Rotting, Decaying And Bankrupt – If You Want To See The Future Of America Just Look At Detroit - The Economic Collapse Blog - Michael - June 16th, 2013 - Eventually the money runs out. Much of America was shocked when the city of Detroit defaulted on a $39.7 million debt payment and announced that it was suspending payments on $2.5 billion of unsecured debt, but those who visit my site on a regular basis were probably not too surprised. Anyone with half a brain and a calculator could see this coming from a mile away. But people kept foolishly lending money to the city of Detroit, and now many of them are going to get hit really hard. Detroit Emergency Manager Kevyn Orr has submitted a proposal that would pay unsecured creditors about 10 cents on the dollar. Similar haircuts would be made to underfunded pension and health benefits for retirees. Orr is hoping that the creditors and the unions that he will be negotiating with will accept this package, but he concedes that there is still a "50-50 chance" that the city of Detroit will be forced to formally file for bankruptcy. But what Detroit is facing is not really that unique. In fact, Detroit is a perfect example of what the future of America is going to look like. We live in a nation that is rotting, decaying, drowning in debt and racing toward insolvency. Already there are dozens of other cities across the nation that are poverty-ridden, crime-infested hellholes just like Detroit is, and hundreds of other communities are rapidly heading in that direction. So don't look down on Detroit. They just got there before the rest of us. The following are some facts about Detroit that are absolutely mind-blowing... (City on the Brink: Detroit Fights to Avoid Bankruptcy - Reuters - June 14, 2013)
Choice of Health Plans to Vary Sharply From State to State - New York Times - REED ABELSON - June 16, 2013 - With only a few months remaining before Americans will start buying coverage through the new state insurance exchanges under President Obama’s health care law, it is becoming clear that the millions of people purchasing policies in the exchanges will find that their choices vary sharply, depending on where they live. States like California, Colorado and Maryland have attracted an array of insurers. But options for people in other states may be limited to an already dominant local Blue Cross plan and a few newcomers with little or no track record in providing individual coverage, including the two dozen new carriers across the country created under the Affordable Care Act... Obama administration officials estimate that most Americans will have a choice of at least five carriers when open enrollment begins in October. There are signs of increased competition, with new insurers and existing providers working harder to design more affordable and innovative plans. In 31 states, officials say there will be insurers that offer plans across state lines. The exchanges will be open to the millions of Americans who are uninsured or already buying individual coverage. Many will be eligible for federal subsidies... People in certain parts of the country may not have the robust choice of insurers that the law sought as a way to keep premiums lower and customer responsiveness high. These people are likely to have few brand-name options to choose from, and they will be gambling on plans offered by insurers new to the individual market as well as brand-new carriers. The choice of providers and costs could also vary as a result... Whether the law ultimately accomplishes its aim of making the insurance markets nationwide more competitive — and plans more affordable — will only become clear over time. Experts expect some insurers to drop out after a year or so, while some other companies may decide to enter, depending on how the markets evolve. Insurers will have to figure out how to offer plans that most people can afford but still provide coverage to those with expensive medical conditions — and, for investor-owned plans, how to make a profit in the meantime... Insurers also say they plan to compete aggressively on price. The new law places strict limits on how much of every dollar of premium can go to anything other than medical expenses, and the insurers say success will depend on enrolling as many customers as possible rather than figuring out how high a premium they can charge to raise profits... The consumer-operated plans, known as co-ops, are also expected to put pressure on other insurers to hold down prices. “We don’t have to return money to stockholders on Wall Street, like for-profit insurers,” said Jerry Burgess, the chief executive of Consumers’ Choice Health Plan, the co-op established in South Carolina. He says the insurer expects to charge little more than the actual costs of its medical care and will lower its premiums if possible. “We would see an opportunity to gain market share by lowering our price,” Mr. Burgess said. “That’s exactly what health reform hopes will happen.”
Bloomberg Plan Aims to Require Food Composting - New York Times - MIREYA NAVARRO - June 16, 2013 - Mayor Michael R. Bloomberg, who has tried to curb soda consumption, ban smoking in parks and encourage bike riding, is taking on a new cause: requiring New Yorkers to separate their food scraps for composting. The building provides food waste containers and bins are kept in the trash rooms on each floor. Dozens of smaller cities, including San Francisco and Seattle, have adopted rules that mandate recycling of food waste from homes, but sanitation officials in New York had long considered the city too dense and vertically structured for such a policy to succeed. Recent pilot programs in the city, though, have shown an unexpectedly high level of participation, officials said. As a result, the Bloomberg administration is rolling out an ambitious plan to begin collecting food scraps across the city, according to Caswell F. Holloway IV, a deputy mayor. The administration plans to announce shortly that it is hiring a composting plant to handle 100,000 tons of food scraps a year. That amount would represent about 10 percent of the city’s residential food waste. Anticipating sharp growth in food recycling, the administration will also seek proposals within the next 12 months for a company to build a plant in the New York region to process residents’ food waste into biogas, which would be used to generate electricity. “This is going to be really transformative,” Mr. Holloway said. “You want to get on a trajectory where you’re not sending anything to landfills.” The residential program will initially work on a voluntary basis, but officials predict that within a few years, it will be mandatory. New Yorkers who do not separate their food scraps could be subject to fines, just as they are currently if they do not recycle plastic, paper or metal.
New Math Makes It Easier to Lower Unemployment - CNBC - June 11, 2013 - Conventional wisdom usually dies hard, but one long-held axiom relating to unemployment may be ready for the graveyard. For years, economists have accepted 150,000 as the benchmark number of new jobs needed every month to keep the jobless rate level. Anything above that was supposed to lower the rate, while anything below added to the closely followed headline number.
Not so anymore, according to the Chicago branch of the Federal Reserve . Central bank researchers, in fact, say that because of various factors that number now will be closer to 80,000. Moreover, a paper the Fed recently released on the issue maintains that the number will continue to fall, and at a fairly rapid pace, all the way down to 35,000 by 2016. "The projected slowdown is based on 1) a continuing decline in trend labor force participation attributable to the aging of the baby boomer generation and 2) a lower level of projected population growth going forward," Daniel Aaronson, vice president and director of microeconomic research, and Scott Brave, senior business economist, said in the research paper. "The Census Bureau projects a significant slowdown in population growth from the 1 percent-1.25 percent rate that prevailed for the two decades prior to the most recent recession," they added. If correct, the conclusion has important implications for those trying to gauge the nation's economic health-and in particular the highly influential central bank.
Coverage may be unaffordable for low-wage workers - Associated Press through Yahoo - RICARDO ALONSO-ZALDIVAR - June 13, 2013 - It's called the Affordable Care Act, but President Barack Obama's health care law may turn out to be unaffordable for many low-wage workers, including employees at big chain restaurants, retail stores and hotels. That might seem strange since the law requires medium-sized and large employers to offer "affordable" coverage or face fines. But what's reasonable? Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it's like a mirage — attractive but out of reach. The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance. Many are expected to remain uninsured, possibly risking fines. That's due to another provision: the law says workers with an offer of "affordable" workplace coverage aren't entitled to new tax credits for private insurance, which could be a better deal for those on the lower rungs of the middle class. Some supporters of the law are disappointed. It smacks of today's Catch-22 insurance rules. "Some people may not gain the benefit of affordable employer coverage," acknowledged Ron Pollack, president of Families USA, a liberal advocacy group leading efforts to get uninsured people signed up for coverage next year.
Obamacare: Is a $2,000 deductible 'affordable?' - CNNMoney - Tami Luhby - June 13, 2013 -
Until now, much of the debate swirling around Obamacare has focused on the cost of premiums in the state-based health insurance exchanges. But what will enrollees actually get for that monthly charge? States are starting to roll out details about the exchanges, providing a look at just how affordable coverage under the Affordable Care Act will be. Some potential participants may be surprised at the figures: $2,000 deductibles, $45 primary care visit co-pays, and $250 emergency room tabs. Those are just some of the charges enrollees will incur in a silver-level plan in California, which recently unveiled an overview of the benefits and charges associated with its exchange. That's on top of the $321 average monthly premium. For some, this will be great news since it will allow them to see the doctor without breaking the bank. But others may not want to shell out a few thousand bucks in addition to a monthly premium. "The hardest question is will it be a good deal and will consumers be able to afford it," said Marian Mulkey, director of the health reform initiative at the California Healthcare Foundation. "The jury is still out. It depends on their circumstances." A quick refresher on Obamacare: People who don't have affordable health insurance through their employers will be able to sign up for coverage through state-based exchanges. Enrollment is set to begin in October, with coverage taking effect in January. You must have some form of coverage next year, or you will face annual penalties of $95 or 1% of family income (whichever is greater) initially and more in subsequent years. Each state will offer four levels of coverage: platinum, gold, silver and bronze. Platinum plans come with the highest premiums, but lowest out-of-pocket expenses, while bronze plans carry lower monthly charges but require more cost-sharing. Gold and silver fall in the middle. The federal government will offer premium subsidies to those with incomes of up to four times the federal poverty level. This year, that's $45,960 for an individual or $94,200 for a family of four. There will be additional help to cover out-of-pocket expenses for those earning less than 250% of the poverty line: $28,725 for a single person and $58,875 for a family of four. The subsidies are tied to the cost of the state's silver level plans.
As Prices Rise, Banks Repossess More Homes - CNBC - Diana Olick - June 13, 2013 -
As real estate gains value nationwide, banks are acting more quickly on delinquent loans and repossessing more homes. For years the process has been slow and arduous, with hundreds of thousands of borrowers living in homes for months, even years after they had stopped paying the mortgage. That is now changing. So-called REO (real estate owned) activity by banks, when the bank takes ownership of the property, increased 11 percent in May from the previous month, according to RealtyTrac. "You have an environment now with rising home prices in most markets," said Daren Blomquist of RealtyTrac. "That gives the banks more incentive to go ahead and foreclose on these homes because they know they can turn around and sell them quickly for a price that is higher than what they would have been able to sell them a year ago."House farm bill cuts food stamps, kills jobs - All Voices - June 14, 2013 - Despite significant progress toward shrinking the federal deficit, House Republicans are pushing ahead with deep spending cuts that specifically target the poor and would kill more than 170,000 jobs.
The farm bill, which sailed through the Senate on Monday with $4.1 billion in food stamp cuts, will now be reconciled with the House Agriculture Committee’s bill that took a $20.5 billion bite out of the budget that feeds low income families. A full House vote is expected next week.
But according to The Hill, “Boehner and the GOP leadership are under pressure from fiscal conservatives to make deeper cuts from food stamps and from payments to producers.” How deep might the food stamp cuts go? The idea of implementing at least part of Rep. Paul Ryan [Unlink]’s 2013 budget has surfaced on Capitol Hill, which would virtually gut the program with $135 billion in cuts. That might have anti-government conservatives foaming at the mouth, but the austerity cuts come with a price. As The Nation notes, “Aside from being, well, cruel, the food stamp cuts in the Senate bill are also damaging to the economy. The Center for American Progress, in a study released in March, found that for every $1 billion cut from SNAP, 13,718 jobs are lost.” Regardless of which version of the farm bill emerges, Republicans will likely tout food stamp cuts as an achievement, while failing to admit that it does more to kill jobs than create them – a campaign promise no budget-cutting Republican has yet to fulfill. The concept of smaller government makes for great sound-bites on right wing talk shows, but they are rarely if ever connected to the job losses they cause. As Bill Clinton so astutely stated in September 2012, at the Democratic National Convention, the Republicans have a problem with “arithmetic.” No amount of number-tweaking can change the fact that every dollar taken out of the economy costs jobs, and it doesn’t really matter where the vanishing dollars come from. Author’s note: This report includes opinions and commentary based on independent analysis of official documents and public information.