The current Wall Street credit crisis revolves around the fact that banks and brokerages over-extended loans to people that were probably not credit-worthy for those loans.  While the individuals who took those loans out are not blameless, the banks and lenders that gave out the loans had the power to make better decisions.  Now, the market is holding those less than perfect decisions against those banks.  Today, the interest rate that banks are charging each other to borrow money (referred to as the “LIBOR”) is in the high 6% range, it’s simply too expensive for banks to borrow money from other banks.

This situation was created by poor business decisions.  The fact the interest rate that banks are charging each other is so high shows they do not trust each other. 

If the banks do not trust each other, how can taxpayers and their representatives in Congress trust them any more?

This crisis will not be solved by giving Wall Street a wheelbarrow full of freshly printed cash.  This problem requires a “trickle-up” plan to make it easier for consumers to pay their own bills.

The following are a few ways the Federal Government can inject cash into the credit market without spending taxpayer’s money:

•  Tax-Deductible Debt Payoff – Allow the average American to write off their Federal Taxable Income an amount equal to the amount of debt paid during the 2008 and 2009 tax years.  (If a person pays off $20,000 worth of debt – principle and interest combined - they can write that $20,000 off their taxable income.)

•  Restrain Credit Card Interest Rates – Americans are having difficulties paying their credit card bills and mortgages, by restraining credit card interest rates people can start paying down more of their balances, which will allow these banks to re-balance their own finances.  Credit card holders can either reduce their credit card balances faster, or better afford their mortgages.

•  Mortgage Voucher Program – the Federal Government should cover the mortgage interest payments of any homeowner who wishes to continue making minimum payments to stay in their home.  Once the balance of the mortgage is more in line with the real value of the home, the program can cease and people can stay in their homes.

•  Corporate Tax Deferment – Allow corporations a two-year deferment of federal corporate income tax payments.  The corporate income tax rate in America is 35%, to ensure that these corporations are around to pay any tax, Congress should allow them to defer their tax payments for two years while they get their financial houses in order.

Congress and Wall Street are making this situation more complicated than it really is. 

American families deal with debt every month on their own kitchen tables when the bills come in the mail.  Allowing those families to better afford those bills will bring a quicker flow of cash to the struggling credit market without putting the taxpayers on the hook.

Sincerely,
Dustin Gawrylow, Private Citizen

Ben Bernanke encouraged the nation’s bankers to write down the principal on millions of mortgage loans. Voluntary loan modifications aren’t doing enough to stop foreclosures, declared the chief steward of the U.S. financial system. “In this environment,” he said, “principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.”

Only the day before Mr. Bernanke dropped his bomb, Treasury Secretary Hank Paulson disclosed that “since July more than one million struggling homeowners received a workout—either a loan modification or a repayment plan that helped them avoid foreclosure.” In January alone, there were 167,000 such modifications, with the number of borrowers receiving help rising faster than the number of foreclosures.

This banking and mortgage crisis was caused by lenders giving loaning money to people that were not credit-worthy, and those un-credit-worthy people accepting that money.  If blame has to be divvied out, the lenders that made the poor business decisions to lend the money are 75% to blame, and the people that accepted the money are 25% to blame cause they most likely knew they could not afford to pay it back.

But Bernanke’s “solution” will drive investors away from the bond market’s that keep the mortgage business afloat. 

We knew Bernanke was no Greenspan, but who knew he was out to destroy both personal finance responsibility and an entire sector of the economy?

The University of North Dakota’s law school wants to start a series of steep tuition increases for new students.

For North Dakota residents who enroll in the law school this fall, the plan would raise tuition 15 percent each year for four years. A year’s tuition would increase from about $6,000 to $10,620 during the 2011-12 school year.

Students already in the law school would see their tuition bills go up as well, but the increases would be smaller. Law school officials say UND’s tuition is cheap compared to law schools at comparable universities.

The Board of Higher Education’s budget, audit and finance committee has endorsed the proposal. It goes to the full board later.

Why is is tuition going up?

Not because professor pay is going up.

Not because of high energy costs.

According to “Law school officials” tuition is going up because “UND’s tuition is cheap compared to law schools at comparable universities.”

And what’s the deal with the arbitrary 15% increase for 4-consecutive years?  What dark hole did they pull that figure from?

The role of a publicly financed university is to provide the best education at the lowest cost, right?

At what point did UND Law School become a revenue source for the state?  At what point did the Board of Higher Education start rubber stamping policies that will drive more young people out of the state? (Hint: It started a long time ago)

Driving up the cost of education because it is cheap should tell every North Dakotan that the unelected and unaccountable policy makers in the North Dakota University System are out of touch and actively trying to hurt the state.

We hear it all the time, but in North Dakota, who are the rich?

97.5% of North Dakota households make less than $150,000 Gross Adjusted Income. 

There simply aren’t not that many “rich” people in North Dakota, so the argument that the state income tax is progressive is false. 

Looks more like we are taxing the poor right out of the state.

But his stances on economics, immigration, limited government, and abortion make him - on balance - truly the most Republican candidate in the race.

For those Conservatives out there that do not like Ron Paul for his perceived isolationist stances keep this in mind -

Fortress America is better than No America.

John McCain’s immigration and open borders policy is far more dangerous to the security of this nation than Ron Paul’s stance that we should disengage from the world.

Mitt Romney is a fraud. A phony. A plastic candidate. He will govern by public opinion and polls. He will govern as the Republican version of Bill Clinton.

Mike Huckabee is a liberal. A Southern Socialist. He would use the power of government to mold America and limit freedoms based on what he sees as “God’s Way.” For all the faults of our secular government, we do not want a theocratic government. Huckabee would bring a Holy War against all of Islam, not just the terrorists. He has said in these words “the constitution must be amended to fit the word of God.” This is not what we need.

For those of you that do not like the choices of McCain, Romney, and Huckabee but are reluctant to vote for Ron Paul, let me finish with this:

If you truly believe that Ron Paul will not be the nominee, and you don’t like the other choices, what will it hurt to vote for Ron Paul?

Let’s send a message to the Republican Party - we’re mad as hell and we aren’t going to take it anymore.

Ron Paul is a vote for None of the Above.

Ron Paul = None of the Above

Denying there is a demographics problem in North Dakota will not make it go away.  The population is getting older; this is illustrated by the state’s human service budget - which has been out-of-control for the decade. 

We know young people are leaving, this has been happening for a long time.  But older folks in the prime of their income earning lives are also leaving the state as shown by the studies that quantify the lost income generating potential at $1 billion over the last decade.

Retired folks are also leaving, for better weather and better tax climates taking up residency in Florida, Nevada, or another state with no income tax because they don’t want to lose a dime of their retirement income. 

The danger in ignoring these trends is this: as the population ages and retires, who is going to pick up the slack?  We’re told there aren’t enough workers to man the oil rigs.  We’re told there aren’t enough engineers and grad students to work the research projects at the universities.  When are we going to wake up and stop denying there is a problem?

The fewer people of working age that there are, the higher the taxes will be for those that are working.  These higher taxes will drive people out of the state, further burdening those left to work.  Eventually the economy will stagnate as the population dwindles and North Dakota will bottom out at about 450,000 like Wyoming. 

The first step to recovery is admitting you have a problem.  Attacking a national magazine for holding the mirror up to our face is not going to solve anything.  We need to increase population retention by reducing the tax burden, reducing the role of the state government in the economy, limiting spending, and reducing the tax rates – both income tax and property tax – for the long term.

John McCain’s “surge” in New Hampshire will likely be short lived unless he can run within 3 points of Mitt Romney in Michigan. Since Romney’s father George was governor of Michigan, failing to decisively win Michigan would probably represent a death blow to any momentum being created going into his February 5th efforts.

Mike Huckabee, with his 3rd place - beating Rudy Giuliani in his back yard - showed that his strength goes beyond the bible belt. Ron Paul’s tie with Giuliani in independent rich New Hampshire would have to be viewed as a slight disappointment given his stronger than expected showing in Iowa last week.

Michigan will also be big for Fred Thompson whose future in South Carolina may be predicted by McCain’s performance in Michigan. If McCain struggles in Michigan and Romney walks away with the state, the likelihood that McCain will bow out and endorse Thompson before February 5th increases. A strong McCain performance in Michigan will mean that Thompson will have to wiin South Carolina on his own and will require a dismal McCain performance in S.C. to build any momentum at all.

Of course, being the Fusion Candidate allows Fred Thompson to hang back and aim for delegates rather than states and hope for a convention decision.

Democrats

Only time will tell if anything comes out of the mid-day reports of ballot shortages. Speculation of tampering and fraud on the Democrats side started almost as soon as the polls opened.

Hillary Clinton’s surprise attack in New Hampshire will propel her into Nevada. South Carolina is now ‘do or die’ for John Edwards - anything less than a win in S.C. and he might as well go sit on the chair that says V.P. Candidate on the back.

The notion that Barrack Obama is mortally wounded due to New Hampshire is farcical. His showing in the south and the industrial mid-west will be far more important than New Hampshire.

Summary

Overall, New Hampshire really did not change anything, the media will increase it’s fixation on Hillary’s emotional outbursts. Obama is still the man to beat on the Democrats’s side, and Huckabee looks to be more than just a passing fad.

First, Mike Huckabee represents not only the evangelical wing of the party, but the lower-income working-class Republicans.  What is referred to as Huckabee’s populism is more accurately defined as pessimism: pessimism of the future, of corporate America, of the average American’s control over his own life.  This is typically a feature of Democratic rhetoric, but it resonates with 3rd generation Dixiecrats who are the grandchildren of the original Dixiecrats that left the Democratic Party in the 1940’s.

Second, Mitt Romney represents the upper-middle class and upper-classes of the GOP.  His ties to wealth and successful business management make him the ideal candidate for the investor class of the party that does not see inherent problems with globalization so long as the bottom-line is improved and the dividends continue.  This is the new incarnation of the Country Club Republican.

Finally, Ron Paul represents the idealistic wing of the party.  While this wing lacks a realistic view of the geo-political situation, it represents the most optimistic view of freedom and the future.  In many ways, this is the core of Reagan Republicanism representing the “morning in America” attitude personified by Ronald Reagan.

In the end, it seems that the eventual nominee will be required to be a “fusion” candidate to bring these three wings of the party together.  The most likely candidate to fulfill this position would be Fred Thompson, who seems to have no real opposition but just lacks cohesive support.  As Huckabee and McCain fade away, this will change.

FredRepublican.com

WASHINGTON - The federal budget deficit would have been 69 percent higher than the $162.8 billion reported two months ago if the government had used the same accounting methods as private companies, the Bush administration reported Monday.

The administration, releasing the “Financial Report of the United States Government” for 2007, said that the deficit under the accrual method of accounting would have totaled $275.5 billion for the fiscal year ending Sept. 30.

Enron did not invent Enron-Accounting.

The Federal Government did.