Government as farce

$7.4 billion debt in state jobless fund is telling…

With depressing regularity, stories emerge out of Sacramento that provide explicit proof of the striking incompetence of our state’s leaders. Here’s the back story on the latest.

In the summer of 2001, Democratic lawmakers and then-Gov. Gray Davis were pushing for a four-year, 96 percent increase in maximum unemployment benefits. Republicans strongly objected because they thought the big increase was unjustified and that the higher taxes to be imposed on employers to pay for it would be burdensome.

So what happened? Democrats forced through the benefit hike on a simple majority vote, but the accompanying bill to raise taxes on employers to fund the boost failed to achieve the necessary two-thirds support because of GOP objections. The sheer stinking dumbness of this gets even worse. In 2002, the state bureaucrats running the jobless benefits program told The Sacramento Bee this wouldn’t be a problem.

Flash-forward seven years. The San Jose Mercury News recently reported that the never-resolved gap created by the unfunded boost in benefits had come back to haunt the state in a huge way. The jobless fund is expected to be $7.4 billion in the red by year’s end and is on track to have an $18.4 billion deficit by the end of 2010, thanks to a 12.5 percent unemployment rate. The only reason this enormous problem didn’t blow up earlier this
year during budget negotiations was because of an interest-free $4.7 billion loan from the federal government. If the loan isn’t repaid
in its entirety by 2011, Washington will charge interest on the huge debt.

We’re skeptical that will ever happen, at least if Democrats still control the House and Nancy Pelosi, D-San Francisco, is still speaker. Instead, they’ll just print more money and continue adding to the national debt in obscene fashion. But at some point, we can expect to see a coordinated push for
massive new taxes on state employers to fund the benefits. If these taxes add a crushing new burden on business that keeps unemployment sky-high, so be it. We’re sure that some state bureaucrats somewhere will pop up to assure us this won’t be a problem.

Call this what it is: government as farce.

Nevertheless, despite the frequency with which we see such stories, the Sacramento political and media establishment remains resolute in its belief that the real problem with California is Californians — you know, the numskull voters who demand services but balk at paying for them.

As if voters wanted state employees to be among the highest paid in the nation with pension benefits most Californians would die for. As if voters wanted the number of workers paid by the state to increase by nearly 25 percent since 1997. As if voters wanted the state government to do something as apocalyptically stupid as increasing unemployment benefits by 96 percent without funding the gigantic increase.

The blame for all these brilliant decisions falls on state leaders and state leaders alone.

Source: The San Diego Union-Tribune, November 29, 2009

Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog

Federal Govt Will Push Mortgage Firms to Reduce More Loan Payments

The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering.

“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.” Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent.

Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments. “They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.

From its inception early this year, the Obama administration’s program, called Making Home Affordable, has been dogged by persistent questions about whether it could diminish a swelling wave of foreclosures. Some economists argued that the plan was built for last year’s problem — exotic mortgages whose payments increased — and not for the current menace of soaring joblessness. Lawyers who defend homeowners against foreclosure maintained that mortgage companies collect lucrative fees from long-term delinquency, undercutting their incentive to lower payments to affordable levels.

Last month, an oversight panel created by Congress reported that fewer than 2,000 of the 500,000 loan modifications then in progress had become permanent under Making Home Affordable. When the Treasury releases new numbers next month, it is expected to report a disappointingly small number of permanent loan modifications, with estimates in the tens of thousands out of the more than 650,000 borrowers now in the program.

More unsatisfactory data is likely to intensify pressures on the Obama administration to mount a more muscular effort to stem foreclosures beyond the Treasury’s campaign this week. Populist anger has been fanned by a growing perception that the Treasury has lavished generous bailouts on Wall Street institutions while neglecting ordinary homeowners — this, in the midst of double-digit unemployment, which is daily sending more households into delinquency. “I’ve been very frustrated by the pace of the program,” said Senator Jeff Merkley, an Oregon Democrat who sits on the Senate Banking Committee. “Very few people have emerged from the trial period.”

Though the administration’s program was initially proclaimed as a means of sparing three to four million households from foreclosure, “they’re going to be lucky if they save one or one-and-a-half million,” said Edward Pinto, a consultant to the real estate finance industry who served as chief credit officer to the government-backed mortgage company Fannie Mae in the late 1980s.

A White House spokeswoman, Jennifer R. Psaki, said the administration would continue to refine the program as needed. “We will not be satisfied until more program participants are transitioning from trial to permanent modifications,” she said. Capitol Hill aides in regular contact with senior Treasury officials say a consensus has emerged inside the department that the program has proved inadequate, necessitating a new approach. But discussions have yet to reach the point of mapping out new options, the aides say.

“People who work on this on a day-to-day basis are vested enough in it that they think there’s a need to do a course correction rather than a wholesale rethink,” said a Senate Democratic aide, who spoke on the condition he not be named for fear of angering the administration. “But at senior levels, where people are looking at this and thinking ‘Good God,’ there’s a sense that we need to think about doing something more.”

Mr. Barr, who supervises the program, portrayed such deliberations as part of a constant process of assessment within the Treasury. He expressed confidence that the mortgage program had sufficient tools to deliver relief, characterizing the slow pace as reflecting a lack of follow-through, and not structural defects requiring a revamping. “We’re seeing a failure by some of the bigger banks on execution,” Mr. Barr said. “We’re going to be quite focused and direct on particular institutions that are not doing a good job.”

The banks say they are making good-faith efforts to comply with the program and provide relief. “We’ve poured resources into this,” said a spokesman for JPMorgan Chase, Tom Kelly. “We’ve made dramatic improvements, and we continue to try to get better.”

Some senators contend that the Treasury program, addressing mortgages whose low promotional interest rates had soared, is outmoded. At this point, foreclosures are being propelled by joblessness, which is sending millions of previously credit-worthy people with ordinary mortgages into delinquency.

Source: The New York Times, By PETER S. GOODMAN Published: November 28, 2009

Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog

California public pensions loom as big issue

Advocates of overhauling California’s troubled pension system for public employees couldn’t have chosen a more providential moment to launch their reform campaign.

The huge California Public Employees’ Retirement System is in deep financial doo-doo, having lost tens of billions of dollars in often-speculative investments, and is telling state and local officials it will need more "contributions." Meanwhile, investigations are under way into multimillion-dollar payments to placement agents who arranged some investments. With a public pension scandal simmering and their private pension benefits shrinking, voters will resent a CalPERS bailout. Indeed, a recent Field Poll indicates that voters are inclined to support pension reform, setting the stage for a high-stakes political battle next year.

The California Foundation for Fiscal Responsibility filed two slightly different measures last week to establish a two-tier pension system, reducing benefits for newly hired public employees. It’s clearly hoping for financial backing from one of the two billionaire Republicans running for governor next year. And it may get support from outgoing Gov. Arnold Schwarzenegger, who has tried, in vain, to overhaul the pension system.

Meanwhile, CalPERS, whose board is controlled by union members, desperately wants to minimize backlash from its investment woes.
It’s promoting a "smoothing" plan under which its investment losses would be made up over 30 years, thus softening immediate impact on already strained budgets.

Financially strapped local governments appear to be opting for this easy payment plan, but Schwarzenegger is rejecting it, perhaps because if CalPERS sends a big bill to the state, it would enhance chances of passing the pending reform measure.

"By deferring pension contributions CalPERS would not only be gambling that its investment earnings in this economy will grow faster than its pension obligations but would also be using our kids’ money to do so because they will be the ones stuck footing the bill," Schwarzenegger said when the CalPERS plan was unveiled. While some other states have adopted smoothing, research by the Pew Center on the States indicates that it’s typically over a five- or six-year span, so California’s 30-year plan stands out like a sore thumb.

CalPERS’ assumed investment earnings rate, 7.75 percent per year, is more in line with other states but is too optimistic, critics such as Schwarzenegger financial adviser David Crane say. Crane calls it an "earnings assumption ungrounded in reality" and to achieve it, CalPERS is increasing its exposure to high-risk investments. Given that history and with CalPERS’ own actuary saying the current system is "unsustainable," it’s high time for the Legislature to conduct a top-to-bottom review of public pensions, rather than continuing its cowardly hear-no-evil, see-no-evil posture.

Source: Dan Walters, The Sacramento Bee on November 13, 2009

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5 Tips for Safe Online Shopping

There are several steps you can take to protect yourself while shopping – or doing anything – online. Follow these tips to protect your personal information while buying gifts this year.

1. Never shop online from a public Wi-Fi connection. Hackers can tap into Wi-Fi connections at hotspots, such as coffee shops, airports and hotels, to capture your personal information. If you must use public Wi-Fi, you can download for free the AnchorFree HotSpot Shield to hide your IP address while you’re online and protect your computer from snoopers. Also, never use a public computer to shop or check accounts online.

2. Don’t use your Smartphone to shop. Hackers can use the same tactics for tapping into your Smartphone as they use for your laptop or PC.

3. Don’t use your debit card for online shopping. If hackers steal your debit-card information and raid your bank account, you must report any misuse within two days to get the same $50 limited liability as you would with a credit card. Miss that deadline but report your loss within 60 days and you could be liable for up to $500. After 60 days, your liability is unlimited.

4. Shop online only at known retailers. Don’t let a search engine pick a site for you because it could be bogus. Even if you’re using a site that you think is legitimate, look for security labels, such as VeriSign and Cybertrust, and for https:// to appear in the URL on pages that prompt you to enter personal information. Also consider downloading McAfee’s free SiteAdvisor, which tests sites for dangerous downloads, spamming and more.

5. Don’t click on pop-up ads. Hackers recently have posted bogus ads with malicious software on legitimate sites (NYTimes.com, for example).

Source: Reprinted with permission. All Contents © 2009 The Kiplinger Washington Editors.

Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog

Most CA Lawmakers Are Failing Us

Each fall, the Legislature adjourns so lawmakers can return home and tell their constituents what a marvelous job they are doing. Many, who are focused on reelection or higher office, will have to spin a really good yarn to convince voters that their performance merits more time in Sacramento.

A story of accomplishment will be a hard sell for those who approved $12.6 billion worth of new tax increases last February. That equates to a $1200 increase for a family of four at a time when they can least afford it. The only "success" of the Legislature has been to reinforce California’s reputation as having the worst tax and regulatory climates in America. The state’s unemployment rate is now at 12.5 percent, and 3.7 million workers are either unemployed or underemployed. That’s a full 19% of the workforce who wants a full time job and doesn’t have one.

Of course income and sales tax revenue has declined drastically since the tax hikes, as legislators fail to understand that increased taxes will negatively impact consumer behavior. Because of that and other unrealistic revenue assumptions, California is now facing a $21 billion deficit over the next two years. Further compounding their culpability, most Sacramento politicians chose to ignore the clear lesson of the 1991 tax increases, which produced
less revenue for the following two years. A recent poll shows that voters sense that lawmakers are failing them. The Field Poll found that only 13 percent of the state’s registered voters approve of the Legislature’s performance, the lowest rating since the survey group started measuring opinions of that institution in 1983.

Excuses like, "it’s the national economy" won’t wash. California has become a laughingstock and the national poster child for government mismanagement. However, there are a few lawmakers who will legitimately be able to claim "it was the other guys" who got us into this mess. To sort out who are the malefactors and who are good stewards of the voters’ confidence, the Howard Jarvis Taxpayers Association tracks the votes of all lawmakers on taxpayer related measures and issues its annual HJTA Legislative Report Card. For the 2009 session, 35 bills were used to evaluate and grade voting records and over half of lawmakers are failing. Out of 120 members of the Legislature, 73 received a grade of "F" for 2009. On the other end of the spectrum, 29 received a grade of "A." Only two, Assembly Members Joel Anderson and Diane Harkey, received perfect scores.

Lawmakers have to work very hard to fail. Voting for taxpayers’ interests just over 30 percent of the time earns a better grade. Sadly, many of these politicians are so dedicated to picking taxpayers’ pockets that they have no shame. Some may actually regard their "Fs" as a badge of honor. The Legislative Report Card is designed to help Californians gauge how their own state representatives are actually performing based on what they have done, not on what they say, and to hold them accountable.

To view all grades and the methodology on which they are based, go to www.hjta.org/legislative/report-cards/.

Source: Jon Coupal is president of the Howard Jarvis Taxpayers Association

Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog

Don’t Try To Fool Tax Payers!

When the word "Paris" is associated with taxpayer outrage, it is usually due to junketing politicians jetting off to the France at public expense. But it was similarly sounding Perris, California, a Riverside County community of 50,000, which became the center of taxpayer outrage last week when voters rejected an illegal property tax.

City officials in Perris, whose nickname is "the skydiving capital of America," forgot their parachutes when they jumped at a chance to wring an additional $2 million from property owners through a per-parcel tax that they claimed could be passed with a simple majority, contrary to the strict provisions of Proposition 13, which mandate a two-thirds vote.

Whether they were conniving, or just plain clueless, city council members’ failure to do an equipment check brought harm to their constituents, regardless of the outcome of the vote. Had the measure passed, the Howard Jarvis Taxpayers Association legal team would have swung into action and addressed multiple violations of law.

First, the city was attempting to impose a majority vote parcel tax which is unconstitutional both under the uniformity of tax provision of the California Constitution (Article XIII, Section 1) and Proposition 218 (Article XIII D, Section 3). Second, there was a companion advisory measure to get around the two-thirds vote requirement for special taxes. Third, the city abused the emergency exception for general taxes under Prop. 218 in not complying with the election consolidation requirement. Fourth, the city actually named the tax (including on the ballot label) a public safety tax — a special tax  requiring a two-thirds vote — even though it was proposed as an unrestricted majority vote general tax.

All these violations left HJTA’s legal team asking the age old question: What were they thinking? The technical term for any lawsuit with this many meritorious claims is a called a "slam dunk."

After being stuck down by the courts, all city officials would have been left with would have been a bill for court costs and for the special election, which they would have passed on to taxpayers. Fortunately for Perris taxpayers, voters were wearing their chutes, as 60 percent rejected the proposed new tax. Unfortunately, although the city will now avoid the expense of litigation, the cost of the futile special election remains, and this will, no doubt, be remembered by voters when current city council members face reelection.

Like most local governments during this economic downturn, Perris is experiencing a decline in revenue. The problem is that those in government, who are quick to solve their problem by reaching for taxpayers’ wallets, fail to understand that they have less because their constituents have less to give. Unemployment is at 15 percent in Riverside County, and few expect a quick turnaround. So it adds insult to injury when officials attempt to use illegal methods to extract more from already suffering taxpayers.

The Howard Jarvis Taxpayers Association would like to provide this gentle reminder to any other local government officials who are tempted to violate the clear provisions of the Jarvis sponsored Propositions 13 and 218: Our legal department is watching you.

Source: Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog

C.A.R. Mortgage Protection Program has been extended through 2010

Great news for first-time buyers:  The California Association of REALTORS® Mortgage Protection Program has been extended through 2010.

To continue to provide first-time home buyers with peace of mind when purchasing your first home, the C.A.R. Housing Affordability Fund has extended the Mortgage Protection Program (MPP) through December 2010. To date, more than 1,700 first-time home buyers already have been approved for the program, and the numbers continue to increase. Be sure to see if you qualify for this great opportunity. Click here for more information, requirements, and a downloadable application.

Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog

First-Time Homebuyer Tax Credit Extended & Expanded

On November 6, 2009, President Obama signed a bill into law that immediately extended the popular tax credit program offering up to $8,000 for qualified first-time homebuyers (FTHBs) into the first half of 2010.

The bill also instantly expanded the program, offering up to $6,500 in tax credits for qualified repeat home buyers, swinging open the door for even more qualified homebuyers to take advantage of this valuable opportunity at a time when mortgage rates are still near historical lows.

First-Time Buyers
For FTHBs (defined as someone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title), the basic rules remain the same, with one important exception – higher income limits are now in place, increasing the pool of potential buyers eligible for the tax credit of up to 10% of the purchase price or up to $8,000. This is money that does not have to be repaid as long you stay in your new home for at least 36 months.

Single tax filers who earn up to $125,000 are now eligible for the total credit amount. Those who earn more than this cap (but less than $145,000) can receive a partial credit. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap (but less than $245,000) can receive a partial credit.

Repeat Buyers
The new homebuyer program offers an exciting new opportunity missing from the previous incentives – a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. This gives those who already own a qualifying residence some additional reasons to take advantage of lower home prices and interest rates and finally move up to the home of their dreams.

  Important Deadlines
Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.

Get the Facts
There are other important rules and guidelines you must meet to qualify for this great opportunity. So, if you or someone you know has missed out on the first two home buyer tax credit programs in the last two years, don’t wait. Give us a call today. We’ll gladly review your situation and see if you can benefit from this new and improved program.

Source: PlatinumPro Marketing

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Happy Thanksgiving!

May this Thanksgiving bring you health, abundance, vitality, love, and peace.

May it be a beginning to a recovery and better days ahead for all!   

God bless you and your loved ones!

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Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog

Reagan’s Words Still True

According to Ronald Reagan, the nine most terrifying words in the English language were, "I’m from the government and I’m here to
help." If anything, they are even more terrifying today.

Everywhere we turn, government is intruding into our lives and homes. Don’t want to buy health insurance? Go to jail, or so mandates Speaker Pelosi’s comprehensive healthcare "reform" bill. Need a little more heat on a blustery day? Better check with the government before touching your thermostat. And don’t let them catch you even thinking about using an incandescent light bulb, even though some tiffany style lamps look ridiculous with anything else.

Now, California, which has become the leader of the nation for nutty ideas – yes, Nancy Pelosi is from our state – wants to limit the power consumption and size of the television you buy. On November 18th the California Energy Commission is scheduled to vote on a proposal that would limit the sales of televisions to those using about one-third the power consumed by today’s models. If the Commission gets its way, it will put a real crimp in the plans of those who have been working hard to be able to afford a home theater system. Although technology is rapidly making more energy efficient products available, the energy commission is going to wave its magic wand and say, "If you don’t comply, bye bye to your big screen TV."

Alright, can’t watch the game this Sunday? How about taking the family for a drive? Just make sure your car is not black. Seriously… The California Air Resources Council would like to see black cars banned because the color absorbs more heat. That’s right, they want to eliminate black cars because they figure that drivers are turning on their air conditioning, which means using a little more gasoline. If black cars go, can navy blue be far behind? Folks, we are rapidly approaching an America where government will be picking the color schemes of our homes.

The nanny-state is proving a relentless foe of freedom. Don’t be surprised if, in a few short years, government looks to take over, not just standards for your appliances and automobiles, but when you can operate them, for how long and how much energy they consume in a given time frame. If Government bureaucrats think people are using too much energy to heat and cool their homes, they’ll just take control of thermostats electronically – so that the temperature of your child’s bedroom is dictated by some bureaucrat in Sacramento or Washington. These are the same fools who believe that such control actually makes more sense than encouraging the building of new power plants to keep up with demand for energy.

And while those in government seem intent on controlling every aspect of our lives, it is not farfetched to suggest that to pay for these programs, their next step will be to seize more tax money directly from our paychecks. Oh, wait, they just did that by increasing withholding on wages by 10 percent.

Source: Jon Coupal is president of the Howard Jarvis Taxpayers Association. California’s largest grass-roots taxpayer organization dedicated
to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Posted via email from REALTOR Jeero’s La Canada La Crescenta Blog