Daily Note: February 2009

Friday, February 27, 2009

Republicans Lash Out at Budget Plans

Stage is set for budget battle

Boehner

Republicans are once again throwing around the s-word — that’s right, socialism.

Of course, the rhetoric is aimed at President Barack Obama’s budget plans. With $410 billion dedicated to spending on government programs and a push for universal health care, it’s to be expected.

Harsh words

It’s been shown already that Democrats have control in congress. The stimulus bill passed without a single Republican vote in the House. So Republicans know that if they want to win a fight, they have to pull out the big guns. And it shows.

John Boehner, Republican leader in the House of Representatives, on Friday called Obama’s new budget proposal and recently passed economic stimulus plan “one big down payment on a new American socialist experiment.”

Loud voices, minimal effect

It’s likely that the Republicans’ ranting won’t amount to much as far as blocking the budget from passing. After all, the gigantic economic stimulus package passed with only three Republican votes.

Every little bit

But there were those three, and it needed those three to pass. From my point of view, it seems the “socialism” battle cry is aimed at making sure that every single Republican is on the same page regarding the budget.

And it appears it might be working. Those three Republicans who voted for the economic stimulus package have already expressed reservations about the budget proposals. ... click here to read the rest of the article titled "Republicans Lash Out at Budget Plans"

Bank Gives Bailout Money Back | What's the Story Behind TARP?

Thanks but no thanks

IBERIA Bank, a Louisiana company that previously accepted $90 million in government aid, says it will now give the money back. Changes to the Troubled Asset Relief Program would put the bank at a disadvantage, said Daryl Byrd, the bank’s chief executive.

Regulations

It’s true, there are a lot more rules and restrictions on banks that take bailout money now than there were under the Bush administration. So it makes sense that a bank that’s doing just fine would want to forego government aid.

But if the bank was doing just fine, what was it doing taking government aid in the first place?

“We didn’t want this”

Earlier this week I wrote about Northern Trust bank. The company threw a large, lavish party in Los Angeles after accepting more than $1 billion in federal aid. Naturally, Congress was outraged and asked the bank to return to the government the amount it spent on the party.

Northern Trust responded that it had never wanted government aid and had only gone along with the program because of politicians pushing for participation.

A strange story

So what’s going on here? A bank that took $90 million is returning it, so clearly that bank didn’t need the money. Another bank came right out and said it doesn’t need the money. So is the government really asking banks that don’t need help to take the money? And why?

If there are any readers out there who know the answer, I’d really like to know. ... click here to read the rest of the article titled "Bank Gives Bailout Money Back | What's the Story Behind TARP?"

Bond Set At $300,000 For Stanford Financial Exec

A federal magistrate has set bond at $300,000 for the chief investment officer of troubled Stanford Financial Group, accused of lying to investigators about the firm’s activities. Laura Pendergest-Holt must post $30,000 cash and wear an ankle monitor as her case proceeds.

» E-Mail This » Add to Del.icio.us

Scam Watch: Don't Get Duped into Fake Mortgage Relief

Bad news: It could be worse

Don't get hit by a scam.

It’s cruel, but true: Scam artists view struggling homeowners facing foreclosure as money-making opportunities.

There are lots of organizations out there right now trying to help modify loans for people who can’t keep up with their mortgage payments. Unfortunately, there are con artists out there imitating these helpful sources, and they don’t care if you end up homeless.

Don’t get eaten

I think Angie Moreschi of the Consumer Warning Network sums it up well:

“You’ve got that $75 billion out there in housing aid, and that’s going to bring the scam artists out of the woodwork. They are going to be like piranha circling the kill.”

So beware, and watch out for these scams:

1. Phantom help

The FBI has identified three basic types of scams, and this is the first. In this scenario, fake mortgage rescuers promise help, charge a fee and run off with the cash. Usually the scammer is never heard from again, and the mortgage, of course, remains unchanged.

2. Bailout scam

In a couple of scam scenarios, the con artists could end up owning your house. In a bailout scam, scammers will ask you to surrender your house title to them. The con artist says the homeowners can rent the house until the mortgage is “fixed” and then repurchase it.

3. Bait and switch

No one likes reading through mounds of paperwork, but if your house is on the line, it’s time to buckle down. In a bait and switch scam, the con artist dupes homeowners into signing away the deed to their house by telling them they are signing mortgage modification papers. ... click here to read the rest of the article titled "Scam Watch: Don't Get Duped into Fake Mortgage Relief"

The Best of Get Rich Slowly: February 2009

February was a great month for my personal and professional development. After the lows of January, it was great to have a month where I felt like I was stretching-and-growing instead of crashing-and-burning.

All of this growth took time away from the blog, though. I didn’t get as much written as I’d hoped. Still, I think there were some great discussions, which I’ve shared below. And I have a ton of excellent ideas for March. It’s my goal to get to a million visits next month! (GRS missed that target in January by 27,000.)

Here’s the best of February:

February 2nd Playing with numbers: Using spreadsheets to learn about money
February 4th: Save on cell phones with employee and student discounts
February 6th: “What next?” The third stage of personal finance — this post introduced a new theme to the site
February 11th: Investing 101: Average is not normal (a guest post from Carl Richards)
February 12th: The national economy versus your personal economy
February 17th: How to build confidence and destroy fear — an article that took me 18 months to write (no joke!)
February 19th: How I cut my television bill in half
February 23rd: Tightening your belt during tough times
February 26th: Magazines (and websites) about homesteading and self-sufficiency

The blog isn’t the only part of this site. If you have burning questions about personal finance, one of the best places to get answers is the Get Rich Slowly discussion forum.

The forums are a great place to chat with your fellow readers. Have questions about emergency funds? Ask! Want to chat about cheap vacations? This is the place to do it. The forums have 2750 registered users and nearly 34,000 posts.

Subscribe!
You may subscribe to Get Rich Slowly via any of the following methods:

Join over 12,000 people who receive Get Rich Slowly via e-mail by supplying your address:

You may also subscribe to the Get Rich Slowly feed:

You’d be doing me a favor by adding GRS to your Technorati favorites.

Finally, you can follow me on Twitter or join the Get Rich Slowly blog network and/or the Get Rich Slowly page on Facebook.

This weblog is a success because of you and your support. As always, I welcome reader contributions, either as ideas for stories, or as guest entries. If you have any comments or requests to improve this site, please feel free to pass them on.

—
Related Articles at Get Rich Slowly:

Crappy Times

These are difficult days to be blogging about money. There’s lots to talk about, as the economy is front and center in the news, but sometimes it just gets depressing.
This week’s crummy news is that my friend Mortimer got laid off. He thought his job was fairly secure but, surprise! It wasn’t. He admitted to being in a state of shock and denial, but said he at least had some good connections who would recommend him for job opportunities once he updated his resume and started looking. He also said he figured it was time to join Li nkedIn and Facebook to help him network. But his plan for the next day was to enjoy sleeping in and get some laundry done, while waiting for the boxes of his personal belongings from his old office to be delivered.
I didn’t want to sound lecture-y, but I told Mortimer not to lose his momentum. He needs to tackle job-hunting with a vengeance and leave no stone unturned, starting today, not a few days from now.
Those who remember my previous stories about Mortimer will understand my concern. He was laid off once before, and it sent him into a tailspin of depression that coincided with some health problems. For a long time, he was paying for his own health insurance, up to about $900 a month. In the last few years, his finances finally recovered somewhat, but they’re still precarious. He can’t stay unemployed for long.
I would not want to be in his shoes right now, nor in the shoes of many other people I know who have been laid off, or had a spo use laid off. Some of these are people like Mortimer and me,! who onl y have to take care of themselves, but others are parents with kids in college. If I’m a little freaked out these days, I can’t imagine how they must feel.

Amidst all this, I got a phone call the other day from a headhunter. He wanted me to interview for a job that almost sounded perfect– a great fit for my background, a better title, and potentially a raise of about 50% from what I make now. I know headhunters tend to dangle big salaries in front of people, but I knew this could still be a chance to take a good step up the salary ladder, and making more money would help take some of the sting out of all my investment losses. But there were a few reasons I decided not to pursue the job, and one of them was that I just didn’t want to risk making a move right now. My current employer seems to appreciate me, and I’ve already survived some downsizing here. That, to me, seemed safer than going to a new company full of unknowns. This may be a cowardly and short-sighted decision, but it was all I could stomach right now. What would you have done?

More Details on Obama's Budget Proposals

Changes to agriculture

President Barack Obama revealed his budget proposals yesterday. The 2010 budget increases funding for the Agriculture Department to $26 billion. However, it also decreases funding for some programs that have been around for a long time.

No more farm subsidies for some

Over the three years that begin in September, Obama proposes phasing out direct payments to some farmers. This will only affect farmers who bring in more than $500,000 per year in sales revenue.

He will also decrease funding for the Market Access Program. The plan would eliminate funding to promote overseas brands.

Expensive census

Obama hasn’t appointed a Department of Commerce Secretary yet, but he has drawn up plans for how much he wants to spend on commerce. This department’s funding would make a big jump from $9.3 billion to $13.8 billion.

Most of the additional spending would go toward the 2010 Census. Obama wants to ensure the Census is completed “effectively, efficiently and on time.”

Investing in education

The 2010 budget calls for $46.7 billion for education. That’s $500 million more than the education budget for 2009. The budget includes $2.5 billion to help low-income students go to college.

Focus on energy

In the Energy Department, the budget allows for $26.3 billion in spending. That’s in addition to the $11 billion for energy in the stimulus package.

Obama says his plan “supports and encourages the early commercial development of innovative, clean energy technologies through loan guarantees.” ... click here to read the rest of the article titled "More Details on Obama's Budget Proposals"

Tips for Tax Time | Know the Rules, Avoid an Audit

Better safe than sorry

You may think that with all of the other problems the government is dealing with they don’t have time to worry about whether you did you taxes right. However, the opposite is true.

In the last 10 years the IRS has more than doubled the amount of audits it conducts. It uses a complicated formula to decide who it will audit, but there are a few steps you can take to decrease the chances that it will be you.

Take advantage of technology

There are plenty of web sites out there that will let you submit your taxes online. Filing electronically is helpful in a lot of ways. Forgetting to sign tax returns is a very common mistake, but tax software and web sites won’t let you submit a return without an electronic signature.

Most sites and software programs also have built-in programs that check for mistakes on your paperwork so you can catch and correct mistakes before you submit your taxes.

Keep track of donations

Taxes are a good example of a time when doing the right thing can come back to bite you. Deductions for large charitable donations will raise red flags for the IRS. Average charitable donations are usually no more than 2 percent of a person’s income. If you have donated more than that, make sure you explain what the donation was for and why it is so big. Also, it’s very important to include receipts.

Proof to back up big deductions

Other large deductions will raise red flags, too. Many medical bills can ean deductions, but if you have an especially large medical bill that amounts to a large deduction, make sure you have careful documentation. Make sure you have copies of your bills, especially they amount to more than $50,000.

If you’re itemizing reductions, remember that any deductions for meals or entertainment that cost more than $75 require a receipt. ... click here to read the rest of the article titled "Tips for Tax Time | Know the Rules, Avoid an Audit"

Marketing your Business: Becoming #1

How to be # 1 in your business

It is a misconception to believe that you have to have a better product or service to be number one in your business. However, if you are number one, people believe that you have the best product or service.

Start a new category

So, how do you become number one without having the best product or service? The answer is, start a new "category" and be the first in that category.

Tide

When Procter & Gamble introduced Tide many years ago, they could have called the product a “new, improved soap.” Then, Tide was soap, and Tide is soap today, in the sense that soap is a “cleansing agent.” But Tide was made from synthetic materials rather than the fats and lye found in traditional cleaning products like Ivory, Oxydol, and Rinso. Tide could have been called a synthetic soap, but that would have nailed the brand to the soap category. So Procter & Gamble called Tide the “first detergent,” a totally new category and even today, Tide is the leading brand of detergent.

Charles Schwab

When Charles Schwab set up Charles Schwab & Co., he could have focused on providing better service to stock buyers. But he didn’t. Instead he decided to launch the first discount stock brokerage company, and today Charles Schwab & Co. is one of the leading stock brokerage firms in the country.

Dell Computer

When Michael Dell set up Dell Computer, he could have sold his “better” products through conventional computer stores, but he didn’t. Instead he launched the first brand of personal computer sold direct by phone. Today Dell Computer is the world’s largest seller of personal computers and still doesn’t sell any computers through conventional computer stores. ... click here to read the rest of the article titled "Marketing your Business: Becoming #1"

General Motors Bleeding Cash: A Blow-By-Blow

General Motors: building better cash coffins

Joe Weisenthal of The Business Insider reports that General Motors is officially America’s “national money pit.” The automaker is bleeding cash at an astonishing rate. One wonders when they’ll file for bankruptcy, particularly after posting a $9 billion loss in the fourth quarter of 2008.

That amount includes special items; if the numbers for normal operating expenses are taken into account ,the loss was “just” $6 billion. According to Weisenthal, that was $1.5 billion worse than analysts and pundits had predicted. Cash on hand is currently at about $14 billion, which according to Phil Lebeau is only $2 billion higher than the “bare minimum” it takes to run the company.

For all of 2008, the company lost about $31 billion.

Breaking it down

Not surprisingly, the management of General Motors wants $16.6 billion more from Washington. If they get it, it would be shocking if President Obama would allow the same leadership body to remain in charge.

But let’s look at this from a slightly different angle for a moment. A $9 billion fourth quarter loss? In order to swallow these numbers, break it down by the day. It so happens that General Motors was losing $85 million per day in the fourth quarter, which is still monstrous. Let’s go deeper:

General Motors losses…
Quarter: $9 billion
Day: $85 million
Hour: $3.5 million
Minute: $58,333

Give thanks to The Business Insider for sharing these stupefying calculations. Per minute, General Motors lost more than the average household income for the United States in 2007. It’s certainly more than what my household earned. How about you? Would you put that money to better use? ... click here to read the rest of the article titled "General Motors Bleeding Cash: A Blow-By-Blow"

The Art Of Doling Out Stimulus Dollars

The federal government has begun sending tens of billions of stimulus dollars to states and cities to dole out quickly. For advice on how to shell out that money, government officials might want to turn to experienced philanthropists. The Bill & Melinda Gates Foundation has had to learn how to spend a lot of money in a very short time.

» E-Mail This » Add to Del.icio.us

Thursday, February 26, 2009

Obama Reveals Budget Proposals

More money slated for struggling banks

Obama pledges to slash deficit after initial increase.

President Barack Obama unveiled his budget plans for 2009 and 2010 today. Some of the big items for this year include $410 billion for federal programs and dedicating $250 billion to bailing out banks. This is in addition to the $700 billion TARP fund.

Big budgets

The fiscal year 2009 ends in September. Obama’s proposal for the remainder of this year adds up to about $3.94 trillion. The proposed budget for 2010 costs $3.55 trillion.

Big ticket item: health care

As expected, the 2010 budget calls for dedicating $634 billion to to health care reform. The administration calls this a “down payment” on the ultimate goal of universal health care.

Pay caps on government salaries

The 2010 budget calls for a freeze on salaries for all White House senior staff. Other civilian employees for the federal government would be limited to receiving a 2 percent pay raise. This year government workers got up to a 3.9 percent salary increase.

Bumping up deficit, defense

Obama’s plans for 2009 would push the annual budget deficit to $1.75 trillion. The 2010 budget increases defense spending by 4 percent, up to $534 billion.

Military pay caps

In addition to the pay caps for civilian government employees, Obama has also proposed a cap on military salary increases. His plan would limit raises for military personnel to 2.9 percent. ... click here to read the rest of the article titled "Obama Reveals Budget Proposals"

Bangladesh Border Guards Fighting For Pay, Benefits

Casualties in the war against poverty

When people perform services for an employer, the common expectation is that they will be compensated for their work in the form of salary. As economic skies turn dark across the world, the need for sufficient wages in order to live and support families becomes all the more important.

This is as true in impoverished Bangladesh as it is anywhere else, and this is why border guards have revolted against their government employers. Unfortunately, their standoff has led to the loss of at least 11 lives. That doesn’t count scores of others who have died in previous skirmishes.

Tanks end protest over low pay

The standoff may be over now, fortunately. Parveen Ahmed reports for the Associate Press that a show of arms - tanks - have “persuaded” border guards to end a two-day revolt and lay down their arms. In turn, the government has promised amnesty and claims they will “look into” their demands.

“We don’t want to use force to break the standoff,” Prime Minister Sheikh Hasina Wazed said. “But don’t play with our patience. We will not hesitate to do whatever is needed to end the violence if peaceful means fails.”

When the last straw is drawn

Border guards had been frustrated with pay that was not in line with what Bangladesh had paid members of its army. As food prices began to rise, the border guards’ situation became increasingly desperate. Rubbing salt in the wound, the government began to appoint army officers to head the border guards. On the international scene, border guards are also not allowed to work with U.N. peacekeeping forces, a job detail that would mean significantly more money for the guards and their families. ... click here to read the rest of the article titled "Bangladesh Border Guards Fighting For Pay, Benefits"

Is there Value in the Paintings Hanging Right on your own Wall?

I'm sure I have an Old Master hanging on my wall

I may have to call in an art expert to examine that dusty old painting that grandpa left me. I was looking at it the other evening, waiting for my creaky old computer to come online, and I thought that the signature read 'van Dingelen'. If it is by the Dutch Master, I may have a fortune hanging on my wall. I read an article in the NYT recently that said that a van Dingelen had come up on an auction at Sotheby's and how there had been enthusiastic bidding. The painting had eventually sold for about 300,000 dollars. Oh man, could I use money like that!

How do I get hold of Sotheby's and Christies?

Will they come out and inspect the painting or do I have to take it to them, meaning expenses that I don’t have?

It would be a dream

This could be as good as a Lotto win. Can you imagine living with a piece of art that you never even glance at as you pass it a thousand times a day and it suddenly turns out to something of great value? Is it possible that the old painting that's been hanging on my study wall since grandpa died in 1957 could really be worth great globs of money? The lovable old guy knew exactly what he was doing. He probably bought it from the artist himself back in the early 1900's when grandpa started making his first money and wanted to help the starving artist.

I'm not the only one taking a new look at the things I live with. We all go through life picking up pieces we fancy, or that we think will go well with the curtains, or some of us with an eye to the future. We live with them and most of us probably leave without doing anything about them.

It could be money

The more I look at the picture the more I am convinced I should call in that art expert. Of course, the painting may turn out to be someone's third lesson at art school, but who knows? ... click here to read the rest of the article titled "Is there Value in the Paintings Hanging Right on your own Wall?"

Is there Value in the Paintings Hanging Right on your own Wall?

I'm sure I have an Old Master hanging on my wall

How do I get hold of Sotheby's and Christies?

Will they come out and inspect the painting or do I have to take it to them, meaning expenses that I don’t have?

It would be a dream

It could be money

Are we Becoming a Cashless Society?

It looks as though the world is going cashless

We have all heard the expression "the cashless society" and by now we all know that where there's smoke, there's a fire somewhere. We are also all finding out exactly how powerful the influence of the internet is and at last we are learning that every household must have a computer, no matter how much the residents resist it.

Progress

But this is progress. This is how we humans adapt ourselves and move along with the times. Here's a quick example. Remember Amazon.com, the online bookstore that we older folks pooh-poohed and sneered at as we said, "It'll never work. People like to browse and touch and feel the book they are going to buy"? Well, Amazon reported recently that it sold 73 items a second. No touching and feeling in there, right? Not even time for a quick sniff! Want more proof of the way things are going? EBay, the online auction site, is stated to have the 26th-largest economy in the world.

Staggering numbers, huh? Well, here's another one. The incidence of online fraud is going into orbit.

Credit card fraud

All these examples I am firing at you are internet generated. And when it comes to internet transactions, credit card fraud is a major concern. This is what is leading the rush to a cashless society and the introduction of virtual currencies.

Paypal is an internet money transfer system which sends funds up and down using a combination of a credit card or checking account number and an email address. Anyone who uses PayPal will tell you that the system is smooth and efficient. They will also tell you that PayPal loves it because they basically watch what is happening and get a commission on every payment. ... click here to read the rest of the article titled "Are we Becoming a Cashless Society?"

Samim Anghaie Defrauds NASA, Taxpayers of Nearly $1 Million

Your tax dollars at work

Mike Levine of Fox News reports that the Director of the Innovative Nuclear Space Power and Propulsion Institute at the University of Florida may have defrauded NASA out of “hundreds of thousands” of taxpayer dollars for personal use. A court affidavit says there is “probable cause” that the money was laundered in violation of federal law.

The FBI and NASA are investigating Samim Anghaie, 59, and his wife Sousan Anghaie, 55. She is president of New Era Technology Inc. (NETECH) in Gainesville, Fla. Charges have not been filed as yet.

Contract for the high life

Sousan Anghaie talked NASA into awarding NETECH “several fully funded contracts.” This included about $600,000 to develop and study uranium-related technology. But the FBI and NASA allege that in reality, Sousan and Samim used that money for personal luxury use. Among the purchases made were a $480,000 home, a 2007 BMW, a 2005 Toyota Sienna, a 2008 Toyota Corolla, a 2007 Toyota Corolla and properties for their sons. Then there was another $528,000 project. Wow…

Not surprisingly, federal agents have raided the Innovative Nuclear Space Power and Propulsion Institute.

More accountability with contracts

Among the contributions Sousan sought was $350,000 in order to pay three employees (including her son and brother-in-law). However, it is documented that those three workers received no monetary compensation for their work. Furthermore, it’s unclear whether any of the proposed work they were supposed to be doing was completed. This, according to an unsealed affidavit, is just one of “multiple fraudulent certified contract proposals” the Angahies made to NASA so that they would receive “maximum funds” for their “research projects.” ... click here to read the rest of the article titled "Samim Anghaie Defrauds NASA, Taxpayers of Nearly $1 Million"

Have Skills, will Start Business

The entrepreneur in me

Find the entrepreneur in you

I have entrepreneurial flair, passion and I can prepare a business plan. I have always had a dream about running my own business my way and making it my success; now's my chance!

It may be time to follow your dream

They say you should follow your dream and entrepreneurial passion. You are more likely to succeed when you're doing something you love for a living and, besides, small businesses have shown they stand a good chance of flourishing in tough economic times. If you're an entrepreneur at heart, this year may be the ideal time to launch that business you have been dreaming of. The tough economic times are in good supply.

How to start

If you a true entrepreneur, there will come a time when you will know that you have to take the plunge and quit your day job. If you don't grab this opportunity, you will probably never do it.

A business plan

Create a business plan

Look for and identify a gap in the market where you can transform your business idea into a workable plan. A well-presented and researched business plan will convince a bank, the small business administration or prospective financier that you have thought your idea through from A to Z and that you have taken eventualities into consideration. Hone your business plan, work out cash projections and know the bottom line down to the last cent. A sensitivity analysis should be part of the business plan so that interest rate fluctuations are catered for. ... click here to read the rest of the article titled "Have Skills, will Start Business"

Treasury Unveils "Stress Test" For Banks

Obama reveals the secret formula

At what point will the government step in and take control of failing banks? That’s a question that a lot of Americans have been wondering about lately, and all we’ve known up to this point is that President Obama has made reference to a “stress test” that will be the determining factor.

Now the wait is over. The Treasury has revealed what the “stress test” will entail.

Their eyes are on you

David Ellis of CNNMoney.com reports that Obama’s plan to monitor and judge the health of America’s 19 largest banks was hinted at when the White House introduced its financial recovery plan. Designated banking regulators will watch banks like Citigroup, Bank of America and JPMorgan Chase and “estimate firmwide losses for the next two years if economic conditions worsened and the bank’s ability to absorb such losses.”

The Office of Thrift Supervision and the FDIC specifically will address asset performance - which shall include loans and securities like collateralized debt obligations - and judge it under two scenarios. The first would look at consensus economic expectations, while the second would assume a worst case scenario where unemployment went above 10 percent and home prices went down another 20 percent over the following two years.

Do-it-yourself firstC

Depending upon how the banks rank in these scenarios, the government will know which ones need the most help and perhaps additional stimulus. However, if it is determined that a bank needs help, they are first given six months to find private backing. If that fails, then the government will step in and buy convertible preferred shares. In time, the banks would have to convert that into common stock, which would boost capital to the necessary degree. ... click here to read the rest of the article titled "Treasury Unveils "Stress Test" For Banks"

Nation's Budget Dedicates $634 Billion to Health Care

Gearing up for health care reform

President Barack Obama’s presidential address last night was aimed at instilling hope in the American people and inspiring confidence in their leader. That speech didn’t come a moment too soon.

Obama plans to unveil his plans for the nation’s budget tomorrow. Among those plans, he’d like to dedicate $634 billion over the next 10 years to a health care “reserve fund” that would help pay for overhauling the country’s health care system.

The process begins

Obama’s ultimate plan is to provide universal health coverage. The first step in his 10-year plan is to start a dialogue with Congress on what to do about the 48 million uninsured Americans.

Congress has already approved $32 billion to expand coverage for children in low-income families and $19 billion fund computerization of health records.

A pricey system

Officials called the fund a “down payment” for health care reform. Experts say the cost of paying for all uninsured Americans to have access to health care could easily exceed $1 trillion over 10 years.

Part of the problem is the high cost of health care.

Some experts say 30 percent or more of what the nation spends may be going for tests and treatments of little or no lasting benefit.

Hurting families

Obama says medical bills are a leading cost of individual bankruptcy. The cost of and spending on health care have both continued to rise, even as the economy shrinks.

White House officials say slowing increases in the cost of health care and ensuring everyone has coverage is essential, in the long run, to solving the nation’s budget problems.

More budget requests

Obama’s budget also seeks to extend the $400-per-year tax credit to workers. It also proposes increasing the top income tax rate from 35 percent to 39.5 percent. The proposed budget would also update the alternative minimum tax, which reportedly would add $150 billion to the deficit by 2013. ... click here to read the rest of the article titled "Nation's Budget Dedicates $634 Billion to Health Care"

Nation's Budget Dedicates $634 Billion to Health Care

Gearing up for health care reform

President Barack Obama’s presidential address last night was aimed at instilling hope in the American people and inspiring confidence in their leader. That speech didn’t come a moment too soon.

The process begins

Obama’s ultimate plan is to provide universal health coverage. The first step in his 10-year plan is to start a dialogue with Congress on what to do about the 48 million uninsured Americans.

Congress has already approved $32 billion to expand coverage for children in low-income families and $19 billion fund computerization of health records.

A pricey system

Part of the problem is the high cost of health care.

Some experts say 30 percent or more of what the nation spends may be going for tests and treatments of little or no lasting benefit.

Hurting families

Obama says medical bills are a leading cost of individual bankruptcy. The cost of and spending on health care have both continued to rise, even as the economy shrinks.

White House officials say slowing increases in the cost of health care and ensuring everyone has coverage is essential, in the long run, to solving the nation’s budget problems.

More budget requests

Workplace Refrain: Do More With Less

The government says 7.6 percent of Americans are unemployed. That’s a scary number, but still most workers have jobs. These days many employees are hearing four familiar words: So more with less.

» E-Mail This » Add to Del.icio.us

Wednesday, February 25, 2009

Obama Names Third Commerce Secretary Nominee

Third time’s the charm?

Gary Locke

Once again, President Barack Obama has named his nominee to head the Department of Commerce.

Former Washington Governor Gary Locke is Obama’s pick to run the department. The main goal of the United States Department of Commerce is to promote economic growth.

Job description

If the Senate approves Locke, he will oversee many operations, including international trade, oceans policy and the 2012 Census. According to the Associated Press:

Obama praised Locke … as a man who shares his vision for turning around the moribund economy, and as someone who is committed to doing what it takes to keep the American dream alive.

Commerce Department saga

Obama nominated his first choice for Commerce Secretary, New Mexico Governor Bill Richardson, shortly after the November election. However, the Democrat withdrew from consideration amid allegations of wrongdoing regarding contract awards in his state.

This month, Obama nominated Republican Senator Judd Gregg, from New Hampshire, for the position. As negotiations over the economic stimulus package began to wrap up, Gregg also withdrew his name from consideration. He said he had “irresolvable conflicts” with Obama’s policies.

A little about Locke

Locke served as governor of the state of Washington from 1997 to 2005. Now he works for a law firm in Seattle. He deals with issued involving China, energy and governmental relations. He was the United States’ first Chinese-American governor. ... click here to read the rest of the article titled "Obama Names Third Commerce Secretary Nominee"

Obama Names Third Commerce Secretary Nominee

Third time’s the charm?

Gary Locke

Once again, President Barack Obama has named his nominee to head the Department of Commerce.

Former Washington Governor Gary Locke is Obama’s pick to run the department. The main goal of the United States Department of Commerce is to promote economic growth.

Job description

If the Senate approves Locke, he will oversee many operations, including international trade, oceans policy and the 2012 Census. According to the Associated Press:

Obama praised Locke … as a man who shares his vision for turning around the moribund economy, and as someone who is committed to doing what it takes to keep the American dream alive.

Commerce Department saga

A little about Locke

Westgate Capital Manager Arrested on Investor Fraud Charges

Westgate Capital manager caught

"Nice one, James."

The fallout from the Bernie Madoff disaster continues. So, when is it that you’re going to step up your monitoring of financial fraud, SEC? Any time now…

Alistair Barr of MarketWatch brings our attention to James Nicholson, 42, the manager of the investment firm Westgate Capital Management LLC. Mr. Nicholson has been ceremoniously arrested at his Saddle River, New Jersey home on charges of securities fraud and bank fraud, according to the Department of Justice.

I learned it from you, Bernie

Nicholson told investors that Westgate Capital had assets within the company that ranged anywhere from $600 to $900 million. However, in true Bernie Madoff style, the real value of Westgate’s assets was substantially lower. As a result, investors dumped as much as $100 million into a variety of funds managed by Westgate since 2004.

It’s in the brochures; must be right!

Futhermore, Nicholson’s associated Westgate Strategic Growth Fund was audited by an independent accounting firm. However, the DOJ determined that this accounting firm was actually a virtual firm registered at a virtual address. In case of telephone inquiries, an answering service was set up that would direct calls to a phone number that Nicholson provided. ... click here to read the rest of the article titled "Westgate Capital Manager Arrested on Investor Fraud Charges"

Massive Layoffs Make Massive Jump in January

Payrolls get the ax

The number of companies that made “mass layoffs” in January is up 50 percent from the same month last year. Mass layoffs are when a single employer lays off more than 50 employees at one time.

A total of 2,227 employers made mass layoffs in January, the government says.

Big companies make big cuts

Companies including Boeing, Pfizer, Caterpillar and Home Depot announced that they would make mass layoffs this year. The Labor Department’s report doesn’t count layoffs that have been announced but are not yet completed.

The 50 percent jump only represents the number of laid off workers that turned in claims for unemployment benefits.

Not even sports are safe

NFL Commissioner Roger Goodell has taken a 20 percent pay decrease, and the league has cut 169 jobs. Milliken & Co., a South Carolina-based textile maker, says it will cut 650 jobs. Zales jewelers plans to shut down 115 stores and cut 245 jobs.

More headed for the chopping block

Spansion Inc., a flash memory maker, said it plans to lay off about 3,000 employees this year. Computer chip maker Micron Technology Inc. says it will lay off as many as 2,000 workers by the end of August.

What’s this? Good news?

Consulting firm Watson Wyatt says the number of corporations that expect to make job cuts has decreased. In December, 23 percent of corporations said they expected to have to make job cuts. Now only 13 percent expect they will lay off employees. ... click here to read the rest of the article titled "Massive Layoffs Make Massive Jump in January"

The Credit Crisis — Visualized

Over at Vimeo, Jonathan Jarvis has created a ten-minute film that offers an overview of the credit crisis. If you’ve been struggling to understand what went wrong with the American economy, this will give you some of the basics:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

If you’d like more information, I encourage you to carve out time to listen to two radio broadcasts, both from NPR’s This American Life:

“The Giant Pool of Money” explains how the housing bubble was created by a chain of people who thought the old rules of money no longer applied.
“Another Frightening Show About the Economy” takes a deeper look at the developing credit crisis.

Finally, you may want to check out my list of essential reading about the market meltdown. The information is five months old now, but still useful.

—
Related Articles at Get Rich Slowly: