Illinois Debt Dinged Up in Game of ‘Kick the Pension Can’

Jun 7, 2013, 12:50 pm EDT

With apologies to Detroit’s $15.7 billion long-term debt, and the budget problems in California that led Stockton to become the largest U.S. city ever to file bankruptcy, Illinois might be in the worst financial shape of any city or state in the country.

The issue is Illinois has racked up nearly $100 billion — yes, with a “B” — in unfunded state employee pension liabilities.

As a result, Fitch downgraded the state’s already-lowest-in-the-nation credit rating even further Monday. Moody’s followed suit Thursday, also citing its belief that nothing will change on the pension front anytime soon. These downgrades come days after the state legislature adjourned for the summer without addressing the unpaid obligations it owes, though the situation has become so dire, Illinois Gov. Pat Quinn has called the state Congress back for a June 19 special session. Read 

Surprise! The Government Is Spying on Your Online Accounts

Jun 7, 2013, 9:17 am EDT

A U.S. government surveillance agency has gained unprecedented access to Americans’ digital communications.

Under a program called PRISM, the National Security Agency (NSA) has been able to compile data on virtually every bit of electronic communications conducted by U.S. citizens. The revelations are found in a classified PowerPoint presentation leaked to the U.K.’s Guardian. According to the document, data is collected “directly from the servers” of leading digital services providers.

Included in the data available to the NSA is email content, Internet search histories, videos and photos shared online, chat conversations and file uploads and downloads. Disclosure of the PRISM program is likely to renew debate over measures found in the Patriot Act, passed by Congress in the wake of the 9/11 attacks that broadened government surveillance powers. It will also likely spur a reappraisal of the FISA Amendment Act, which extended the governments powers, adopted last year over vocal objections from some lawmakers. Read 

The CFPB’s Outrageous White Paper on Payday Lending

Jun 7, 2013, 8:14 am EDT

The payday lending industry has taken the Consumer Financial Protection Bureau at its word from the beginning — that the bureau would fairly examine the industry and work with it as far as deciding whether additional rulemaking was necessary.

Although the rhetoric out of the bureau over the past three years has been even-handed, the industry privately expressed concern that the bureau would overreach and enact so many new regulations that it might kill the product.

Now, what might one expect of an Obama appointee? Given the culture of intimidation and Saul Alinsky-style demonization of opponents, the payday loan industry got exactly what it should have anticipated. Read 

Why We Need to Eliminate the Home Mortgage Interest Deduction

Jun 5, 2013, 5:19 am EDT

As Congress continues to consider comprehensive tax reform in the face of a long-term deficit problem, one of the most sacred cows of the tax code actually appears to be on the radar of would-be reformers.

The House Ways and Means Committee held hearings last month on how to wean homeowners off the federal mortgage subsidy known as the Home Mortgage Interest Deduction. This tax expenditure allows taxpayers to deduct up to $1 million of the interest they pay on their home mortgage, for both their primary and secondary homes. Homeowners also can deduct the interest on home equity loans of up to $100,000.

The HMID has been around for about 100 years and seems to be an intractable part of the American psyche. If you are a homeowner, you have likely done the math yourself and realized that, “because of the tax deduction,” you are better off owning than renting. Read 

Obama Nominates Former Bush Official For FBI Post

Jun 4, 2013, 7:36 pm EDT
Obama Nominates Former Bush Official For FBI Post

President Barack Obama announced that he will nominate former George W. Bush Justice Department official James Comey to head the FBI.

Comey previously served under Bush as deputy attorney general from 2003-2005. He has also served as an assistant United States attorney in Manhattan, oversaw the Virginia U.S. attorney’s office where he rolled out a successful gun violence program that drastically reduced Richmond, Va.’s murder rate, and eventually became the U.S. attorney for the Southern District of New York.

It was there that Comey tried some of the most high profile criminal cases of his career, including executives involved in WorldCom’s accounting scandal and Martha Stewart‘s (NYSE:MSO) insider trading case. Read 

Obama Takes Aim at ‘Patent Trolls’

Jun 4, 2013, 7:29 pm EDT
Obama Takes Aim at ‘Patent Trolls’

President Barack Obama is pushing Congress to pass legislation designed to reduce ‘patent trolling‘ — lawsuits filed by companies that only exist to purchase patents and go to court with other companies.

The move comes as Obama prepares to visit Silicon Valley for fundraising this week. Silicon Valley is home to some of the most patent-dependent companies in the United States — companies that have been pushing the government for patent reform.

Among these are Cisco Systems (NASDAQ:CSCO), Apple (NASDAQ:AAPL), and Google (NASDAQ:GOOG), who have been clamoring for legislation that would reduce the number of times each year they are sued for infringement. Read 

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