Tuesday, March 16, 2010
Scandal-Hit Catholic Church Still Integral To Irish
by Rob Gifford
March 16, 2010 For 33-year-old Paul Dunbar, the child abuse scandals in Ireland's Roman Catholic Church were the final straw. Like many of his contemporaries, Dunbar was baptized as a child, but had slowly drifted away from the Catholic faith until he found himself a complete atheist by his late 20s.
Then came the publication last year of two government reports that detailed the systematic abuse of Irish children by monks, priests and nuns, and the cover-up by the church hierarchy.
Dunbar was moved to formally quit the church, a lengthy process known as "defection." And, says the graduate student from Cork, "it's not as easy as you might think."
So in order to help others who want to defect, Dunbar set up a Web site, Count Me Out, which outlines the steps needed to officially part from the church.
A poll commissioned earlier this year by the Irish Times found that 74 percent of people polled said the church had not responded adequately to the scandals revealed in last year's reports.
But the church is so deeply woven into the fabric of Irish life, it is difficult for many ordinary Irish people to distance themselves from it. The church is involved in education and health care, and its imprint on the Irish national identity is deep.
On census form, lots of people fill out Catholic as though it's an ethnic group, not a religious belief. It's almost like a blood type. We are trying to change that.
- Paul Dunbar, founder of a Web site to assist people who want to "defect" from the church
Eoin Smith, 33, an accountant, stopped practicing as a Catholic when he left high school. He is now a self-proclaimed atheist.
Like Dunbar, he feels strongly about the abuse within the church, and wanted to leave it. But his wife suggested that he not be too hasty. Their two-year-old son Oisin will in a few years reach school age.
Ninety-two percent of primary schools are still run by the Catholic Church and most of the best schools are Catholic.
"With a Catholic school they can turn you down if you're not Catholic, so my wife said let's keep up the pretense for a little longer," Smith says. "And then maybe we can slink into the school we want. And then we can think about officially leaving the church."
Smith says he and his wife are considering baptism for their son before he turns four to more easily obtain a place in school. Smith says he is not particularly proud that he has put off his defection, but he calls it a classic Irish compromise — "a little bit hypocritical to get the best result I want."
"Everyone is making the same kind of compromises, simply because that is the way Irish society is structured," Smith says.
A report last May ordered by the Irish government revealed that the Catholic church covered up almost four decades of sexual and physical abuse by priests and nuns against thousands of children in state care. Another report revealed that pedophile priests had engaged in sex abuse between 1975 and 2004 and several bishops had mismanaged victims' complaints.
The recent Irish Times poll showed that 61 percent of respondents said the church should give up its control of the school system.
But if public sentiment against the church is growing, Dunbar says apathy prevents disaffected Catholics from officially leaving the church. Their continuing presence on the rolls inflates the church's membership. In helping others to defect, Dunbar says he hopes that will diminish the church's influence on the state.
It's a very difficult time to be a committed Roman Catholic in Ireland.
- Breda O'Brien, a church school educator and newspaper columnist
"On census forms, lots of people fill out 'Catholic' as though it's an ethnic group, not a religious belief. It's almost like a blood type," he says. "We are trying to change that. We are trying to say you can still be spiritual, hold Christian values, but unless you formally defect, you are still officially part of the church."
As for the faithful within the Catholic church, it has been a hard year.
"It's a very difficult time to be a committed Roman Catholic in Ireland," says Breda O'Brien, who teaches religious education at a Roman Catholic school in central Dublin, and also writes a column for The Irish Times on religion.
"There has been scandal after scandal, compounded by mismanagement within the church," O'Brien says. "The church has not covered itself in glory."
But O'Brien insists that people should not disregard the spiritual aspects of the church because of the misdeeds of its clerics.
"No one can deny the problems the church has had, but that does not make everything the church does wrong," she says.
She recalls how one critic recently called her an apologist for child abuse when she tried to point to the good work the church still does in society.
O'Brien supports more separation between the church and Irish society. There are more secular schools being set up, and the church has said it is committed to withdrawing slowly from the education system if that is what people want.
She says the transition period will be difficult as Irish society tries to work out the new balance between the religious and the secular. And she fears in many ways that consumerism and materialism has replaced Catholicism as the credo of the new Irish society.
O'Brien says the days are long gone of children accepting something because a teacher says it is so.
"I find the idea of brainwashing teenagers hilarious. If you want to try it I would just wish you lots and lots of luck," says O'Brien. "The only successful indoctrinators in the world today are the marketers, the ones who make young children insecure about how they look or weigh or the brands they buy. They are the successful indoctrinators now, not the churches."
Lehman Brothers' 'Repo 105' Accounting Scandal
Accounting Gimmicks or Outright Fraud?
By Adam Sharp
Nearly 18 months after the collapse of Lehman Brothers, it looks like we might finally get some answers.
The long-awaited bankruptcy examiner's report came out Friday — and it's a whopper — clocking in at 2200 pages. The examiner looked at 10 million e-mails and 20 million documents in the case.
The financial world is still digesting the report, but the first scandal is already emerging. The biggest revelation so far is that Lehman was cooking their books since at least 2007. In the final quarter before filing bankruptcy, accounting tricks boosted their balance sheet by $50 billion.
Let's Get Some Lipstick on This Pig
Insiders called the scheme a "Repo 105." And let me tell ya, Lehman took a page straight out of Enron's playbook with this one.
Here's how it worked: Lehman entered into repurchase agreements with banks in the Cayman Islands. Under the deal, Lehman would "sell" toxic assets to the other bank — with the understanding that they would buy them back in a short time.
The trick made Lehman Brothers look much healthier — on paper, at least. These guys were desperate to fool investors and credit rating agencies. They had screwed up on a truly collosal scale, and lined their pockets all the while.
If (or when) the truth got out, executives knew their careers and reputations would be at stake. But by engaging in this kind of book-cooking to cover it up, they could end up behind bars.
Banks use similar repo agreements all the time. But they mark them on the books as loans, because that's what they are. Lehman marked them as sales. That might not sound like a huge deal, but the effect was that Lehman had $50b more in cash on its books, and $50b less in toxic mortgage assets.
This is complicated stuff, and that's not a mistake. Scams like this are complex by design. The goal is to confuse the mark. In this case, we were all the mark.
If you want a more in-depth explanation of how the scheme worked, here's Dylan Rattigan of MSNBC:
Accounting "Gimmicks," or Just Plain Fraud?
The examiner's report tip-toes around the f-word (fraud) using very careful language. Not one mention of fraud in sight. They refer to "gross negligence," but that's not necessarily a crime. And media outlets are reporting on Lehman's accounting "gimmicks," "tricks," or — my favorite — "shenanigans."
Let me get this straight: Lehman intentionally manipulated their accounting with the goal of deceiving investors, rating agencies, and possibly their regulators, leading to the largest corporate bankruptcy in U.S. history... And that's only considered "negligence"?
Being negligent means you lack concern or aren't paying attention when you should be. It doesn't mean willfully lying on your financial statements. What Lehman did sounds a whole lot more fraudulent than negligent. And this type of blatant manipulation is being referred to as a gimmick? Ridiculous.
The Repo 105 scandal is just getting started, but already the accusations are flying. Dick Fuld, former CEO, is denying knowledge of the Repo 105 transactions. Not true, according to COO Bart Mcdade. When interviewed by the bankruptcy examiner, Mcdade said, "Fuld knew about the accounting of Repo 105."
I'll be surprised if anyone actually goes to jail, but we should get much more information in the coming months. Expect a whole lot of "I do not recall having that conversations" when these guys are hauled up on Capitol Hill this time.
One of the biggest questions is this: Were any other banks using similar tricks? And are they still cooking the books today?
We don't know yet, but it wouldn't surprise me one bit. These investment banks were notorious for stealing each other's ideas. And the fact that it all took place under Tim Geithner's nose — when he was president of the NY Fed — is also something that needs to be explored.
A Great Call
Our own Ian Cooper alerted Wealth Daily readers about a possible Lehman bankruptcy back in June 2008, when the stock was still trading around $30. He warned, "It's only a matter of time before Lehman (LEH) joins the latest list of casualties." He recommended buying October $25 puts. It proved to be quite a profitable call, banking profits of 180% gains in just over a month. Readers who held onto the puts made significantly more.
Just recently Ian uncovered another opportunity, and this time it's in the foreclosure market. You can read all about it and his service, Options Trading Pit, here.
By Adam Sharp
Nearly 18 months after the collapse of Lehman Brothers, it looks like we might finally get some answers.
The long-awaited bankruptcy examiner's report came out Friday — and it's a whopper — clocking in at 2200 pages. The examiner looked at 10 million e-mails and 20 million documents in the case.
The financial world is still digesting the report, but the first scandal is already emerging. The biggest revelation so far is that Lehman was cooking their books since at least 2007. In the final quarter before filing bankruptcy, accounting tricks boosted their balance sheet by $50 billion.
Let's Get Some Lipstick on This Pig
Insiders called the scheme a "Repo 105." And let me tell ya, Lehman took a page straight out of Enron's playbook with this one.
Here's how it worked: Lehman entered into repurchase agreements with banks in the Cayman Islands. Under the deal, Lehman would "sell" toxic assets to the other bank — with the understanding that they would buy them back in a short time.
The trick made Lehman Brothers look much healthier — on paper, at least. These guys were desperate to fool investors and credit rating agencies. They had screwed up on a truly collosal scale, and lined their pockets all the while.
If (or when) the truth got out, executives knew their careers and reputations would be at stake. But by engaging in this kind of book-cooking to cover it up, they could end up behind bars.
Banks use similar repo agreements all the time. But they mark them on the books as loans, because that's what they are. Lehman marked them as sales. That might not sound like a huge deal, but the effect was that Lehman had $50b more in cash on its books, and $50b less in toxic mortgage assets.
This is complicated stuff, and that's not a mistake. Scams like this are complex by design. The goal is to confuse the mark. In this case, we were all the mark.
If you want a more in-depth explanation of how the scheme worked, here's Dylan Rattigan of MSNBC:
Accounting "Gimmicks," or Just Plain Fraud?
The examiner's report tip-toes around the f-word (fraud) using very careful language. Not one mention of fraud in sight. They refer to "gross negligence," but that's not necessarily a crime. And media outlets are reporting on Lehman's accounting "gimmicks," "tricks," or — my favorite — "shenanigans."
Let me get this straight: Lehman intentionally manipulated their accounting with the goal of deceiving investors, rating agencies, and possibly their regulators, leading to the largest corporate bankruptcy in U.S. history... And that's only considered "negligence"?
Being negligent means you lack concern or aren't paying attention when you should be. It doesn't mean willfully lying on your financial statements. What Lehman did sounds a whole lot more fraudulent than negligent. And this type of blatant manipulation is being referred to as a gimmick? Ridiculous.
The Repo 105 scandal is just getting started, but already the accusations are flying. Dick Fuld, former CEO, is denying knowledge of the Repo 105 transactions. Not true, according to COO Bart Mcdade. When interviewed by the bankruptcy examiner, Mcdade said, "Fuld knew about the accounting of Repo 105."
I'll be surprised if anyone actually goes to jail, but we should get much more information in the coming months. Expect a whole lot of "I do not recall having that conversations" when these guys are hauled up on Capitol Hill this time.
One of the biggest questions is this: Were any other banks using similar tricks? And are they still cooking the books today?
We don't know yet, but it wouldn't surprise me one bit. These investment banks were notorious for stealing each other's ideas. And the fact that it all took place under Tim Geithner's nose — when he was president of the NY Fed — is also something that needs to be explored.
A Great Call
Our own Ian Cooper alerted Wealth Daily readers about a possible Lehman bankruptcy back in June 2008, when the stock was still trading around $30. He warned, "It's only a matter of time before Lehman (LEH) joins the latest list of casualties." He recommended buying October $25 puts. It proved to be quite a profitable call, banking profits of 180% gains in just over a month. Readers who held onto the puts made significantly more.
Just recently Ian uncovered another opportunity, and this time it's in the foreclosure market. You can read all about it and his service, Options Trading Pit, here.
NJ Woman Actually Wants to Be the Fattest in the World
Believe it or not, there are women out there who would love to gain weight, instead of losing it. And I’m not talking about some anorexic chic, who needs to gain weight, but about a woman who already wears XXXXXXXL clothes.
42-year-old Donna Simpsonweighs 600 lbs, but she’s working hard to put on even more weight, and reach her goal of 1,000 lbs, as soon as possible. It’s not exactly the most craved title in the world, but Donna actually wants to be the fattest woman in the world. Unfortunately, it’s not as easy as you might think, especially since she’s constantly burning precious calories, by “running” after her 3-year-old daughter.
Donna has already been acknowledged as the world’s fattest mother, by Guinness, after going through a dangerous C-section operation. Now, the overweight New Jersey resident is eating monstrous quantities of fast-food and sweets, in her quest to get a heart-attack become the fattest woman on the planet.
Her 150 lbs-heavy husband is behind her 100%. Not literally, of course, but the man is a confessed fat lover, so he supports his wife in any way he can. Donna even says she feels he’d want her to be even fatter.
Eating through an average 12,000 calories per day, when the average woman only eats 2,000, can’t be cheap, so Donna came up with an ingenious way of sustaining her effort. She started a website where men pay to see her eat fast-food…
All I can say is…good luck, Donna? Did I mention she can’t move for more than 20 feet, without a mobility scooter?
42-year-old Donna Simpsonweighs 600 lbs, but she’s working hard to put on even more weight, and reach her goal of 1,000 lbs, as soon as possible. It’s not exactly the most craved title in the world, but Donna actually wants to be the fattest woman in the world. Unfortunately, it’s not as easy as you might think, especially since she’s constantly burning precious calories, by “running” after her 3-year-old daughter.
Donna has already been acknowledged as the world’s fattest mother, by Guinness, after going through a dangerous C-section operation. Now, the overweight New Jersey resident is eating monstrous quantities of fast-food and sweets, in her quest to get a heart-attack become the fattest woman on the planet.
Her 150 lbs-heavy husband is behind her 100%. Not literally, of course, but the man is a confessed fat lover, so he supports his wife in any way he can. Donna even says she feels he’d want her to be even fatter.
Eating through an average 12,000 calories per day, when the average woman only eats 2,000, can’t be cheap, so Donna came up with an ingenious way of sustaining her effort. She started a website where men pay to see her eat fast-food…
All I can say is…good luck, Donna? Did I mention she can’t move for more than 20 feet, without a mobility scooter?
Paula Abdul to Join ‘Star Search’?
Paula Abdul is in talks to make her TV comeback, headlining a rebooted version of the original televised singing competition — Star Search.
Paula’s role is still being defined but according to EW.com’s Michael Ausiello she will be doing a combination of hosting and judging.
ABC have been wooing Paula since last summer when she officially announced her departure from American Idol. There was talk of her joining Dancing With the Stars in some capacity, but a deal never emerged.
Will the Star Search gig prevent Paula from working with her old friend Simon Cowell as a judge on the forthcoming US version of the X Factor, which is slated to debut on Fox in the fall of 2011?
OK! NEWS: SIMON COWELL TYING THE KNOT IN “THE NEXT TEN YEARS”
Star Search, which premiered in 1983 with host Ed McMahon was brought back in 2003 by CBS with Arsenio Hall in an attempt to capitalize on the massive popularity of the then-new American Idol. The revival was axed in 2004.
Ryan Howard for Albert Pujols? It May or May Not Have Been “Kicked Around,” Depending Who You Believe
Albert Pujols for Ryan Howard?: “It’s not fully clear whether the Phillies actually have approached the Cardinals with the idea, and even if St. Louis were to seriously consider such an offer, executives with the Cardinals would have to swallow very hard before dealing Pujols, a player widely regarded as the best in the sport.” Philly GM Ruben Amaro called Buster Olney’s report a “lie.” Buzz Bissinger, a St. Louis Cardinals shill fan, called it “fiction.” Can anyone come up with one reason why the Cardinals would entertain this? [ESPN]
Lady Gaga > Beyonce in Telephone video
Will Lady Gaga and Beyonce kiss on screen?
Fresh off the release of their “Telephone” mini movie, everyone is wondering how will Lady Gaga and Beyonce continue this “working relationship” of theirs. Will Gaga turn Beyonce out?
All for entertainment purposes of course and even bigger super stardom. I see the kiss (tongue included) happening on an awards show but maybe that’s too cliche, whenever it happens it has to be HUGE. Not the same Beyonce you remember singing church songs huh, yeah, I didn’t think so.
While most people said the video was horrible, I enjoyed it. Especially Gaga’s part about needing a few more shots of Henny — I think I could like this girl!
While it was sexually suggestive and I worry that some poor little white / black girl combo may try and re-create this moment and poison their lunch room or something stupid like that in Middle America, I still enjoyed it.
I never thought the day would come where Bey would be out-shined by Gaga but Gaga’s acting performance was far more superior than Beyonce’s. It almost made you wonder who’s the superstar again, who’s made big bucks at the box office. HMMM. Gaga might have a career in acting, I can definitely see her in the re-make of “The Crying Game”.
Gaga had that tough girl from the 50’s down pact. Cigarette shades, beer can rollers – the Pu**y wagon. The video gets a disturbed thumbs up for me. Keep drinking that Henny Gaga!
Will Lady Gaga and Beyonce kiss on screen?
Fresh off the release of their “Telephone” mini movie, everyone is wondering how will Lady Gaga and Beyonce continue this “working relationship” of theirs. Will Gaga turn Beyonce out?
All for entertainment purposes of course and even bigger super stardom. I see the kiss (tongue included) happening on an awards show but maybe that’s too cliche, whenever it happens it has to be HUGE. Not the same Beyonce you remember singing church songs huh, yeah, I didn’t think so.
While most people said the video was horrible, I enjoyed it. Especially Gaga’s part about needing a few more shots of Henny — I think I could like this girl!
While it was sexually suggestive and I worry that some poor little white / black girl combo may try and re-create this moment and poison their lunch room or something stupid like that in Middle America, I still enjoyed it.
I never thought the day would come where Bey would be out-shined by Gaga but Gaga’s acting performance was far more superior than Beyonce’s. It almost made you wonder who’s the superstar again, who’s made big bucks at the box office. HMMM. Gaga might have a career in acting, I can definitely see her in the re-make of “The Crying Game”.
Gaga had that tough girl from the 50’s down pact. Cigarette shades, beer can rollers – the Pu**y wagon. The video gets a disturbed thumbs up for me. Keep drinking that Henny Gaga!
Clinton seeks 'full commitment' to Mideast peace talks
WASHINGTON — US Secretary of State Hillary Clinton said Tuesday the United States seeks to ensure the "full commitment" of both Israel and the Palestinians toward reviving peace talks.
Clinton also told reporters "I don't buy that" when asked whether she thought US-Israeli ties had hit a 35-year low since Israel announced last week that it would build new homes in east Jerusalem -- a move that has threatened US-brokered indirect talks.
"We are committed to the resumption of negotiations between the parties," Clinton said during a press conference with Irish Foreign Minister Micheal Martin.
"We think that (envoy) George Mitchell's legendary patience will win the day as the process gets started again because there is just too much at stake for both the Palestinians and Israelis," the chief US diplomat said.
"But our goal now is to make sure that we have the full commitment from both our Israeli and the Palestinian partners to this effort," she said.
A US official told AFP in Jerusalem that Mitchell, who had been scheduled to return to the region to advance newly-agreed indirect talks, postponed a visit to Israel on Tuesday, as the row between the two close allies continues.
Martin, who visited the Middle East recently, said Ireland supports the initiative on the indirect negotiations as "the correct pathway."
He added: "We do believe that the proximity talks should commence as quickly as possible."
Israel's March 9 green light for the new construction in east Jerusalem's Ramat Shlomo raised doubts over the outlook for indirect peace talks the Palestinians had reluctantly agreed to hold with Israel just days earlier.
The announcement also came during a visit to Israel by US Vice President Joe Biden, dealing a heavy blow to months of US-led efforts to relaunch talks between Israel and the Palestinians.
Direct negotiations collapsed after Israel launched a devastating 22-day military offensive against the Islamist Hamas-run Gaza Strip aimed at halting Palestinian rocket fire.
Woods to return to golf at the Masters
PALM HARBOR, Fla. — Tiger Woods said Tuesday he will return to golf next month at the Masters, ending a four-month hiatus brought on by a sex scandal that shattered his image as the gold standard in sports.
"The Masters is where I won my first major and I view this tournament with great respect," Woods said in a statement. "After a long and necessary time away from the game, I feel like I'm ready to start my season at Augusta."
The Masters begins April 8.
The Associated Press first reported his plans to return at Augusta National last Thursday.
Woods has not competed since Nov. 15 when he won the Australian Masters for his 82nd victory worldwide. Twelve days later, he crashed his car into a tree outside his Florida home, setting off shocking revelations that he had been cheating on his wife.
"The major championships have always been a special focus in my career and, as a professional, I think Augusta is where I need to be, even though it's been a while since I last played," Woods said.
"I have undergone almost two months of inpatient therapy and I am continuing my treatment," he said. "Although I'm returning to competition, I still have a lot of work to do in my personal life."
There had been reports he would play the Tavistock Cup exhibition next week in Orlando, followed by the Arnold Palmer Invitational at Bay Hill, where he is the defending champion and a six-time winner.
Read More....
The Human Costs of Big Government
By David Bozeman
President Obama recently informed a crowd of young people — to thunderous applause — that under his health care plan, they could stay on their parents’ coverage till age 26. Voters 18-21, of course, went for Obama by a 2-1 margin, but given that he is a ‘post-partisan’ president, we can’t chalk that up to politics, now can we?
Obama-care proponents contend that his proposal is only an option and not a mandate (though a handful of states have enacted mandates). But then so are junk food and cigarettes, and no one hesitates to address their dangers. Under our Constitution, whether or not parents choose to provide coverage for their grown children is not the concern of President Obama. As columnist Mark Steyn has noted, however, the details of Obama-care pale in importance next to the overall concept of nationalizing yet more of our private lives. Forget the minutiae for a moment and consider our culture.
Public debate almost always concerns the practicalities and economics of Nanny-state activism. Seldom considered is that the human toll of engendering dependency can be measured in fatherless households, lack of initiative and prolonged adolescence.
Numerous sociological factors can probably explain why fifty years ago a 26 year-old was an adult, long independent, with a stable job and an intact family, whereas today, 26 is practically late childhood. Still, policies that keep young people dependent on their parents (via the government) do not instill self-discipline or allow the confidence and self-satisfaction derived from taking care of yourself for the first time. The Great Society and the welfare-state must bear some of the blame. Diana West, in The Death of the Grown-up (2007) details how Italy’s highest court ordered the estranged father of a thirty year-old to pay his son roughly $1000 a month until he found a job that “fit his aspirations.” The son had a law degree, but the court ruled that a parent’s duty of maintenance did not end with adulthood. According to West, to no great surprise, more than a third of Italians over thirty still live at home with their parents. Still, such an outrage could never happen here.
Or could it? The drip-drip accumulation of big-government policies nullifies our better natures. And political correctness and radical feminism have wussified many American males.
Get full story here.
Appointment Watch: Aponte
The mainstream media continue to ignore President Obama’s appointment of bizarre personnel to run the government. Personnel is policy. That being the case the American people need to know about these appointments. This week we look another Obama appointee. This is not an isolated incident or an occasional bad apple. This appointment is representative of the appointments he is making with little or no push back from the Senate during the confirmation process.
Mari Del Carmen Aponte, Ambassador to El Salvador
• Aponte has disturbing ties to a Cuban spy.
• Aponte was previously rejected for another Ambassadorship because of these ties.
• Aponte seems to have a reverse midas touch having served in several corrupt or defunct enterprises.
• Aponte’s nomination is currently pending before the Senate Foreign Relations Committee. A hearing on her nomination is scheduled for March 17.
This is just a sample of the type of people President Obama is placing in positions of power within his Administration. If you want more information please visit: http://www.getliberty.org/content.asp?pl=187&contentid=187.
Next week we will examine one more. Those who are interested in exclusive information before it reaches the public, please contact Don@getliberty.org.
Mari Del Carmen Aponte, Ambassador to El Salvador
• Aponte has disturbing ties to a Cuban spy.
• Aponte was previously rejected for another Ambassadorship because of these ties.
• Aponte seems to have a reverse midas touch having served in several corrupt or defunct enterprises.
• Aponte’s nomination is currently pending before the Senate Foreign Relations Committee. A hearing on her nomination is scheduled for March 17.
This is just a sample of the type of people President Obama is placing in positions of power within his Administration. If you want more information please visit: http://www.getliberty.org/content.asp?pl=187&contentid=187.
Next week we will examine one more. Those who are interested in exclusive information before it reaches the public, please contact Don@getliberty.org.
Moody’s Warns U.S. Sinking into Financial Abyss
Moody’s Warns U.S. Sinking into Financial Abyss
By Bill Wilson
“A national debt, if it is not excessive, will be to us a national blessing.”—Alexander Hamilton.
Not even Alexander Hamilton would support today’s national debt.
When the nation’s system of perpetual, permanent debt was enacted, it provided, according to American Public University’s History Central, “that the debt be funded by reissuing bonds to be paid back in full after 15 or 20 years. Thus, rather than eliminating the debt, Hamilton's plan created a large, permanent public debt, issuing new bonds as old ones were paid off. Congress approved this proposal.”
More or less, that’s the system that still exists today. Paying off the principal on the national debt is done almost entirely by the issuance of new Treasury bonds. And, per Hamilton, “if it is not excessive,” can be indispensable — in times of war, for example.
For now, the nation is able to sell new bonds to pay off the old. Since the national debt has grown every single year since 1958, however, that means annually, for more than 50 years, more bonds have been sold than have been paid back. This has thus resulted in a net increase of the debt every year, even when Congress supposedly “balanced” the budgets in 1969 in and in 1998.
Interest servicing the debt, on the other hand, comes out of revenue. This is where it gets interesting — and downright scary.
The U.S. is about to max out its credit card while barely keeping up with its minimum payments servicing the nation’s gargantuan $12.4 trillion mountain of debt. Yesterday, Moody’s Investors Service again warned the U.S. that it is “substantially” closer to having its credit downgraded.
As reported by Fortune’s Chris Barr, “interest payments on general government debt -- combining the federal government with the states -- could rise above 10% of revenue by 2013... That's the level at which the rating agency typically considers a downgrade. Moody's said debt affordability is the key factor to consider in ratings decisions, because debt costs are apt to constrain policymakers…”
This is a critical point. Why?
Get full story here.
NJ court OKs tea party group's bid to oust senator
TRENTON, N.J. — A New Jersey appeals court is allowing a conservative tea party group to proceed with an effort to throw a Democratic U.S. senator out of office.
The three-judge panel Tuesday ordered the secretary of state to accept the group's petition seeking to recall Sen. Robert Menendez. That allows the tea party activists to begin collecting the 1.3 million voter signatures they need to get a recall on the ballot.
The court set aside the larger question of whether voters have a constitutional right to recall a federal lawmaker.
New Jersey is among 18 states that allow recalls of statewide elected officials. There is no right to recall congressmen and senators under the U.S. Constitution.
The court says it would take up that question if the petition drive succeeds.
The three-judge panel Tuesday ordered the secretary of state to accept the group's petition seeking to recall Sen. Robert Menendez. That allows the tea party activists to begin collecting the 1.3 million voter signatures they need to get a recall on the ballot.
The court set aside the larger question of whether voters have a constitutional right to recall a federal lawmaker.
New Jersey is among 18 states that allow recalls of statewide elected officials. There is no right to recall congressmen and senators under the U.S. Constitution.
The court says it would take up that question if the petition drive succeeds.
Michael Jackson estate agrees record Sony music deal
The estate of Michael Jackson has agreed the biggest recording deal in history, worth more than $200m, with Sony Music, US reports say.
The deal reportedly involves 10 album projects over seven years - including one of previously unreleased material.
The singer died at his Los Angeles home in June, aged 50. He was due to stage a series of comeback concerts in Britain.
Michael Jackson's death was ruled as homicide, mainly caused by the use of the anaesthetic Propofol.
Massive debts
The contract with Sony could be worth up to $250m if certain conditions are met, the Wall Street Journal reported on Monday, citing sources close to the deal.
It reflects sales of Jackson's music and memorabilia - which have sky-rocketed in the months since his death, making the late star one of the biggest-earning acts of last year, says the BBC's Rajesh Mirchandani in Los Angeles.
Sony has sold about 31 million copies of Jackson's albums worldwide since his death on 25 June, the report said.
His estate may soon be able to pay off some of the huge debts he left behind, our correspondent adds.
According to US media, Jackson also left behind dozens of new songs, which may be released, along with revamped packages of old hits.
More details are expected in an official announcement later on Tuesday, but the contract is reported to include the soundtrack to the recent film, This Is It.
The footage showed Jackson rehearsing for his comeback tour just days before his death from an overdose of an anaesthetic.
His doctor, Conrad Murray, who told police he had prescribed Propofol for insomnia, has pleaded not guilty to a charge of manslaughter.
He has always maintained that he neither prescribed nor administered anything that should have killed the singer.
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