THE DAILY BLADE: That ‘70s Show: Part II
Rep. Mark Kirk (R-IL), who sits on the House Appropriations Committee, is sounding the alarm that China has "canceled America's credit card" by reducing purchases of U.S. Treasury bonds, reports
China has the world's largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in U.S. Treasury bonds, more than any other country.
But Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February. …
"I'm not sure too many people on Capitol Hill realize that this is now happening," [Kirk] said. …
Kirk said he was the first member of Congress to tour the Bureau of Public Debt, which trades bonds, and was alarmed at how much debt was being bought by the US Federal Reserve due to absence of foreign investors.
Where does the money come from for the Federal Reserve to buy the public debt the Dems are piling up by the trillions? It prints the money itself (“monetizes the debt”) – which depresses the value of our currency and leads to inflation.
In a New York Times op-ed, Carnegie Mellon University professor Allan H. Meltzer, author of “A History of the Federal Reserve,” takes a walk down memory lane to the 1970s when “the Fed’s idea was to combat recession by promoting expansion, printing money and making it easier for businesses and households to borrow - and worry only later about the inflation that resulted” and makes the case that despite the short-term pain of rising unemployment and high interest rates on credit the Fed needs to “think past current political pressures” and … [f]or the next few years, they cannot neglect rising inflation.” Melzer doesn’t hold out much hope for avoiding a repeat of the Carter years, as “[t]he Fed has sacrificed its independence and become the monetary arm of the Treasury.”
Obama Giveth, Obama Taketh Away
Under the Obama administration’s $787 billion economic stimulus package, Social Security recipients beneficiaries will be receiving a one-time $250 check towards the end of the month. But senior citizens supplementing their fixed income from the government by working full or part time and qualify to receive the $400 Making Work Pay middle-class tax cuts may have to give back some or all of that $250 when they file their 2009 taxes next April, reports The Washington Times:
"This is a compliance headache that borders on being a nightmare. It's going to be complicated to reconcile these payments," said American Enterprise Institute economist Kevin Hassett. …
In the murky world of tax policy, the answer seems to be that they can't fully benefit from both, and the "surplus" has to be sent back to the government.
But there is little if any discussion of this in either the Internal Revenue Service's notices or the letter that went out to 50 million Social Security recipients last month.
"No, it's not well-known. I have seen no publicity to tell people drawing Social Security that they are not eligible for both the Social Security payment and the Making Work Pay tax credit," said Roberton Williams, senior fellow at the Tax Policy Center in the Urban Institute and a former tax analyst for the Congressional Budget Office.
"The only people who know this are those who carefully read the stimulus bill," said Mr. Williams, adding, "It's only 600 pages long."
Congressional and IRS officials say taxpayers cannot double-dip into both programs. If you are getting extra Social Security money and benefit from a lower withholding in your paycheck, the two will have to be reconciled when you file your 2009 tax returns next year.
No doubt Treasury Secretary Tiny Tim Geithner - who not only failed to pay payroll taxes on his income from the International Monetary Fund four years in a row, but also pocketed the checks his employer provided to reimburse him for paying those taxes - is in a unique position to explain to befuddled taxpayers how to avoid double-dipping.
Jack Kemp, July 13, 1935 – May 2, 2009
Irving Chais, August 22, 1925 - April 24, 2009
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