much more than that amount.

We learned this after a report on Monday, co-authored by former International Monetary Fund No. 2 Anne Krueger, revealed the island’s finances are a shambles.

The devastating analysis noted that some 150 agencies ran up deficits that couldn’t even be accurately counted, so the true indebtedness might be even higher — as much as $100 billion by some estimates.

Now Republicans favor privatizing state-owned organizations because the private sector is more efficient. Democrats want to nationalize private sector services so that they can control access to it and use their monopoly to buy votes.

What does Puerto Rico do?

The government has funneled public money to state-owned enterprises that are supposed to be financially independent. Worse, the report said, many workers no longer even look for jobs, since welfare benefits pay more than actual work.

Now guess whether a Republican or a Democrat is to blame for this. Which party likes to borrow money from future generations in order to buy votes with spending right now?

In short, the government has been horrendously mismanaged.

[…]The problem is, Puerto Rico’s dysfunctional economy means the debts only piled higher, with no way to pay them. Deficits grew, too, since spending was never really cut.

Now, as a commonwealth, it can’t declare bankruptcy. It can default, however. That would be messy, creating a financial crisis in the territory, causing businesses to close and sending thousands fleeing to the U.S. mainland. Yet the Democrat-led government has said that, while it hopes to avoid default, it won’t cut either pensions or spending. So disaster looms.

Wow, just like Greece – they refused to cut pensions, raise retirement ages and cut spending, too. There is some good news – we probably won’t have to bail them out:

A bailout? Even President Obama rules that out. If the White House couldn’t bail out union-run Detroit, it sure couldn’t do it for Puerto Rico.

And, despite Padilla’s denials, politics is very much a part of the equation. Just like Greece and dozens of other financial basket cases, Puerto Rico has become a welfare state run by leftist bureaucrats and politicians that overspends on public pensions without having the money to pay for it all.

It’s a story repeated over and over around the world.

If Puerto Rico defaults, it won’t suffer alone, however. As the New York Times notes, “much of Puerto Rico’s debt is widely held by individual investors on the United States mainland, in mutual funds or other investment accounts, and they may not be aware of it.”

So better check your 401(k). Or your hedge fund. Because virtually all of that $73 billion is held by the U.S.

This is not to time for you to quit your job and go on vacations or focus on fun in any way. There is a world-wide financial crisis brewing. It’s nothing to panic over, but this is serious enough for us all to focus on our careers and savings, and cut our own spending. It’s not just Greece or Puerto Rico either, there are other warning signs from other countries, e.g. – China, Japan, etc.

Look:

Meanwhile, across the globe, we’re headed toward a reckoning on excessive debt, and it won’t be pretty. The welfare state model with big pensions for all and lavish unemployment benefits is dead. We’re watching its death throes now. Only the politicians don’t get it.

Even here, many states have severe debt problems with underfunded public sector obligations, as well as other problems. There’s just this problem with people wanting to depend on government. There are too many people wanting a free ride, and too few people willing to work and raise the next generation of workers.

News

New report: IRS used hundreds of lawyers to hide IRS persecution of conservatives

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IRS Chief Fascist Lois Lerner
IRS Chief Fascist Lois Lerner

This is from the Washington Times. (H/T ECM)

Excerpt:

The IRS’s director of privacy, governmental liaison and disclosure division testified Wednesday that the tax agency set up a special team with hundreds of lawyers to handle the probe into whether Tea Party groups were targeted, but repeatedly said she had no idea how it operated.

Mary Howard, who also works as the head Freedom of Information Act officer in the IRS, told the House Committee on Oversight and Government Reform that once the “special project team” was created and operational, she never saw requests for information.

“My understanding was that it started soon after the request came from Congress and other investigators asking for documents around this whole issue,” which she surmised meant around spring of 2013.

Asked who was on the team, she said: “My first hand knowledge of that is none.” But she did say the Chief Council of the IRS — one of only two political appointees in the IRS; the other is the commissioner — was on the “special project team,” as were “hundreds of attorneys.”

She said her office did not interact with the White House, but asked whether the “special project team” did, said: “I have no personal knowledge of how that team acted except that I know they amassed hundreds of attorneys to go through the documents and redact them.” 

[…]Congress held Lerner in contempt after she claimed she did not know about the targeting, but then later took the Fifth Amendment to avoid answering questions. She was never prosecuted by the Justice Department, but two dozen House members want new Attorney General Loretta Lynch to pursue charges.

Just to be clear – “go through the documents and redact them” means conceal information from Congressional oversight.

This is the very definition of a cover-up. As if we did not have enough scandals in this administration already. We must be up to about a dozen Watergates already.

The ACLJ notes that this is not the first shifty behaviour from the IRS lawyers – delaying the applications of Tea Party groups for years:

According to multiple IRS attorneys in D.C., including tax law specialist Carter Hull, who oversaw the review of the Tea Party cases, Lois Lerner, former Director at the Exempt Organizations Division, and her top advisor directed that certain Tea Party applications as part of a “test” group be sent to her office and IRS Chief Counsel for review in the winter of 2010-2011.

Chief Counsel’s office, after months more of delay, then demanded Mr. Hull make further inquiries of the Tea Party.  According to the testimony, it was Chief Counsel’s office that was demanding to know more information about the conservative groups’ activities “right before the [2010] election period.  In other words, immediately before.”

In addition, the testimony indicates that the Chief Counsel’s office was heavily involved in preparing a template for handling these cases, something Mr. Hull testified was impractical “because these organizations, all of them are different.  A template wouldn’t work.”  Yet, as he testified, a template was prepared by someone in Chief Counsel’s office in conjunction with other tax law specialists.  Even more disturbing he testified that after three years, IRS Chief Counsel’s office had not made a determination about these “test” Tea Party cases, even though in 2011, Mr. Hull had all the information he needed to make a recommendation as to their request for tax-exempt status.

The ACLJ has an ongoing lawsuit on behalf of many of the conservative / pro-life / Christian groups that were targeted by the IRS. It’s times like this where I wonder what my friend the evangelical woman who voted twice for Obama would say. She is the one who is for environmentalism and big government, you remember. Well, there’s your big government right there, Jessica. Surprise! They don’t like Christians or conservatives.

News

New study: voucher program improved odds of poor students graduating by 21 percent

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The Daily Signal reports on the study.

Excerpt:

Private school choice initiatives have become increasingly common across the United States. Far from being rare and untested, private school choice policies are an integral part of the fabric of American education policy.

In the United States today, 56 different school choice policies exist in 28 states plus the District of Columbia, and the number of choice policies has approximately doubled every four years from 2000 to 2012.

The District of Columbia Opportunity Scholarship Program remains the nation’s only federally sponsored private school choice initiative. It provides scholarships worth up to $8,000 in grades K-8 and $12,000 in high school to low-income children in D.C. to attend any of more than 50 participating private schools.

When the Opportunity Scholarship Program was launched in 2004, the U.S. Department of Education’s Institute of Education Sciences selected me to lead the initial government evaluation of this pilot program in parental school choice. Demand for scholarships exceeded supply, so most applicants faced a lottery to determine if they would receive an Opportunity Scholarship, permitting us to use a “gold standard” experimental research design to determine what impact the program had on participants.

Students in our pioneering study graduated from high school at a rate 21 percentage points higher than they otherwise would have as a result of using an Opportunity Scholarship. In scientific terms, we are more than 99 percent confident that access to school choice through the Opportunity Scholarship Program was the reason students in the program graduated at these much higher rates.

But that’s just one program, how about some others?

My research team similarly found the Milwaukee Parental Choice Program significantly increased the rates of high school graduation, college enrollment and persistence in college for the low-income students participating in our nation’s oldest urban private school choice program.

Researchers at Harvard University and the Brookings Institution determined that a privately funded K-12 scholarship program in New York City significantly increased the rate at which black and immigrant students enrolled in college. Increasingly and consistently, researchers are finding that private school choice programs like the Opportunity Scholarship Program enable students to go farther in school.

It is so good for the poor, minority children if we let their parents get money for school tuition directly. We should let parents make the choice about which school is best for their child. But, Democrats oppose school choice, because they want their allies in the teacher unions to be insulated from competition from better-performing private schools.

Look how the Democrats have fought to kill the D.C. voucher program. They talk about helping poor kids, but they don’t really mean it. And note, that article is written by ultra-leftist Democrat Juan Williams, but even he cares more about poor, minority kids getting an education than the Obama administration does.