Free Republic

Has America’s choo-choo jumped the tracks? I was out of the country for a few days and news from this great republic reached me only fitfully. I have learned to be wary of foreign reporting of U.S. events, since America can come off sounding faintly deranged. Much of what reached me didn’t sound entirely plausible: Did the entire U.S. media really fall for the imaginary dead girlfriend of a star football player? Did the president of the United States really announce 23 executive orders by reading out the policy views of carefully pre-screened grade-schoolers (“I want everybody to be happy...

The Obama Economy: Americans are drawing down their 401(k)s for nonretirement needs in record numbers, just as Social Security goes bust. This portends poverty for millions as the White House fiddles. Cat food, anyone? One out of four U.S. workers with 401(k) retirement savings accounts has been forced to cash them out or borrow from them at high costs just to stay solvent. The Washington Post, citing a report from financial advisory firm HelloWallet, said the withdrawals have drained $70 billion, or an astonishing near-quarter of the total $293 billion, in America's retirement accounts "undermining already shaky retirement security for...

Politics: President Obama threatened Social Security checks would be delayed if Congress didn't play ball on the debt ceiling. Once again, he turned pensions into a political football. There are ways to stop this. Americans should know: Social Security payments won't be affected by debt-ceiling talks, and Obama knows it. Still, it's not as if the Social Security system is healthy. In a Page 1 story Monday, IBD's Jed Graham reported that 2013 marks the first year new Social Security retirees will outlive the trust fund. Their benefits will be slashed 25% as the system goes bust in 2033. So...

Democratic Illinois Rep. Danny K. Davis told The Daily Caller that President Obama should have the power to raise the nation’s debt ceiling without congressional approval, citing the example of President Abraham Lincoln issuing the Emancipation Proclamation as a good use of presidential authority. “Sometimes when we’ve gotten great answers is when presidents have had enough authority to take some actions,” Davis told TheDC on Capitol Hill Friday. “I mean, remember that we just celebrate the 150th anniversary of the Emancipation Proclamation, and if Abraham Lincoln had not had the power, authority and the will to make that decision, we...

One item within the bill that was hurriedly passed in the wee hours — presumedly without reading it — was a one-year extension of a tax credit for wind energy. For new installations, it gives the industry a 2.2-cent credit per kilowatt-hour of energy produced for the first 10 years the installation is in operation. In a related story, Breitbart.com reported an extension of a tax incentive favoring the film industry. Section 317 of the freshly approved legislation includes an extension for “special expensing rules for certain film and television productions.” Congress first enacted production tax incentives favorable to the...

Looters attacked supermarkets in several Argentine cities Friday in the latest challenge to President Cristina Kirchner, who is struggling to revive a weak economy and maintain her control over the ruling Peronist Party. What started with the ouster Thursday afternoon of a supermarket in the Patagonian resort town of Bariloche quickly spread to other parts of the country, with thousands of looters attacking supermarkets and shops in the cities of Rosario, Campana and Zárate. In the central city Rosario, two people were killed during the incidents and 137 people arrested.

One of the most fascinating characteristics of government borrowing - whether at the local, state, or federal level - is that debts contracted over time are obligations tied to specific geographical boundaries but not to the citizens living there when those debts were incurred. For example, while it's customary to say that each of the 210,000 residents of Stockton, California, are on the hook for their share of the bankrupt municipality's estimated $700 million in unpaid bills, the day one of them picks up and moves, personal responsibility for that debt drops to zero.

Mary Katharine Ham wrote last week about the porkfest in the Senate bill authorizing emergency relief spending for Hurricane Sandy, but the Senate hasn’t gotten the message yet. David Francis reports on more aspects of the larded-up bill for The Fiscal Times, while noting that this has become business as usual on Capitol Hill — especially while the normal budgeting process has been derailed: The Sandy emergency spending package also contains provisions that had previously been rejected or had not yet been considered by Congress. This includes a measure that alters how the federal government manages areas prone to flooding,...

CHICAGO (Reuters) - Illinois' public pension funding problems, likely to persist if not worsen, led Moody's Investors Service on Thursday to revise the state's credit outlook to negative from stable, putting more pressure on state lawmakers to act. Illinois' finances are buckling under a $96.8 billion unfunded pension liability while Governor Pat Quinn and various state lawmakers are pushing to get various reform measures passed by the legislature in early January. But Moody's, which affirmed Illinois' A2 rating, said the passage of any reforms stands a good chance of being challenged in court on the basis of strong state constitutional...

Anyone who believes that the president’s proposed tax hikes on “the rich” will save our country from insolvency is grossly mistaken, and should begin to educate themselves by examining the graph below. Whoa: This isn’t the least bit surprising, of course. We’ve seen this coming for a very long time. Barring major cuts to entitlement spending the country will go bankrupt. It’s not a possibility -- it’s an absolute certainty. Which is why I find all the “negotiations” surrounding raising taxes on “the rich” so reprehensible. The revenue generated from such a proposal -- as the graph above demonstrates --...

To best understand this spending aspect of the current budget negotiations in Washington, we must answer one crucial question: how much taxation on the top income-earners would be required to fully fund the present level of government spending? To do so, we must first make the unreasonable assumption that the rich will not respond to confiscatory tax rates and hide money from being taxed. This is unreasonable because no scheme of taxation since WW2 has been able to capture more than 21% of GDP. With current spending levels around 23% of GDP, history suggests that no level of taxation we...

By FOX 2 News Staff DETROIT (WJBK) -- The city of Detroit faces a major financial crisis and one member of city council thinks President Barack Obama should step in and help. City Council member JoAnn Watson said Tuesday the citizens support of Obama in last month's election was enough reason for the president to bailout the struggling the city. (Click the video player to listen) "Our people in an overwhelming way supported the re-election of this president and there ought to be a quid pro quo and you ought to exercise leadership on that," said Watson. "Of course, not...

The incomparable Walter Russell Mead, writing in the American Interest, offered a glimpse into the coming dystopia: "Things are getting worse in San Bernardino. The city filed for bankruptcy earlier this year, but its financial situation has continued to deteriorate. And now with what promises to be a heated court battle over payments to the state pension fund in the offing, further cuts are likely. "Things are getting so bad that at a recent city council meeting, the city attorney advised residents to 'lock their doors and load their guns' because the city could no longer afford to keep up...

Detroit's fiscal clock is ticking down again as the city faces running out of money by the end of the year unless a political squabble between the mayor and city council can be resolved. Without a resolution, the state of Michigan will not release cash to keep the city running. Mayor Dave Bing, who contends that bankruptcy or bond defaults are not on the horizon, is prepared to put city workers on unpaid leave to keep the struggling local government operating. Credit rating agencies are warning that political and legal obstacles could derail plans to get Detroit back on solid...

City attorney of San Bernardino Jim Penman had the audacity to tell the truth to the residents of bankrupt San Bernardino at a recent city council meeting. Taking stock of the fact that San Bernardino’s murder rate has jumped 50 percent over the last year, that the city has been cutting its police force by about 80 officers, and that there is no good news in sight, Penman stated, “lock your doors and load your guns.” He stands by the statement today, explaining, “you should say what you mean and mean what you say.” Penman continued, “Let’s be honest, we...

(Reuters) - The Obama administration's opening bid on Thursday in negotiations to avert a year-end fiscal crunch included a demand for new stimulus spending and authority to unilaterally raise the U.S. borrowing ceiling, a Republican congressional aide said. The proposal, made by Treasury Secretary Timothy Geithner to congressional Republican leaders on Capitol Hill, was seen as offering little the Republicans could agree to and was greeted with laughter, the aide said. "We can't move any closer to them because they're not even on our planet," the aide said. "It was not a serious proposal."-snip-In the maiden bargaining session, Geithner, the...

A decade and a half ago, both of us served on President Clinton's Bipartisan Commission on Entitlement and Tax Reform, the forerunner to President Obama's recent National Commission on Fiscal Responsibility and Reform. In 1994 we predicted that, unless something was done to control runaway entitlement spending, Medicare and Social Security would eventually go bankrupt or confront severe benefit cuts. Eighteen years later, nothing has been done. Why? The usual reason is that entitlement reform is the third rail of American politics. That explanation presupposes voter demand for entitlements at any cost, even if it means bankrupting the nation. A...

To call Greece First World may be a stretch, but Greece has defaulted once already, and it is only a matter of time until Greece defaults again. Welcome to default-o-rama, the next chapter in the First World's struggle for fiscal sustainability. Japan is piling up debt in the manner of a nation beyond hope. France, Belgium, Spain and Italy are defaults waiting to happen unless Europe can somehow generate the kind of growth that has eluded it for decades. America's fiscal cliff is an artificial crisis. We have no trouble borrowing in the short term. But at some point the...

The city of Detroit, facing a serious cash crisis, is set to go bankrupt by the end of this year and would put city workers on furlough unless it strikes a deal with the city council that would bring in $30 million before Dec. 14. Detroit has been in financial turmoil for years, losing a quarter of its population in the past decade and facing a shrinking auto industry that has reduced tax revenues. The Detroit City Council gave the mayor the option to hire a financial advisor and in return receive $30 million by the end of the year....

Politics: Union intransigence and unrealistic expectations at Hostess Brands have forced the bakery to shut its doors permanently and throw 18,500 people out of work. So much for Big Labor caring about the little guy. A down economy and two restructurings in three years left Hostess, maker of Twinkies and Sno Balls, in dire fiscal straits. The company warned its workers, union and nonunion, to make concessions or everyone would go down in a liquidation. Instead, one union, the AFL-CIO-affiliated Bakery, Confectionery, Tobacco Workers and Grain Millers International (BCTGM), imagined the company was bluffing and went on strike.