The problem with socialism is that eventually you run out of other people's money.

Public Debt Bombs

Former British Prime Minister Margaret Thatcher once observed, "The problem with socialism is that eventually you run out of other people's money." One facet of that problem has arrived in the form of unfunded liabilities for public "servant" benefits. According to the Pew Center, a $1 trillion gap exists between $3.35 trillion in pension, health care and other retirement benefits promised to current and retired state employees as of fiscal year 2008 and the $2.35 trillion available to pay them. That's $1 trillion in unfunded liabilities that must be resolved through higher taxes in concert with drastic benefit reductions.

Not without irony, President Obama's adopted home state of Illinois is in the worst shape of all, managing to fund only 54 percent of those benefits while carrying an astounding unfunded liability of more than $54 billion.

Similar data from the crucibles of democracy also show a strong correlation between states with concentrations of liberals and a state's budgetary health. The five states in the worst financial shape are all bastions of leftist policies -- California, Connecticut, Illinois, New Jersey and New York. Each shares strong appetites for public sector unions and pricey social programs. Illinois, again, is in the worst financial condition, with per-capita debt of $1,877 and unfunded pensions of $17,230. Moody's rates Illinois' general obligation just ahead of dead-last California. On the other side of the equation, three of the top five fiscally healthiest states are conservative states (Utah, Nebraska and Texas), while the other two (New Hampshire and Virginia) are swing states.

Considering the unchecked acceleration of the federal government's looming fiscal Armageddon, voters must ask themselves this November if they wish to call the tune and deal with the issue before debt becomes uncontrollable. Allowing this current crop of suicidal spenders two additional years is an unacceptable alternative. ~~ The Patriot Post

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Comment by: tigger
185 Days 8 Hrs ago

The problem with Republican politics is that eventually you run out of other people's money.

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Reply from: Adamantine
185 Days 6 Hrs ago

No - NO! Most pubs do not want more government, nor federal health care. You have that backwards, Tig!

Reply from: tigger
184 Days 22 Hrs ago

Right. A Republican was in office 8 years and NEVER VETOED a single appropriations bill until Democrats got control of congress. Show me where Republicans want to stop spending! In fact, when Obama proposes cuts and then tax cuts on top of it, Republicans all vote it down, as in his recent small business tax incentives proposal. The Republican mantra is 'we don't care what is done as long as it wasn't proposed by a liberal. No need to read anything, just vote no.' You seem to keep forgetting that our current bailout was initiated by YOUR President, GWB after 8 years of HIS failed financial policies. YOUR guy stood up a year ago December and told us that "Banks are too big to fail" in a desperate attempt to protect his Wall Street buddies. Meanwhile, your idea of the perfect healthcare system, private, has been reduced to a near monopoly (only a few HUGE players) and premiums are being raised 30-40% across the nation. Nice.

Reply from: Adamantine
184 Days 14 Hrs ago

There you go, keep pushing the lie that the financial problems are Bush's fault, what Bullshet! Here are some time lines done by the NY Times (a liberal rag, BTW!). Check the 2003 entry and the 2008 entry. Try to remember this is written by the NY Times so why would you keep the lie alive that Bush did nothing about it?

Financial Crisis: How We Got Here
by the NY Times

1977: Pres. Jimmy Carter signs the Community Reinvestment Act into Law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.

Results: Statistics bear out that it did not help.

How did the government get so deeply involved in the housing market?
Answer: Bill Clinton wanted it that way.

1992: Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.

1993: Clinton extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopoies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.

1994: Despite warnings, Clinton unveiled his National Home-Ownership Strategy which broadened the CRA in ways congress never intended.

1995: Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin's Treasury Dept to rewrite the rules. Robt. Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.

1997 - 1999: Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Developement, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.

With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as musch as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.

Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.

1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.

2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status". Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish. "We think that the statements evidence a contempt for the nation's housing and mortgage markets" Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.

2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

2003: Bush proposes what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.

2005: Then Fed chairman Alan Greenspan warns Congress: "We are placing the total financial system at substantial risk". Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole". Sen. Harry Reid accused the GOP ;of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership" The bill went nowhere.

2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in '07, subprime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.

2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats' talking points about this being a "Republican" disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!!

If you doubt any of this, just click the links below and listen to your lawmakers own words. They are condeming!

http://www.youtube.com/watch?v=68D9XrqyrWo&feature=related#

http://www.youtube.com/watch?v=pIgqfM5C8lY#

http://www.youtube.com/watch?v=H9juJr8CSY4&feature=related#

= = = = = =

Postscript: ACORN is one of the principle beneficiaries of Fannie/ Freddie's slush funds. They are currently under indictment or investigation in many states. Barack Obama served as their legal counsel, defending their activities for several years.

Reply from: tigger
184 Days 13 Hrs ago

My comment is not a lie. Bush did not veto a single appropriations bill. It is fact. It does not mean the mortgage crisis is his fault. It means that Republican policy is spend spend spend. he did nothing but spend so you can't get on your high horse and blame liberals.

Comment by: Adamantine
184 Days 14 Hrs ago

Here is some more anti-Tigger lie material:

“Under Bill Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001. Instead of looking at ‘outdated criteria,’ such as the mortgage applicant’s credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named ‘Caylee.’ Threatening lawsuits, Clinton’s Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn’t a joke—it’s a fact. ... In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration’s affirmative action lending policies as one of the ‘hidden success stories’ of the Clinton administration, saying that ‘black and Latino homeownership has surged to the highest level ever recorded.’ Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn’t get out of their loans by selling their houses. A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it’s gone off.”

GOVERNMENT
“Much of that mess [in the financial markets] is due to the very people we are now turning to for solutions—members of Congress. Past Congresses created the hybrid financial institutions known as Fannie Mae and Freddie Mac, private institutions with government backing and political influence. About half of the mortgages in this country are backed by these two institutions. Such institutions—exempt from laws that apply to other financial institutions and backed by the implicit promise of government support with the taxpayers’ money—are an open invitation to risky behavior. When these risks blew up in their faces, Fannie Mae and Freddie Mac were taken over by the government, costing the taxpayers billions of dollars. For years the Wall Street Journal has been warning that Fannie Mae and Freddie Mac were taking reckless chances but liberal Democrats especially have pooh-poohed the dangers. Back in 2002, the Wall Street Journal said: ‘The time for the political system to focus on Fannie and Fred isn’t when we have a housing crisis; by then it will be too late.’ The hybrid public-and-private nature of these financial giants amounts to ‘privatizing profit and socializing risk,’ since taxpayers get stuck with the tab when high-risk finances don’t work out... Both Fannie Mae and Freddie Mac have been generous in their contributions to politicians’ political campaigns, so it is perhaps not surprising that politicians have been generous to them. This is certainly part of ‘the mess in Washington’ that Barack Obama talks about. But don’t expect him to clean it up. Franklin Raines, who made mega-millions for himself while mismanaging Fannie Mae into a financial disaster, is one of Obama’s advisers.” —Thomas Sowell

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