Economy & Budget

No more deceit -- strictly regulate Wall Street

Recent stories about Wall Street contain a recurring theme: deceit. 

For example, this week the CEO of the late Lehman Brothers, Richard S. Fuld Jr., with a completely straight face swore to Congress that he’d been utterly out to lunch on the issue of “Repo 105,” a sleight-of-hand accounting procedure auditors found Lehman used to conceal its debts. 

Last week, the Securities and Exchange Commission filed a civil lawsuit charging Goldman Sachs with securities fraud and describing a scheme in which Goldman defrauded clients by selling them a mortgage investment to bet on after secretly permitting selection of its component securities by a hedge fund manager who Goldman knew planned to bet against it.  

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The Big Question: Will financial reform work?

Some of the nation's top political commentators, legislators and intellectuals offer insight into the biggest question burning up the blogosphere today.

Today's question:


Will financial reform legislation, if signed into law, prevent economic meltdowns like the one the nation faced in 2008?

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Tax day is here again (Rep. Steve King)

Tax day is often marked by many political events objecting to our nation's tax policies. This year will be no different, as tea party groups and advocates for tax reform will be out in full force across the country.

Americans are upset with Washington, and it is easy to see why. Government dependency and spending is up, while nearly half the households in America (47%) will pay no federal income taxes this year. Meanwhile, Gallup reported this week that 63 percent of Americans believe their taxes will increase in the next 12 months. Private sector jobs are increasingly difficult to obtain, and special interest groups control the agenda on Capitol Hill.

Many wrongly claim that only the "rich" are affected by high tax rates. In reality, the average American worker surrenders 27 percent of his earnings to federal, state and local governments, meaning the average American gives three months of his annual earnings to government.

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The Big Question: Should Republicans push a 'fair tax' ?

Some of the nation's top political commentators, legislators and intellectuals offer insight into the biggest question burning up the blogosphere today.

Today's question:

Should the Republican Party support the "fair tax"? Why or why not?


Some background reading here.

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Why a consumer financial protection agency will hurt consumers

Consider this: Your car breaks down and you don’t have enough money to fix it. You have no other way to get to work. What do you do?
 
Maybe you can’t imagine this scenario, because you have money in a savings account. Or, a credit card. Or, a family member or friend to help you. But, millions of Americans don’t have a financial safety net. They can’t get a credit card. They don’t have friends to turn to for a small loan. They don’t have family members ready to help them out of an unexpected situation.  
 
These are the people who will suffer most if Congress passes financial reform legislation that would create a massive, new federal government agency—the Consumer Financial Protection Agency (CFPA)—to regulate consumer financial products.  What consumers need is greater—not less—access to realistic and regulated financial options.
 

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Tax Day is here again (Rep. Paul Broun)

As Americans file their income taxes today, many are forced to face a painful reality.  The average income has decreased 3.2 percent, and business owners continue to reduce their payroll because they can’t afford to pay their employees and the federal government.  There is no doubt that our tax code is unfair, inefficient, and lacks provisions to promote real, economic growth.

In 1930, the U.S. tax code was a hefty 500 pages long.  Today, it is nine times the length of the King James Bible.  These 45,000 pages are full of provisions that all too often produce negative results.  It has also gradually created a system in which half of the population bears almost 100% of the federal tax load.

Unfortunately, this Congress has abused the power of the purse and continues to seize any new opportunity to tax and spend.  There is a better way.  Some states have provided a blueprint of which economic policies work and which do not.  States like Texas and Florida, which enjoy lower taxes and as a result, more incentives and opportunities for economic growth fare much better than others.  States like California, Michigan, and New York, which have large state governments and high taxes, are currently facing big unemployment numbers and even bigger debts.

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Immigration and your taxes (Rep. Lamar Smith)

President Obama and Congressional Democrats have been talking about giving amnesty to millions of illegal immigrants. Tax Day seems like a good time to examine the impact that such a policy would have on your wallet.

Start with education. Using the average annual American public school elementary and secondary education costs, the Federation for American Immigration Reform has estimated that the total cost of K-12 education for illegal immigrant minors and the U.S.-born children of illegal immigrants is $28.6 billion a year.

Then there’s health care. If illegal immigrants are covered in the health care bill (there is not a strong verification mechanism to ensure they won’t get benefits), it would increase the bill’s costs between $10-$30 billion. Of course, it won’t matter if illegal immigrants receive amnesty since the new law requires health care coverage for everyone.

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The 2007 solution (Sen. George LeMieux)

During my time in the Senate, I have seen what many other Americans have seen – our nation is on an unsustainable fiscal path.  Our national debt stands at over $12.8 trillion.  The Congressional Budget Office estimates the President’s budget proposal for 2011 will add nearly $10 trillion in additional debt over the next ten years.
 
Our problem is one of overspending, and we must find solutions to bring our budget into balance.  Across the country, states make tough decisions to balance their budgets every year, yet tough decisions are delayed year after year at the federal level.  While the federal government’s problem is daunting, we owe it to future generations to solve our debt problem so their quality of life is not diminished because of our inability to make hard choices.

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Sensibly limiting spending (Rep. Joe Pitts)

Speaking in Dallas this week, Federal Reserve Chairman Ben Bernanke gave a stern warning about the fiscal direction of our government: “Unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth.”

Bernanke further argues that a credible plan to reduce long-term deficits could help boost the economy. Stabilizing the federal budget would enhance investor’s confidence in the United States thereby reducing interest rates we pay on the national debt and attracting business investment.


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