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by Amanda Anderson, Media Consortium blogger

Editor’s Note: Zach Carter is out this week, but we’ve compiled a rundown of the biggest economy-related stories, including the rise of foreclosure mills and why social security isn’t in jeopardy. Zach will be back next Tuesday, so stay tuned!

Who needs ethics when you’ve got foreclosure mills?

Want to make money quickly, but don’t want ethics to get in the way? Big banks are outsourcing their foreclosure duties to fraudulent law firms, known as foreclosure mills, and getting away with it.Zach Carter explains the latest get rich quick scheme for AlterNet. Foreclosure mills are ethically questionable law firms that process legal documents for foreclosures. They tend to have an emphasis on quantity, not quality. Carter writes:

Big banks are not outsourcing their foreclosure processing to shady law firms with a history of breaking the law for a quick buck. These foreclosure scammers forge documents, backdate signatures, slap families with thousands of dollars in illegal fees and even foreclosure on borrowers who haven’t missed a payment.

Andy Kroll chronicles the evolution of foreclosure mills for Mother Jones. Kroll also exposes a notorious Floridian law firm founded by David J. Stern that is using every trick in the book—including backdating documents and illegally charging clients massive fees—to profit from the foreclosure crisis:

While rushing foreclosures isn't illegal, Stern's fledgling firm was promptly accused of something that is: gouging people who are trying to get out of default. In October 1998, Tallahassee attorney Claude Walker filed a class-action lawsuit involving tens of thousands of claimants, alleging that Stern had piled excessive fees on families fighting to keep their homes. (Walker, who visited Stern's offices in 1999 to collect depositions, described the place as "a big warehouse" where hordes of attorneys holed up in tiny, crowded offices "like hamsters in a cage.")

 

Don’t blame Social Security for the deficit

Fact: Social Security benefits will be able to be paid, in full, through 2037.

Fact: 75% of Social Security benefits will be able to be paid thought 2084.

Fact: There is a huge surplus in Social Security trust fund- $2.5 trillion. So why the big push to trim the program? In an interview with The American Prospect, Rep. Ted Deutch (D-FL) explains his proposed legislation that will actually expand benefits:

Ninety-five percent of the people in our country [already] pay Social Security tax on 100 percent of their income. The bill provides both contribution and benefit fairness: Even as people are going to be paying in more, they're going to receive more benefits. Doing that, by the way, will also ensure the solvency of Social Security, which is terribly important.

The Fed's failure and the AIG Bailout: A brief history

In The Nation, William Greider explains how the Federal Reserve Board gambled with American taxpayers’ money by not considering alternatives to the AIG bailout. Grieder highlights a report from the Congressional Oversight Panel, which "provides alarming insights that should be fodder for the larger debate many citizens long to hear—why Washington rushed to forgive the very interests that produced this mess, while innocent others were made to suffer the consequences."

In short, the Fed acted "under the business-as-usual expectations of the private financial system, while skipping lightly over the public consequences."

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Originally posted to The Media Consortium on Tue Aug 10, 2010 at 08:52 AM PDT.

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Comment Preferences

  •  Disingenuous on Social Security. (0+ / 0-)

    Fact: Social Security benefits will be able to be paid, in full, through 2037.

    Fact: 75% of Social Security benefits will be able to be paid thought 2084.

    Fact: There is a huge surplus in Social Security trust fund- $2.5 trillion.

    That surplus in the trust fund consists of US Treasury bills. Which are IOUs to be funded by general tax revenues. In other words, 25% of Social Security benefits will eventually depend on general taxes, not Social Security payroll taxes. And a smaller % of Social Security benefits already depends on general taxes (see below).

    Now, I totally agree that as a matter of fairness, sound economics, and morality, we should collect those general taxes to fully fund promised Social Security benefits. And I also agree that it's just too soon to worry about what to do after we use up the T-bills in the trust fund in 2037 or so. But we should be honest about the fact that fully funding Social Security benefits will, for most of the next few decades, require some general tax revenues.

    This year, Social Security is cashing in some T-bills (i.e., drawing on general tax revenue) to pay full benefits. This is because payroll taxes are way down, due to high unemployment. Social Security is expected to return to surplus for a few more years (until more Baby Boomers retire), but that will only happen if employment picks up enough, and as anyone keeping up with the economic news knows, that's not looking good.

    Actuarially sound way to insure long-term health of Social Security: increase immigration. Immigrants are younger; increasing the size of the working-age population would increase payroll taxes, funding the Boomers' retirement. But that comes back to job creation....

    "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

    by HeyMikey on Tue Aug 10, 2010 at 09:19:25 AM PDT

    •  Make the rich and corporations start carrying (0+ / 0-)

      their full load that will solve the problem.  Let tax cuts expire, raise cap on SS, tax passive income over $100,000 at regular rates, put in an AMT for Corporations, and redefine hedge funds so that they do not forgo paying taxes, add a transaction tax to Wall Street...there fixed without actually affecting the average American much.  

      "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

      by lakehillsliberal on Tue Aug 10, 2010 at 09:41:50 AM PDT

      [ Parent ]

      •  I wish. But no. (0+ / 0-)

        From the Tax Policy Center, a respected left-of-center think tank:

        Washington would have to raise taxes by almost 40 percent to reduce -- not eliminate, just reduce -- the deficit to 3 percent of our GDP, the 2015 goal the Obama administration set in its 2011 budget. That tax boost would mean the lowest income tax rate would jump from 10 to nearly 14 percent, and the top rate from 35 to 48 percent. What if we raised taxes only on families with couples making more than $250,000 a year and on individuals making more than $200,000? The top two income tax rates would have to more than double, with the top rate hitting almost 77 percent, to get the deficit down to 3 percent of GDP. Such dramatic tax increases are politically untenable and still wouldn't come close to eliminating the deficit.

        http://www.taxpolicycenter.org/...

        "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

        by HeyMikey on Tue Aug 10, 2010 at 10:00:31 AM PDT

        [ Parent ]

        •  This is just speaking to individuals. The tax (0+ / 0-)

          burden used to be more heavily carried by business and it is not today.  Many of our major corporations figure out a way to pay no tax at all.  We need a major restructuring of our tax code to balance it and make it fair.

          "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

          by lakehillsliberal on Tue Aug 10, 2010 at 10:04:11 AM PDT

          [ Parent ]

          •  US corporate rates world's highest. (0+ / 0-)

            With Germany and Japan.
            http://en.wikipedia.org/...

            Shit, I sound like a Reaganite or Dubyaphile, and I am anything but.

            I am very concerned about inequality and, more importantly, insecurity for the poor and middle class. I think our current tax system is not nearly progressive enough. But I think we need to be clear about what our options are -- and aren't -- for making a more just, humane society.

            "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

            by HeyMikey on Tue Aug 10, 2010 at 03:23:16 PM PDT

            [ Parent ]

            •  Number 1_Those are not effective tax rates (1+ / 0-)
              Recommended by:
              HeyMikey

              (what people actually pay)which are very different that what is on that chart and number two even published rates are different depending on what they are paid on....ours are only paid on profits.  

              "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

              by lakehillsliberal on Tue Aug 10, 2010 at 05:17:52 PM PDT

              [ Parent ]

  •  Are they taking population loss (0+ / 0-)
    Due to climate change into account when they are doing these projections? Social Security will be in the black for much longer if our real chances of survival were taken into account.

    Help! I'm trapped in an alternate timeline.

    by Julian Domain on Tue Aug 10, 2010 at 09:55:02 AM PDT

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