I was in a nationwide retailer last night with a friend of mine who was in the market to purchase a new mattress. The sales clerk informed him that he could take advantage of their twelve-month no interest, no payments financing. She commented that they were discontinuing this program shortly because Congress, in their infinite wisdom, had passed credit card reform this past year outlawing these types of lines of credit.
This seemed simultaneously strange and infuriating to me. I've made quite a few purchases using such payment programs; typically I keep my money in an interest-bearing account and make sure to pay the entire balance of the credit card off before the twelve-month period lapses. I find that it's a good way to make your money work for you. Could what she was saying really be true?
The White House website has a press release detailing the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009. Sure enough, what this sales clerk had told me was in fact accurate. This new law bans retroactive rate increases. The way that these twelve-month no interest, no payments financing programs work is that if you do not pay off the balance in full by the end of the twelve-month period, finance charges are assessed from the date of purchase.
Another fun and unintended consequence of this legislation is the advent of the 79.9% interest rate credit card that targets consumers with poor credit histories that would not normally qualify for a credit card. This article from the AP explains:
The bloated APR is how First Premier Bank, a subprime credit card issuer, is skirting new regulations intended to curb abusive practices in the industry. It's a strategy other subprime card issuers could start adopting to get around the new rules.
The article continues:
In a mailing sent to prospective customers in October with the revamped terms, First Premier writes "...you might have less-than-perfect credit and we're OK with that." The letter notes that an online application or phone call is still required, but guarantees a 60-second status confirmation.
The letter also states there are no hidden fees that aren't disclosed in the attached form. That's where the 79.9 percent interest rate and $75 annual fee are listed. There's also $29 penalty if you pay late or go over your $300 credit limit.
Good luck ever paying your balance on that credit card off! Many thanks to the do-gooders in Washington, D.C., for once again saving us from ourselves.
Saturday, December 19, 2009
Thursday, December 17, 2009
Obama Warns US Will Go "Bankrupt" Without Health Care Bill
Once again, the President is resorting to fear mongering to ram through yet another horrendous piece of legislation. According to President Obama, the federal government will go bankrupt if Congress does not pass the health care bill.
I guess the President has already forgotten about the $700 Billion spent on bailing out the banks, the $787 Billion in economic stimulus, the $410 Billion omnibus spending bill, the $1 Million per troop price tag for the 30,000 troop Afghan "surge," and the $1.1 Trillion spending bill that doesn't even cover defense spending.
Add to that $200 or so Billion just to service the national debt this year, $100 Billion in annual proposed spending to combat "climate change," and a new $2.5 Trillion health care "reform" bill...and let's not forget about the $100 Trillion in unfunded liabilities already on the books...
Go bankrupt? Sounds like we're already there!
I guess the President has already forgotten about the $700 Billion spent on bailing out the banks, the $787 Billion in economic stimulus, the $410 Billion omnibus spending bill, the $1 Million per troop price tag for the 30,000 troop Afghan "surge," and the $1.1 Trillion spending bill that doesn't even cover defense spending.
Add to that $200 or so Billion just to service the national debt this year, $100 Billion in annual proposed spending to combat "climate change," and a new $2.5 Trillion health care "reform" bill...and let's not forget about the $100 Trillion in unfunded liabilities already on the books...
Go bankrupt? Sounds like we're already there!
Monday, December 14, 2009
More on the Cap and Trade Scam
The AP is reporting today that developing nations, led by China and India, are blocking UN climate talks while demanding that rich countries discuss much deeper cuts in their greenhouse gas emissions. This is curious given that China and India rank number one and number four, respectively, in the list of top world polluters. Furthermore, according to Time the top four most polluted places in the world are cities in China and India.
This is an old trick that common street pickpockets use; first they create a diversion and then they make off with your wallet before you even realize that it's gone. As I've stated previously, cap and trade does nothing to address the issue of pollution; it simply grants permits to pollute and blocks the poorest nations of the world from having the opportunity to step out of the stone ages via industrialization. Cap and trade levies a tremendous tax on us all and the end result is massive profits for multi-national corporations while keeping the impoverished poor and dependent on the government dole.
This is an old trick that common street pickpockets use; first they create a diversion and then they make off with your wallet before you even realize that it's gone. As I've stated previously, cap and trade does nothing to address the issue of pollution; it simply grants permits to pollute and blocks the poorest nations of the world from having the opportunity to step out of the stone ages via industrialization. Cap and trade levies a tremendous tax on us all and the end result is massive profits for multi-national corporations while keeping the impoverished poor and dependent on the government dole.
Wednesday, December 9, 2009
Senate to drop public option?
The AP is reporting that the "public option" is now out of the Senate version of health care reform. So what exactly are we getting for $1 Trillion?
Officials said it included nonprofit national health plans administered by the Office of Personnel Management, which runs the popular federal employees' health plan, as well as opening Medicare to uninsured Americans beginning at age 55, effective in 2011.
The article continues:
The Senate is in its second week of debate on the 10-year, nearly $1 trillion legislation that would dramatically remake the U.S. health care system and extend coverage to millions of the uninsured, with a new requirement for nearly everyone to purchase insurance. New purchasing marketplaces called exchanges would make it easier for small businesses and people without government or employer coverage to shop for health insurance, and onerous insurance company practices such as denying coverage to people with pre-existing medical conditions would be banned.
The deal reached Tuesday puts even more requirements on insurers by requiring that 90 percent of premium dollars be spent on medical benefits, as opposed to administrative costs, officials said. The officials who described the details of the closed-door negotiations did so on condition of anonymity, saying they were not authorized to discuss them publicly.
Is it unthinkable that insurers may simply raise the cost of insurance premiums in order to guarantee that they hit the 90% mark set by this legislation? Would health care providers, aware of this new mandate and the theoretically increased supply of available health care dollars, decide to charge higher rates for services thus resulting in higher costs for everyone? What about the potential for additional multi-billion dollar annual losses due to cost-shifting and fraud that will inevitably occur by adding millions to the medicare rolls?
By requiring everyone to purchase an insurance policy, young and otherwise healthy individuals that normally may not choose to purchase insurance in essence will be subsidizing the care of older and chronically ill individuals as these are typically the people that are most expensive to insure/would be denied coverage. So basically we've ensured a ton of new business for the insurance companies but done nothing to actually curb the cost of health care. Sounds like a great deal for the American public.
Apparently this session of Congress is willing to do pretty much anything just so they can say that they passed health care "reform." Perhaps instead they should consider market-based solutions, deregulation of health care markets, and allowing for the sale of insurance policies across state lines in order to curb skyrocketing health care costs.
Officials said it included nonprofit national health plans administered by the Office of Personnel Management, which runs the popular federal employees' health plan, as well as opening Medicare to uninsured Americans beginning at age 55, effective in 2011.
The article continues:
The Senate is in its second week of debate on the 10-year, nearly $1 trillion legislation that would dramatically remake the U.S. health care system and extend coverage to millions of the uninsured, with a new requirement for nearly everyone to purchase insurance. New purchasing marketplaces called exchanges would make it easier for small businesses and people without government or employer coverage to shop for health insurance, and onerous insurance company practices such as denying coverage to people with pre-existing medical conditions would be banned.
The deal reached Tuesday puts even more requirements on insurers by requiring that 90 percent of premium dollars be spent on medical benefits, as opposed to administrative costs, officials said. The officials who described the details of the closed-door negotiations did so on condition of anonymity, saying they were not authorized to discuss them publicly.
Is it unthinkable that insurers may simply raise the cost of insurance premiums in order to guarantee that they hit the 90% mark set by this legislation? Would health care providers, aware of this new mandate and the theoretically increased supply of available health care dollars, decide to charge higher rates for services thus resulting in higher costs for everyone? What about the potential for additional multi-billion dollar annual losses due to cost-shifting and fraud that will inevitably occur by adding millions to the medicare rolls?
By requiring everyone to purchase an insurance policy, young and otherwise healthy individuals that normally may not choose to purchase insurance in essence will be subsidizing the care of older and chronically ill individuals as these are typically the people that are most expensive to insure/would be denied coverage. So basically we've ensured a ton of new business for the insurance companies but done nothing to actually curb the cost of health care. Sounds like a great deal for the American public.
Apparently this session of Congress is willing to do pretty much anything just so they can say that they passed health care "reform." Perhaps instead they should consider market-based solutions, deregulation of health care markets, and allowing for the sale of insurance policies across state lines in order to curb skyrocketing health care costs.
Tuesday, December 8, 2009
Obama plans to "spend our way" out of downturn
Let's try a quick thought exercise. Imagine that you earn about $32,000/year at your job (that's the 2008 median salary here in the US). Now imagine that you've somehow managed to get approved for a mortgage on a house worth about $320,000. For simplicity, let's pretend you got one of those fancy no money down mortgages. Suddenly your employer cuts back your hours; you still have a mortgage payment to make but you no longer have the income on which you've come to rely. Imagine the bank's response if you told them "Don't worry about it, I'm going to spend my way out of this."
This is essentially what President Obama said today in front of the Brookings Institution in Washington, DC, in spite of the fact that our federal government finds itself in the very predicament outlined above.
Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.
Government stimulus NEVER works. By any sane metric, the most recent round of stimulus has been a colossal failure with a true unemployment rate presently floating around 17%. Huge public works projects did not work in the 30's and there is no reason to believe that this time around would be any different. The reason is quite simple; public works projects are kind of like summer jobs but worse. Once the project is completed everyone is once again out of work with long-term prospects that are no better than they were before the government came to the rescue. To further compound the problem, resources must be taken away from the productive segment of the economy (i.e. the private sector) to pay for this government largess.
Common sense tells us that when we are in financially tough times we must cut our household spending, save money wherever we can, and try to pay down debt as much as possible. No matter what anyone tells you, you cannot spend your way to prosperity and it is insane to suggest that you can solve a problem brought about by too much debt and too much spending with more debt and more spending.
This is essentially what President Obama said today in front of the Brookings Institution in Washington, DC, in spite of the fact that our federal government finds itself in the very predicament outlined above.
Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.
Government stimulus NEVER works. By any sane metric, the most recent round of stimulus has been a colossal failure with a true unemployment rate presently floating around 17%. Huge public works projects did not work in the 30's and there is no reason to believe that this time around would be any different. The reason is quite simple; public works projects are kind of like summer jobs but worse. Once the project is completed everyone is once again out of work with long-term prospects that are no better than they were before the government came to the rescue. To further compound the problem, resources must be taken away from the productive segment of the economy (i.e. the private sector) to pay for this government largess.
Common sense tells us that when we are in financially tough times we must cut our household spending, save money wherever we can, and try to pay down debt as much as possible. No matter what anyone tells you, you cannot spend your way to prosperity and it is insane to suggest that you can solve a problem brought about by too much debt and too much spending with more debt and more spending.
Wednesday, December 2, 2009
More on "Climategate"
It's odd that a story of this magnitude is receiving little to no press. If you're not up to speed, the article "Lord Monckton’s summary of Climategate and its issues" should catch you up.
Another interesting article from the Daily Press reports on mining geology professor and man-made climate change skeptic Ian Plimer's recent appearance before a London audience:
Professor Plimer said climate change was caused by natural events such as volcanic eruptions, the shifting of the Earth’s orbit and cosmic radiation. He said: “Carbon dioxide levels have been up to 1,000 times higher in the past. CO2 cannot be driving global warming now.
“In the past we have had rapid and significant climate change with temperature changes greater than anything we are measuring today. They are driven by processes that have been going on since the beginning of time.”
He cited periods of warming during the Roman Empire and in the Middle Ages – when Vikings grew crops on Greenland – and cooler phases such as the Dark Ages and the Little Ice Age from 1300 to 1850.
And he predicted that the next phase would cool the planet.
Also, to tie in with a subject I've written about previously:
He suggested many scientists had a vested interest in promoting climate change because it helped secure more funding for research. He said: “The climate comrades are trying to keep the gravy train going. Governments are also keen on putting their hands as deep as possible into our pockets.
“The average person has been talked down to. He has been treated like a fool. Yet the average person has common sense.”
The belief that we could have such a profound effect on a planet that has existed for over 4.5 billion years and endured at least five mass extinctions is truly a testament to our arrogance as a species.
Another interesting article from the Daily Press reports on mining geology professor and man-made climate change skeptic Ian Plimer's recent appearance before a London audience:
Professor Plimer said climate change was caused by natural events such as volcanic eruptions, the shifting of the Earth’s orbit and cosmic radiation. He said: “Carbon dioxide levels have been up to 1,000 times higher in the past. CO2 cannot be driving global warming now.
“In the past we have had rapid and significant climate change with temperature changes greater than anything we are measuring today. They are driven by processes that have been going on since the beginning of time.”
He cited periods of warming during the Roman Empire and in the Middle Ages – when Vikings grew crops on Greenland – and cooler phases such as the Dark Ages and the Little Ice Age from 1300 to 1850.
And he predicted that the next phase would cool the planet.
Also, to tie in with a subject I've written about previously:
He suggested many scientists had a vested interest in promoting climate change because it helped secure more funding for research. He said: “The climate comrades are trying to keep the gravy train going. Governments are also keen on putting their hands as deep as possible into our pockets.
“The average person has been talked down to. He has been treated like a fool. Yet the average person has common sense.”
The belief that we could have such a profound effect on a planet that has existed for over 4.5 billion years and endured at least five mass extinctions is truly a testament to our arrogance as a species.
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