Archive for the ‘ Finance ’ Category

Short-term gimmicks, long-term damage

How the passing of the Patient Protection and Affordable Care Act will exacerbate America’s fiscal woes

by Colin Fuess

Economist Laurence J. Kotlikoff has been saying it for years: America is bankrupt, whether or not the government is willing to admit it. His most recent evaluation of its fiscal condition is terrifying: “Based on the [Congressional Budget Office’s] data, I calculate a fiscal gap of $202 trillion, which is 15 times the official debt.” That, says Kotlikoff, means America is in worse fiscal shape than Greece.

The reason for America’s fiscal train wreck is Congress’ deceptive accounting practices. In order to pass the Patient Protection and Affordable Care Act (or “the Act”), Congress fudged their numbers through tried-and-true methods.

The fate of the Act lied in reports from the Congressional Budget Office. If the CBO predicted that the Act would reduce the deficit, the Act would pass. On March 11, 2010, the CBO issued its projections: the Act would reduce the deficit $132 billion by 2019, and another $1.2 trillion in the decade following.

However, the CBO issued a far less favorable report on March 19. At the request of Rep. Paul Ryan (R-WI), the CBO analyzed the combined impact of the Act, the Health Care and Education Reconciliation Act of 2010 (HCERA), and the Medicare Physician Payment Reform Act of 2009 (MPPRA): “CBO estimates that enacting all three pieces of legislation would add $59 billion to budget deficits over the 2010-2019 period.”

The CBO’s second report was ignored. On March 21, the House passed both the Act and the HCERA, both of which Obama signed into law shortly thereafter. By cherry-picking favorable numbers, Speaker Nancy Pelosi ramrodded the Act through the House and to Obama’s desk.

Another one of Congress’ fiscal gimmicks was delaying the bulk of the Act’s expenses until 2014. The CBO’s ten-year analysis, therefore, only accounts for six years of spending, making the Act’s costs far more palatable.

The purpose of reforms is to save money by eliminating waste in health care spending, yet the Act will make health care so complicated that this is laughably quixotic. The Department of Health and Human Services “doesn’t know how to do any of this,” says Edmund Haislmaier, a Senior Research Fellow at the Heritage Foundation. “The federal government doesn’t have any experience running insurance regulations.” Already the HHS has missed many self-imposed deadlines.

Furthermore, between now and 2014, the burden falls on the states to run complex high-risk health coverage pools. States must spend millions to research how to run them (itself an unprecedented undertaking). Washington has allocated $5 billion for the 7 million Americans who qualify, but according to a report by the National Institute for Health Care Reform, there will be only enough money to cover 200,000 of them.

One of Kotlikoff’s refrains is that if America is save itself from bankruptcy, it must “radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess.” Congress did the exact opposite, and it did so through self-serving gimmicks. They passed the Act without reading it, preparing for it, or considering the big financial picture. The Act is a thousand pages of unforeseen consequences, all of which will add to waste. This, combined with unrealistic or fudged fiscal projections, will drive us further into debt.

Soon, Washington might envy Greece.

2010
11/05
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State Department Transparency: Who Can Tell?

In the State Department’s Agency Financial Report for Fiscal Year 2009, Secretary of State Hillary Clinton writes in the introductory “Message from the Secretary”:

“We take seriously our duty to spend taxpayer dollars effectively, invest in our nation’s long-term success, and make our work transparent to Congress and the American people.” (page 2)

A labyrinth with glass walls is still a labyrinth.

That same financial report states the State Department’s budget rose 29% ($11.3 billion) between FY 2008 and FY 2009. Good luck finding where that $11.3 billion went.

The sheer number and volume of State Department and Government Accountability Office (GAO) documents is dumbfounding. The State Department’s own documents are scattered around its website. If you have a budget question, you have to find out if it is in an Executive Budget Summary, a Budget in Brief, or an Agency Financial Report (they are different things). Each one is between 130 and 180 pages.

The GAO, meanwhile, has 150 reports on the State Department dating from January 2008 to August 2010. The grand total is just shy of 7,000 pages (two reports only have summaries posted online). If one reads twenty-four hours a day at twenty pages per hour, it would take over two weeks to read all that.

The State Department issued 2.7 million fewer passports in FY 2009 than in FY 2008 (down 17% from 16.2 million to 13.5 million). Want to find out why? Want to find out if the State Department spent more money or less money processing passports in 2009? Since January 2009, the GAO has written nine relevant reports (229 pages). Topics range from vulnerabilities in passport issuance processes to the surge in demand for visas and passports in Mexico. One report from June 2010 is entitled “Current Situation Results in Thousands of Passports Issued to Registered Sex Offenders.” By the way, at least 4,500 registered sex offenders were issued passports during FY 2008. Hopefully some of the State Department’s budget increase is going towards fixing that little problem.

The State Department “makes its work transparent to Congress and the American people,” but how can we ever be sure? If their work were less than transparent, one would have to read thousands of pages to prove them wrong.

2010
09/03
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A band of brothers. All rats!

This is an interesting story put together from various articles and TV
shows by the British Times paper. It shows what Obama and his friends
are really all about. It’s not hope and change, it is money.

I warn you, the first part is a little boring, but stick with it. The
second part connects all the dots for you (it will open your eyes). The
end explains how Obama and all his cronies will end up as
multi-billionaires. (It’s definitely worth the read. You will not be
disappointed).

A small bank in Chicago called SHOREBANK almost went bankrupt during the
recession. The bank made a profit on its foreign micro-loans (see
below) but had lost money in sub-prime mortgages in the US . It was
facing likely closure by federal regulators. However, because the bank’s
executives were well connected with members of the Obama Administration,
a private rescue bailout was arranged. The bank’s employees had donated
money to Obama’s Senate campaign. In other words, ShoreBank was too
politically connected to be allowed to go under.

ShoreBank survived and invested in many “green” businesses such assolar
panel manufacturing. In fact, the bank was mentioned in one of Obama’s
speeches during his election campaign because it subjected new business
borrowers to eco-litmus tests.

Prior to becoming President, Obama sat on the board of the JOYCE
FOUNDATION, a liberal charity. This foundation was originally
established by Joyce Kean’s family which had accumulated millions of
dollars in the lumber industry. It mostly gave funds to hospitals but
after her death in 1972, the foundation was taken over by radical
environmentalists and social justice extremists.

This JOYCE FOUNDATION, which is rumored to have assets of 8 billion
dollars, has now set up and funded, with a few partners, something
called the CHICAGO CLIMATE EXCHANGE, known as CXX. It will be the
exchange (like the Chicago Grain Futures Market for agriculture) where
Environmental Carbon Credits are traded.

Under Obama’s new bill, businesses in the future will be assessed a tax
on how much CO2 they produce (their Carbon Footprint) or in other words
how much they add to global warming. If a company produces less CO2 than
their allotted measured limit, they earn a Carbon Credit. This Carbon
Credit can be traded on the CXX exchange. Another company, which has
gone over their CO2 limit, can buy the Credit and “reduce” their
footprint and tax liability. It will be like trading shares on Wall
Street.

Well, it was the same JOYCE FOUNDATION, along with some other private
partners and Wall Street firms that funded the bailout of ShoreBank.
The foundation is now one of the major shareholders. The bank has now
been designated to be the “banking arm” of the CHICAGO CLIMATE EXCHANGE
(CXX). In addition, Goldman Sachs has been contracted to run the
investment trading floor of the exchange.

So far so good; now the INTERESTING parts.

One ShoreBank co-founder, named Jan Piercy, was a Wellesley College
roommate of Hillary Clinton. Hillary and Bill Clinton have long
supported the bank and are small investors.

Another co-founder of Shorebank, named Mary Houghton, was a friend of
Obama’s late mother. Obama’s mother worked on foreign MICRO-LOANS for
the Ford Foundation. She worked for the foundation with a guy called
Geithner. Yes, you guessed it. This man was the father of Tim Geithner,
our present Treasury Secretary, who failed to pay all his taxes for two
years.

Another founder of ShoreBank was Ronald Grzywinski, a cohort and close
friend of Jimmy Carter.

The former ShoreBank Vice Chairman was a man called Bob Nash. He was the
deputy campaign manager of Hillary Clinton’s presidential bid. He also
sat on the board of the Chicago Law School with Obama and Bill Ayers,
the former terrorist. Nash was also a member of Obama’s White House
transition team.

(To jog your memories, Bill Ayers is a Professor at the University of
Illinois at Chicago . He founded the Weather Underground, a radical
revolutionary group that bombed buildings in the 60s and 70s. He had no
remorse for those who were killed, escaped jail on a technicality, and
is still an admitted Marxist).

When Obama sat on the board of the JOYCE FOUNDATION, he “funneled”
thousands of charity dollars to a guy named John Ayers, who runs a
dubious education fund. Yes, you guessed it. The brother of Bill Ayers,
the terrorist.

Howard Stanback is a board member of Shorebank. He is a former board
chairman of the Woods Foundation. Obama and Bill Ayers, the terrorist,
also sat on the board of the Woods Foundation. Stanback was formerly
employed by New Kenwood Inc. a real estate development company co-owned
by Tony Rezko.

(You will remember that Tony Rezko was the guy who gave Obama an amazing
sweet deal on his new house. Years prior to this, the law firm of Davis ,
Miner, Barnhill & Galland had represented Rezko’s company and helped him
get more than 43 million dollars in government funding. Guess who worked
as a lawyer at the firm at the time. Yes, Barack Obama).

Adele Simmons, the Director of ShoreBank, is a close friend of Valerie
Jarrett, a White House senior advisor to Obama. Simmons and Jarrett also
sit on the board of a dubious Chicago Civic Organization.

Van Jones sits on the board of ShoreBank and is one the marketing
directors for “green” projects. He also holds a senior advisorposition
for black studies at Princeton University . You will remember that Mr.
Van Jones was appointed by Obama in 2009 to be a Special Advisor for
Green Jobs at the White House. He was forced to resign over past
political activities, including the fact that he is a Marxist.

Al Gore was one of the smaller partners to originally help fund the
CHICAGO CLIMATE EXCHANGE. He also founded a company called Generation
Investment Management (GIM) and registered it in London , England . GIM
has close links to the UK-based Climate Exchange PLC, a holding company
listed on the London Stock Exchange. This company trades Carbon Credits
in Europe (just like CXX will do here) and its floor is run by Goldman
Sachs.

Along with Gore, the other co-founder of GIM is Hank Paulson, the former
US Treasury Secretary and former CEO of Goldman Sachs. His wife, Wendy,
graduated from and is presently a Trustee of Wellesley College. Yes, the
same college that Hillary Clinton and Jan Piercy, a co-founder of
Shorebank attended. (They are all friends).

Interesting? And now the closing…

Global warming is a goose that lays golden eggs. As a result, Obama is working feverishly to win
the race. He aims to push a Cap-and-Trade Carbon Tax Bill through
Congress and into law.

Obama knows he must get this passed before he loses his majority in
Congress in the November elections. Apart from Climate Change he will
“sell” this bill to the public as generating tax revenue to reduce our
debt. But, it will also make it impossible for US companies to compete
in world markets and drastically increase unemployment. In addition,
energy prices (home utility rates) will sky rocket.

But, here’s the KICKER (THE MONEY TRAIL).

If the bill passes, it is estimated that over 10 TRILLION dollars each
year will be traded on the CXX exchange. At a commission rate of only 4
percent, the exchange would earn close to 400 billion dollars to split
between its owners, all Obama cronies. At a 2 percent rate, Goldman
Sachs would also rake in 200 billion dollars each year.

But don’t forget SHOREBANK. With 10 trillion dollars flowing though its
accounts, the bank will earn close to 40 billion dollars in interest
each year for its owners (more Obama cronies), without even breaking a
sweat.

It is estimated Al Gore alone will probably rake in 15 billion dollars
just in the first year. Of course, Obama’s “commissions” will be held in
trust for him at the Joyce Foundation. They are estimated to be over 8
billion dollars by the time he leaves office in 2013, if the bill passes
this year. Of course, these commissions will continue to be paid for the
rest of his life.

Some financial experts think this will be the largest “scam” or”legal
heist” in world history. Obama’s cronies make the Mafia look like rank
amateurs. They will make Bernie Madoff’s fraud look like penny ante
stuff.

2010
08/03
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Wall Street Reform: Overhaul or Mirage?

Wall Street Reform: Historic Overhaul or Mere Mirage?

by Colin Fuess

Like all of the Obama administration’s reforms, the Wall Street overhaul is as Byzantine as it is well meaning.  That latter part is always hotly debated, but it’s impossible for a level mind to believe Obama is trying to make America worse than before.  Even if he is, Wall Street may beat him to the punch.

On Wednesday, July 21, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act.  It is the most sweeping financial regulation in America since the Banking Act of 1933 – better known as the Glass-Steagall Act – which established the Federal Deposit Insurance Corporation (FDIC).  The Harvard Law Forum describes the Dodd-Frank Act best:

“(It) effects a profound increase in regulation of the financial services industry. The Act gives U.S. governmental authorities more funding, more information and more power. In broad and significant areas, the Act endows regulators with wholly discretionary authority to write and interpret new rules.”

The Dodd-Frank Act is meant to protect ordinary people from insidious schemers like Bernie Madoff and the reckless practices of elephantine financial firms like AIG, Citigroup, Bank of America, and Goldman Sachs.  The hope is that it will increase transparency and accountability on Wall Street, something with which people of all ideologies can agree.

The above summary plainly shows the other side of the coin: a bigger, more powerful federal government that will spend more money than ever.  But read Obama’s lips: he promises that while there will be more spending, “There will be no more tax-funded bailouts – period.”  (Check out Politifact’s running tally of Obama’s promises here).

Part of the Dodd-Frank Act is the Volcker Rule, the purpose of which is to “bar banking organizations from engaging in proprietary trading and sponsoring and investing in hedge funds and private equity funds, except as permitted under certain limited exceptions” (see the analysis by Goodwin Procter LLP).

Within just one week of the Act’s signing, Goldman Sachs found a loophole in the Volcker Rule:

“The big Wall Street firm has moved about half of its ‘proprietary’ stock-trading operations – which had made market bets using the firm’s own capital – into its asset management division, where these traders can talk to Goldman clients and then place their market bets… Simply by labeling a trade ‘customer related’ the firm can still make large market bets, and thus engage in some of the same risk taking the rule was designed to eliminate.” (FoxBusiness.com)

All it took for Goldman Sachs to circumvent the Volcker Rule was changing a couple words.  Goldman Sachs’ asset management – managing their clients’ assets – will expand to managing its own assets:

“Thanks to a line in the Volcker Rule which specifies trading ‘operations unrelated to customer operations,’ as long as the ‘prop trading’ is done for client-related purposes, it’s OK… The firm’s own employees might even be considered clients and allow prop trading to occur more freely within the firm.” (BusinessInsider.com)

Back in 2009, speaking of a recent North Korean missile launch, Obama said, “Rules must be binding.  Violations must be punished.  Words must mean something.”  Goldman Sachs, though, believes that it can change the meaning of words while still following the letter of the law.  Citigroup seems ready to follow suit by moving its proprietary traders into its hedge-fund unit, something that the Volcker Rule specifically bans.

Obama’s signing of the Dodd-Frank Act into law is only the beginning of Wall Street reform.  Simply put, is a law that calls for new laws.  It sets down a complex timeline for its provisions to come to fruition over the next couple years.  It is up to newly appointed regulators to interpret those provisions and write new laws accordingly.  They have time to react to the evasive maneuvers of Goldman Sachs and others who follow.  But we can already see how quickly and easily the vulpine firms on Wall Street can out-fox the federal government at every turn.  It is sinister cleverness.  It is Yankee ingenuity at its worst.

2010
07/30
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The state of our economy with Joe DioGuardi (No. 1)

Gabcast! The state of our economy with Joe DioGuardi (No. 1)

Austin Prime interviews Truth in Government Founder and President Joseph DioGuardi on the state of our economy, national debt and how young Americans can help join the fight for fiscal responsibility and contribute to the cause.

More information at: www.TruthInGovernment.org.

2010
07/02
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Truth In Government founder slams Congress on crippling debt

On Fox News’ Hannity show Joe DioGuardi reveals just how bad the situation is and calls for immediate action

Published on June 11, 2010

by Official Wire

(OfficialWire)

NEW YORK, NY

Full post available: http://www.officialwire.com/main.php?action=posted_news&rid=159269&catid=161

DioGuardi on Hannity

Appearing on the June 10 episode of the popular Fox News Channel show “Hannity,” Truth in Government founder Joe DioGuardi provided key information and insight about U.S. financial woes.  As a guest on Hannity’s “Great American Panel,” DioGuardi called out the latest Gallup poll results that showed the national debt has eclipsed jobs as the number one problem in America.  And the situation is worse than most people realize, according to DioGuardi. The Social Security and Medicare liabilities add an unsustainable burden to the national debt.  “All the money that’s been put in there [“trust accounts” for Social Security, Medicare, and Medicaid] was spent, and it’s not being replaced,” DioGuardi said.

DioGuardi also criticized President Obama for delayed action on the Gulf of Mexico oil spill.  “He just waited and waited, and now we’re trying to figure out what the problem is?” DioGuardi commented, and then added, “When you have a disaster of that magnitude, you’ve got to hit the ground running.” The former two-term congressman from New York has spent nearly two decades calling attention to congressional overspending, and the lack of transparency. More recently, in a play on President Obama’s popular book title, DioGuardi says that the president needs to show “audacity of action.”

About Truth In Government

Truth In Government (www.truthingovernment.org) is a non-profit organization dedicated to strengthening our country’s financial foundation by promoting accountability and transparency in congressional budgeting, accounting, and reporting. It accomplishes its mission through distributing informative content in print, broadcast and social media as well as speeches at public, business and civic events. The non-partisan group was founded in 1989 by former two-term congressman from New York, Joseph DioGuardi, a noted speaker and human rights activist, as well as the original author of the Chief Financial Officer and Federal Financial Reform Act (“the CFO Act”) signed by President George H. W. Bush in 1990. For more information, visit www.TruthInGovernment.org.

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Truth in Government
Joseph J. DioGuardi
jjd@aacl.com
Tel: (914) 671-8583
2010
07/01
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In budget crisis, states take aim at pension costs

In her New York Times article “In Budget Crisis, States Take Aim at Pension Costs,” Mary Williams Walsh discusses how pension plans are being cut. Illinois raised its retirement age to 67, the highest of any state, and capped public pensions at $106,800 a year. Arizona, New York, Missouri and Mississippi will make people work more years to earn pensions. Virginia is requiring employees to pay into the state pension fund for the first time. New Jersey will not give anyone pension credit unless they work at least 32 hours a week.

But there is a catch: Nearly all of the cuts so far apply only to workers not yet hired. Though heralded as breakthrough reforms by state officials, the cuts phase in so slowly they are unlikely to save the weakest funds and keep them from running out of money. Some new rules may even hasten the demise of the funds they were meant to protect. Lawmakers wanted to avoid legal battles or fights with unions, whose members can be influential to voters. So they are allowing most public workers across the country to keep building up their pensions at the same rate as ever. The tens of thousands of workers now on Illinois’s payrolls, for instance, will still get to retire at 60—and some will as young as 55.

One striking exception is Colorado, which has imposed cuts on its current workers, not just future hires, and even on people who have already retired. The retirees have sued to block the reduction. Other states with shrinking funds and deep fiscal distress may be pushed in this direction and tempted to follow Colorado’s example in the coming years. Though most state officials believe they are legally bound to shield current workers from pension cuts, a Colorado victory could embolden them to be more aggressive.

Colorado pruned a 3.5 percent annual pension increase to 2 percent, concluding that was the fastest way to revive its pension fund, which was projected to run out of money by 2029. The cut may sound small, but it produces big results because it goes into effect immediately. State plans vary widely, but many have other costly features, like subsidized early-retirement benefits, which could likewise be trimmed for existing workers.

Despite its pension reform, Illinois is still in deep trouble. That vaunted $300 million in immediate savings? The state produced it by giving itself credit now for the much smaller checks it will send retirees many years in the future—people who must first be hired and then, for full benefits, work until age 67. Joshua D. Rauh, an associate professor of finance at Northwestern University who studies public pension funds, predicts that at the current rate, Illinois’s pension system could run out of money by 2018. He believes the funds of other troubled states—including New Jersey, Indiana and Connecticut—are also on track to run out of money in less than a decade, unless they make meaningful changes.

To read the full article, Click Here.

2010
06/23
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The cost of seizing Fannie and Freddie surges for taxpayers

In his New York Times article, Binyamin Appelbaum discusses how the cost of seizing Fannie and Freddie surges for taxpayers. Fannie Mae and Freddie Mac owned 168,828 houses (roughly one new home every ninety seconds) at the end of March. Created by Congress, they have become “the nation’s largest landlords.”

Bill Bridwell, a real estate agent in the desert south of Phoenix, is among the thousands of agents hired nationwide by the companies to sell those foreclosures, recouping some of the money that borrowers failed to repay. In a good week, he sells 20 homes and Fannie sends another 20 listings his way. “We’re all working for the government now,” said Bridwell.

As it turns out, Fannie and Freddie were channeling money into loans that borrowers could not afford. As defaults mounted, the companies quickly ran low on money to honor their guarantees. The federal government, fearing that investors would stop providing money for new loans, placed the companies in conservatorship and took a 79.9 percent ownership stake, adding its own guarantee that investors would be repaid.

The huge and continually rising cost of that decision has spurred national debate about federal subsidies for mortgage lending. Republicans want to sever ties with Fannie and Freddie once the crisis abates. The Obama administration and congressional Democrats have insisted on postponing the argument until after the midterm elections.

Selling a house generally costs the government about $10,000. The outsides are weeded and the insides are scrubbed. Stolen appliances are replaced; brackish pools are refilled. And until the properties are sold, they must be maintained. Fannie asks contractors to mow lawns twice a month during the summer, and pays them $80 each time. That’s a monthly grass bill of more than $10 million. All told, the companies spent more than $1 billion on upkeep last year.

To read the full article, Click Here

2010
06/22
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National debt to hit 19.6 trillion by 2015

by Kirk Maltais

According to a new report by the Treasury Department, given last Friday to Congress, the national debt in the United States will rise to 102 percent of the gross domestic product by 2015, up from the current 93 percent, totaling out at $19.6 trillion.

According to University of Maryland Professor Carmen Reinhart, who recently testified in front of a bipartisan fiscal commission created by President Obama to curb national debt, a debt of over 90 percent of the GDP would slow economic growth.

The report also said that the debt owned by investors, which include nations such as Japan and China as well as wealthy individuals, will rise to an estimated $9.1 trillion by 2015, a 21 percent increase from the 7.5 trillion this number was at last year.

Having a larger debt than GDP would cost millions of jobs for the U.S, and would echo the financial meltdown in Greece, where their national debt right now is 125 percent of their GDP. In order to prevent this, unbridled spending on the wars in Afghanistan and Iraq, corporate bailouts, and other unnecessary government programs, must be cut and contained, and Congress must adopt a policy of fiscal responsibility.

(Source:  Reuters.com)

2010
06/09
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Cost of BP’s oil spill extends beyond its environmental toll

By Kirk MaltaisBP Oil Rig Explosion, April 2010

This week, BP announced that the response to the oil spill has so far cost the company $1.25 billion. However, with further cleanup costs necessary to fix the damage the spill has wrought on the Gulf region, some experts estimate the costs to rise in the area of $37 billion.

BP has publicly declared that they will pay for the cleanup effort, but this does not include the massive fallout from the spill that BP is not being held accountable for. Make no mistake, the burden of debt from this disaster will be left on the American taxpayer.

The most obvious economic hit from the spill is on the fishing industry of the region. While BP’s “Vessels of Opportunity” program has contracted with 1,113 area fishermen, there are many more who were not hired by the company. Many know no other work or lifestyle, and the 40-50k they make per fishing season is gone. Unemployment in Louisiana has risen because of the spill, with 12,000 filing claims since the spill first occurred. This applies to not only the fishermen of the area, but to workers in the $8.3 billion tourism industry that has been rendered lifeless by the spill. According to the Louisiana Tourism & Cultural Department, 14,980 tourism jobs are in flux because of the spill.

That doesn’t mean all markets have been negatively affected by the spill. Some hotels/tourist spots have opened up their doors to cleanup workers, streaming income into these otherwise lifeless areas. Hotels that would normally be half-full at this time of the year are now without any vacancies. However, the biggest concern is how long this business can be sustained. Once the cleanup workers leave, there will not be any alternative source of income for these areas.

This translates into debt for every consumer when the products from the Gulf experience a rise in price due to their scarcity. Because of the regulations that will most likely be enacted after the spill is fixed, oil companies will be forced to charge extra for gas. While in the short term the price of a gallon may not rise in a noticeable way, in the long run the consumers will be paying for this regulation. On top of that, the fish that came from the Gulf will now have to be imported from elsewhere as well, increasing our reliance on foreign goods and adding to the debt.

Another less obvious but likely more damaging effect this spill has on our economy is through real estate in the area. With a damaged ecosystem and jobs drying up, the Gulf region will take an enormous hit with its real estate; No one wants to move where there are no jobs. For an area hard hit by the housing crisis and the recession, this is dire news. For the taxpayer who lives elsewhere, it’s a sharp pain in the wallet, as big government will once again be compelled to step in.

2010
06/08
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