Thursday, July 29, 2010

Insanity on steroids

July 29th, 2010                        sample from budget session

US House:  Rep Ann Kirpatrick  (Dem) AZ  Told the house that families in her district "are forced to live with less every day and they somehow make do." "Its time for congress to do the same." She made a motion to amend the appropriations bill by reducing Congressional pay and discretionary spending by 5%.

Rep John Olver (Dem) MA and others said it was "not possible." Motion failed.

Rep Jim Jordan (R) OH Told the house "with a $1.4 Trillion Deficit, $13 Trillion Debt we need to take steps now to start the process of reducing spending." Made a motion to revert discretionary spending back to 2008 levels.

Rep John Olver (Dem) MA and others said it was "not possible." Motion failed.

Rep Jeff Flake (R) AZ attempted to reach house members by repeating the debt figures and telling the house how they were so "incredibly out of touch with the American families across this country." He made 4 motions to reduce spending on earmarks by $1 million each. For the renovation of a building in Buffalo, NY, for adding more bike paths in Tacoma, WA, for more bike trails in RI and another similar project. “With our government buried so deep in debt, how can we possibly ask taxpayers to pay for this?”

Rep John Olver (Dem) MA and others said this was “minuscule amounts of money.” “Cutting these projects will not amount to anything.”

Rep Jeff Flake (R) AZ said, “If we can’t even cut, what you call “small amounts”, how will we ever deal with the deficit and debt?”

Rep John Olver (Dem) MA and others said it was "not possible." Motion failed.

Tom Peters: “Insanity on steroids” “Don’t we send addicts to rehab?”

Wednesday, July 28, 2010

Playing GOD with the Free Market

First off, this topic is complex. Many books and theories have been written. After studying the meltdown and taking a close look at history, I have come to the following conclusion.

It seems Government intervention most always has a negative impact on the free market system. Their tinkering with business in un-natural, artificial ways may seem to some to have benefits but a common sense evaluation of this approach clearly shows both short term and long-term consequences.

In the 1990’s Congress attempted to artificially force the American Dream of home ownership onto millions of Americans who were not yet qualified and not prepared to take on the responsibility.

The financial institutions initially said no. They could not lower their requirements for home loans. The risk would be great and they would surely lose money.

The government enabled a situation where the lenders could quickly move these risky home loans to institutions such as Fanny Mae and Freddy Mac. In that case, the lenders were willing to make loans to who would otherwise be unqualified.

Once the process started it was not long before unscrupulous loan originators got very involved in the process. They knew that it only took 90 days to remove the risk from their desk to someone else’s.

"Think about that for a minute. If a bank is on the hook for the loan long term, the lender would act more like an adviser to the borrower, because it would be in the lenders best interest to make sure the borrower was truly ready to handle the responsibility. By taking away the lenders liability the lender goes from being an adviser to a salesman."

The more they lend the more they make so they began inflating loans to as high a level as possible, as long as the borrower could cover the payment for at least 90 days the lender was home free, literally.  This began to artificially inflate the real estate values.

There were lots of deals with appraisers inflating property values; the rating agencies rated bulk real-estate holdings as AAA when they were not even close.

Wall Street saw all the money moving around and wanted in. Their lobbying efforts finally paid off when Congress rescinded the 1933 Glass-Steagall Act. This was a provision that prevented Investment Banks from buying insurance companies and commercial banks among other things. This measure, by Congress, gave the green light for Members of Wall Street to grow “too big to fail”.

The problem was that Wall Street was investing lots in the AAA paper from the real-estate sector.

The government was not done yet, through the SEC they waived the leverage cap rule for the largest financial institutions on Wall Street. Originally they could borrow 12-1. If they had 1 billion in assets they could borrow 12 billion. What a deal!

As if that was not good enough once waived by the SEC they leveraged 20, 30 and even 40 times their asset value. Giant bets were made. But that was OK, because they took insurance out on those outrageous bets. This insurance sold by AIG and others was called Credit Default swaps.

The government waived the up-tick rule, a rule regulating a firm’s ability to short sell its own stock.

When these American Dream Home Loans began to default the stage was set for one of the biggest melt downs in our history. All preventable, it never had to happen. The Government simply could not leave the Free Market System alone

Wall Street exploited the situation like never before. Paying off rating agencies for the AAA ratings, selling subprime mortgage backed CDO's and other financial products with the fraudulent rating. Selling credit default swaps (insurance) on these subprime mortgage groups. AIG called these CDS's "Free Money" because they thought they would never have to pay out on them.

The market collapsed and Wall Street was left trying to figure out what just happened.

Once again the Government intervenes. OK, so they set the stage for this giant catastrophe and now they want to fix it?

The Federal Reserve and the US Treasury start wheeling and dealing. Deciding who they wanted to win and who they wanted to lose. They closed companies down and sold them for ridiculously low amounts to their friends and they told companies who they should partner with. There is way more to this story. Basically The Fed and Treasury love playing GOD over the stock market.

So the government swoops in to save the day. Providing hundreds of billions to their friends on Wall Street while paving a little highway so you can see, with your own 2 eyes, what a wonderful job they are doing for you.

The government succeeded in creating a situation where millions of Americans lost their retirement savings, lost their jobs and burying all of us in an ocean of debt.

Now, even though their own experts tell them that their spending is unsustainable they give federal employees a pay raise, put billions of dollars worth of earmarks in the budget and then vote to increase the national debt limit so they can borrow more money to pay for it.

I am completely dedicated to the free market system. This does not mean No Regulation. The financial sector basically has a license to steal so we definitely need realistic, well thought out regulations but not regulations that allow Government to interfere with the natural balance of an honest free market. You need basic rules to discourage theft and fraud.

Look, when companies fail the competition will pick up the pieces, others will come along and replace them with new money and new innovation. Bailouts negatively disrupted the natural balance of the free market. Bailouts reward bad behavior while punishing those who have done things right.

When time gets tuff the sole job of Congress should be to find ways to reduce the burden on all taxpayers, not escalate spending, forcing even more taxes and at the same time devaluing the dollar.

It truly will not be easy to repair the damage and put us on a positive course but I believe our seniors, our children, our grandchildren and our Country deserve that we try.

Tom Peters
Average American
for United States Senate

Monday, July 26, 2010

Something very serious is coming our way!

That’s why I am running for US Senate, to stop it! With $13 Trillion in debt we are headed into a wall. We will hit this wall hard. We desperately need to restructure the way Congress works. Party politics only creates delays and distractions from the most important financial challenge facing our nation. A list of campaign promises will not fix anything. I have The Plan to meet this challenge.

They say its all about the money, then, let’s make it about the money. In The Plan, Congress and all Federal Employees will face personal financial consequences for their failure to reach benchmarks towards a balanced budget. It also will reward those who provide accepted cost saving proposals. If you and I fail at our jobs, do we face consequences? Sure we do. Why should Congress be any different?

But can an Independent Candidate who has NO obligation to either party, who will NOT accept the Party’s Wall-Street money, who has asked for NO contributions from his supporters and who promises to be the biggest pain in the neck Congress has ever seen, get enough Nominations from New Hampshire Voters, in the next few days, to even get his name on the Ballot? That, my friend, will be up to you.

(Ind’s need 3000 nominations to get on the ballot. Dem’s and Rep’s need 0.)

Please visit:
Thank you for your consideration

Tom Peters for US Senate
Average American not your Average Candidate
P.O. Box 674
Ashland, NH 03217 603-968-7800

Sunday, July 25, 2010

Want to hear something funny? The interest on the national debt is equal to giving every single New Hampshire community 5 Million Dollars >>>>>>>>Every Day! Gee, thats not funny but its a real good reason to start a Common Sense American Revolution. New Hampshire Voters, I need your help:

Saturday, July 3, 2010

3 Facts facing every American Family.

1 Our national debt is growing at an alarming rate.

Even after Congress was warned, by their own experts, that their spending addiction is unsustainable, they continue to pile up an astronomical debt. It just passed the $13 Trillion Dollar mark for the first time in the history of our Great Nation.

2 Congress will not take the necessary steps to fix this incredible problem.

First off, they will not take responsibility for it. It’s not their fault, right?
Secondly, new and old candidates alike are so worried about getting elected and re-elected they will make feel good promises like “I’ll create jobs, I’ll reduce taxes, I’ll balance the budget” with absolutely no plan to actually do it.

3 If we want this problem solved we must do it ourselves.

That’s right, you and me. You may think I’m kidding or perhaps naive but I am dead serious. If you take a few minutes and read you can decide for yourself if you want to be part of a National Movement to compel Congress to follow the will of the people. The Plan will help us populate congress with ONLY those who will commit to a balanced budget. A huge start in achieving fiscal responsibility.

If we allow Congress to continue they will spend us into a situation that will have devastating consequences. Let’s fix things while we can still get our hands around the problem. Let’s not wait to see how bad things can really get.
I sincerely appreciate your consideration.

Respectfully submitted by

Tom Peters
Average American for United States Senate

P.O. Box 674
Ashland, NH 03217