What Comes After the Bailout of Portugal

By: Inoljt, http://mypolitikal.com/

Sometimes reviewing past news events can yield unexpected irony. Here, for instance, is the New York Times’ page on Portugal News. The second-to-last article, dated on January 12th is titled, Portugal Says It Needs No Bailout and Won’t Seek One. After that there is a series of optimistic articles titled, respectively, Portugal’s Bond Sale Better Than Expected, Bond Sale A Success In Portugal, Optimistic Outlook Eases Portugal’s Borrowing Costs.

Two days ago, however, came this gem: Portugal to Ask Europe For Bailout.

This bailout comes after the previous bailouts of Greece and then Ireland. The European Union has detailed a bail-out fund of approximately one trillion dollars, which can be lent to countries at lower than at-market interest rates. Originally this was meant to stop the market panic over the European sovereign debt crisis. To some extent it has succeeded in alleviating the panic.

On the other hand, it has obviously failed to contain the contagion to Greece alone.

By itself Portugal is not too big of a problem for the fund. Its economy is smaller than Greece’s; so is its population. The fund will be able to deal with Portugal, as it did with Greece and Ireland.

The question is, however, what comes next. With the bailout of Portugal, all eyes are looking towards Spain. This is the market’s next target.

A bailout of Spain would be a magnitude more difficult than the previous bailouts. Its economy is far bigger; more than a trillion dollars in GDP. This is four to five times bigger than Greece. It has a population of 46 million, several times that of Greece.

It would be very difficult and extremely expensive to rescue Spain’s 1.4 trillion dollar economy, unlike the relatively cheap rescues so far enacted. The bailout might perhaps or probably be impossible.

In other words, the eurozone has almost reached the end of its line. In the summer of 2010, during the height of the Greek crisis, analysts worried not about Greece but about Spain (and Italy after Spain). Spain was the big fish, the debt-ridden country in a recession big enough to pull down the euro. The fear was that Greek bankruptcy would set off a chain reaction, moving from Greece to Ireland to Portugal and finally to Spain.

Well, Greece, Ireland, and Portugal have asked for a rescue, and it has come down to Spain. Spain must not fall.

 

 

Weekly Pulse: What Would Jesus Insure?

By Lindsay Beyerstein, Media Consortium blogger

Christian groups are trying to create a run around health care reform by setting up alternative, unregulated religious health care bill collectives—and movement conservatives are cheering them on.

Religious right-watcher Sarah Posner reports on so-called Christian health care-sharing ministries in the American Prospect. Health-sharing ministries (HCSM) bill themselves as godly alternatives to health insurance. HCSM are groups of Christians who promise to cover each other’s heath care costs. About a hundred thousand people nationwide belong to these collectives. The Alliance of Health Care Sharing Ministries and its army of lobbyists convinced Senate lawmakers to exempt HCSMs from health care reform’s individual mandate.

Obliterating patient privacy

According to Posner, anti-reform conservatives are talking up these groups because they see them as a way to undermine the individual mandate. But if you think HCSM are a convenient loophole to avoid paying for insurance, think again. Posner describes the criteria for joining Samaritan Ministries International (SMI), one of the largest HCSM:

“To join the HCSM, applicants must agree to a statement of faith that they are a ‘professing Christian, according to biblical principles’ set out in Romans 10:9-10 and John 3:3. They must agree to adhere to guidelines that include no sex outside of “traditional Biblical marriage,” no smoking or drugs, and mandatory church attendance.

SMI members pay their own health care costs out of pocket and seek reimbursement from the group. What about privacy? In order to get reimbursed, they have to publish their health care “needs” in a monthly newsletter and hope someone sends cash. Lifetime benefits are capped at $100,000. Members waive their right to sue for any reason. SMI won’t cover treatment for sexually transmitted diseases, addictions, or the pregnancies of single mothers.

It doesn’t take a genius to see that this free-for-all won’t end well. You can’t just start a quasi-health insurance scheme in your garden shed and expect it to work out. Real insurance companies are subject to oversight to make sure that they have enough money on hand to cover their claims. Who knows what HSCM are doing with people’s money? These outfits have all the disadvantages of private insurers and none of the benefits. Members are a single major illness away from bankruptcy.

Bartering for health care?

Speaking of wacky alternatives to health insurance, Sen. Harry Reid’s (D-NV) main Republican challenger, Sue Lowden, insists that patients can pay for their health care via a barter system, as Rachel Slajda reports for TPMDC. Great! How many chickens for an appendectomy?

Medicare expansion doesn’t equal bankruptcy

At Mother Jones, Kevin Drum debunks the latest right-wing myth about health care reform, that Medicare expansion will bankrupt the states. States pay part of the cost of Medicare, so it’s true that any expansion of the program will cost the states some money. However, the talking point is that the expansion will push state budgets to the breaking point. That’s false.

Drum explains that the health care reform bill exempts states from the extra cost until 2016. Even after that, the costs to the states will be minimal:

“[Health care reform] won’t cost states an extra dime through 2016, by which time our recession will presumably be over, and even after that states will only pay for a tiny fraction of the increased costs. As CBPP points out, states will pay about 4% of the total costs of Medicaid expansion over the next ten years. This represents an increase in overall state Medicaid spending of slightly over 1%.”

Abortion and ‘convenience’

Jessica Valenti of Feministing has been taking on manipulative, anti-choice ads in the New York City subway. These ads are sponsored by an anti-abortion group. They feature various distraught-looking models staring wistfully into space. The tagline is “Abortion Changes You.” The message is that if you have an abortion, you will be a guilt-racked wreck for the rest of your life. Some feminist with a wry sense of humor and a little glue pasted in another sentence on the ad (pictured above): “Now I can go to college and fulfill my dreams.”

Anti-choice blogger Lori Ziganto was scandalized by the anonymous culture jammer’s message. She sneered at the idea that women’s lives and hopes actually matter: “Want to go to college, but there is a pesky baby growing inside of you? Abort! A life is far less important than your co-ed fun and career plans, right?”

Valenti’s response: “It isn’t that anti-choicers don’t understand why women get abortions – it’s that they care so little about women’s lives that any reason given to obtain an abortion is seen as “convenient.” Some things that are convenient: Providing for your existing children. Going to college. Having enough money to eat, pay rent, keep the electricity on. Not dying.”

HSCMs and the subway ads are part of an enormous rift in contemporary politics: Opponents of health care reform say that they’re defending freedom, but in reality, they’re advocating control.

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

 

Weekly Pulse: What Would Jesus Insure?

By Lindsay Beyerstein, Media Consortium blogger

Christian groups are trying to create a run around health care reform by setting up alternative, unregulated religious health care bill collectives—and movement conservatives are cheering them on.

Religious right-watcher Sarah Posner reports on so-called Christian health care-sharing ministries in the American Prospect. Health-sharing ministries (HCSM) bill themselves as godly alternatives to health insurance. HCSM are groups of Christians who promise to cover each other’s heath care costs. About a hundred thousand people nationwide belong to these collectives. The Alliance of Health Care Sharing Ministries and its army of lobbyists convinced Senate lawmakers to exempt HCSMs from health care reform’s individual mandate.

Obliterating patient privacy

According to Posner, anti-reform conservatives are talking up these groups because they see them as a way to undermine the individual mandate. But if you think HCSM are a convenient loophole to avoid paying for insurance, think again. Posner describes the criteria for joining Samaritan Ministries International (SMI), one of the largest HCSM:

“To join the HCSM, applicants must agree to a statement of faith that they are a ‘professing Christian, according to biblical principles’ set out in Romans 10:9-10 and John 3:3. They must agree to adhere to guidelines that include no sex outside of “traditional Biblical marriage,” no smoking or drugs, and mandatory church attendance.

SMI members pay their own health care costs out of pocket and seek reimbursement from the group. What about privacy? In order to get reimbursed, they have to publish their health care “needs” in a monthly newsletter and hope someone sends cash. Lifetime benefits are capped at $100,000. Members waive their right to sue for any reason. SMI won’t cover treatment for sexually transmitted diseases, addictions, or the pregnancies of single mothers.

It doesn’t take a genius to see that this free-for-all won’t end well. You can’t just start a quasi-health insurance scheme in your garden shed and expect it to work out. Real insurance companies are subject to oversight to make sure that they have enough money on hand to cover their claims. Who knows what HSCM are doing with people’s money? These outfits have all the disadvantages of private insurers and none of the benefits. Members are a single major illness away from bankruptcy.

Bartering for health care?

Speaking of wacky alternatives to health insurance, Sen. Harry Reid’s (D-NV) main Republican challenger, Sue Lowden, insists that patients can pay for their health care via a barter system, as Rachel Slajda reports for TPMDC. Great! How many chickens for an appendectomy?

Medicare expansion doesn’t equal bankruptcy

At Mother Jones, Kevin Drum debunks the latest right-wing myth about health care reform, that Medicare expansion will bankrupt the states. States pay part of the cost of Medicare, so it’s true that any expansion of the program will cost the states some money. However, the talking point is that the expansion will push state budgets to the breaking point. That’s false.

Drum explains that the health care reform bill exempts states from the extra cost until 2016. Even after that, the costs to the states will be minimal:

“[Health care reform] won’t cost states an extra dime through 2016, by which time our recession will presumably be over, and even after that states will only pay for a tiny fraction of the increased costs. As CBPP points out, states will pay about 4% of the total costs of Medicaid expansion over the next ten years. This represents an increase in overall state Medicaid spending of slightly over 1%.”

Abortion and ‘convenience’

Jessica Valenti of Feministing has been taking on manipulative, anti-choice ads in the New York City subway. These ads are sponsored by an anti-abortion group. They feature various distraught-looking models staring wistfully into space. The tagline is “Abortion Changes You.” The message is that if you have an abortion, you will be a guilt-racked wreck for the rest of your life. Some feminist with a wry sense of humor and a little glue pasted in another sentence on the ad (pictured above): “Now I can go to college and fulfill my dreams.”

Anti-choice blogger Lori Ziganto was scandalized by the anonymous culture jammer’s message. She sneered at the idea that women’s lives and hopes actually matter: “Want to go to college, but there is a pesky baby growing inside of you? Abort! A life is far less important than your co-ed fun and career plans, right?”

Valenti’s response: “It isn’t that anti-choicers don’t understand why women get abortions – it’s that they care so little about women’s lives that any reason given to obtain an abortion is seen as “convenient.” Some things that are convenient: Providing for your existing children. Going to college. Having enough money to eat, pay rent, keep the electricity on. Not dying.”

HSCMs and the subway ads are part of an enormous rift in contemporary politics: Opponents of health care reform say that they’re defending freedom, but in reality, they’re advocating control.

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

 

Weekly Audit: Fixing the Foreclosure Problem

by Zach Carter, TMC MediaWire blogger

The U.S. job market may be showing signs of life, according to a report issued by the Labor Department on Friday.  The unemployment rate dropped in July, something no economist expected. Under the most optimistic interpretation, the news indicates that the worst of the recession is finally behind us. But the scenario isn't really so rosy, as our government has yet to relieve the foreclosure pandemic. Even if unemployment is leveling off, there will be no economic recovery if the the foreclosure problem isn't fixed.

July's unemployment rate only fell from 9.5% to 9.4%, and even the most bullish Wall Street economists think the rate will hit double digits by the end of the year. The fact that July's tiny drop in unemployement counts for good economic news says a lot about how severely the economy has deteriorated over the past year and a half.

But when you dig a little deeper, the numbers get worse. As Tim Fernholz explains for The American Prospect, even though the unemployment rate dropped, the nation's economy actually shed 247,000 jobs in July. The rate was pushed down because 400,000 people gave up looking for a job in July; as such, they are no longer included in the statistic. So, while we "only" lost 247,000 jobs, we also lost 400,000 workers.

The government also adjusts its job loss figures for seasonal developments. When the Labor Department says we lost 247,000 jobs in July, that isn't the actual number--it's the number relative to what the Department considers a normal July. This summer has been unique for the U.S. economy, and especially in the case of the automobile industry. Auto companies usually lay off workers in the summer: The factories close while companies prepare the next year's models. So many factories were already closed earlier this year that the seasonal shutdowns haven't really happened this summer. Even though car companies laid people off in July, the government's seasonally adjusted numbers marked an increase in car manufacturing jobs.

Things get even more complicated when you include the Cash for Clunkers program, which started on July 24. The plan offers people up to $4,500 to trade in their gas guzzlers for more fuel efficient new car. Whether the program helps the environment is somewhat controversial, but there is no doubt that it has created a lot of unusual demand for new cars. As Ed Brayton notes for The Michigan Messenger, the government's plan to pump an additional $2 billion into the program has analysts predicting a big boost for manufacturers in July and August.

So we don't really know if the labor market actually improved last month, or if the report is just an exaggeration of statistical anomalies resulting from the recession itself, or even some of the government's recovery efforts. But as Steve Benen notes for The Washington Monthly, even if the numbers come with a healthy dose of uncertainty, it's still better to see them come in good than bad. "There hasn't been encouraging news on the job front in quite a while, and given the severity of the economic crisis, today's report offers at least some relief," Benen says. "The job numbers beat expectations, the overall unemployment rate declined, earnings went up, and the manufacturing sector improved."

But even if unemployment is finally slowing down, the housing market remains awful. Foreclosures are significantly outpacing the administration's efforts to help troubled borrowers. The Treasury Department released a report last week indicating that only about 9% of the borrowers eligible for relief under the government's anti-foreclosure plan have actually received any aid--and even here the numbers are juiced to make the program look better. The administration only includes borrowers who are already at least two months behind on their mortgage payments in the group of eligible borrowers, when in fact any borrower in danger of "imminent default" is supposed to be eligible. Much of the problem, as I argue in a piece for Salon, is that the plan relies on private-sector debt collectors to identify distressed homeowners and get them help, something these companies have never been very interested in doing. All in all, just 235,247 borrowers have received assistance under the Obama plan, while foreclosures increased to 1.5 million in the first six months of 2009, with 2.4 million expected for the entire year and 9 million by 2012.

Writing for Mother Jones, Andy Kroll emphasizes that a much better policy option is available than the current tack. Rather than ask the banking industry to voluntarily adopt the administration's plan without any consequences, we should put "homeowners' fate in the hands of a neutral arbiter, like a bankruptcy court judge . . . [It] would go a long way toward stemming the tide of foreclosures," Kroll writes.

Thanks to a bizarre legal loophole, mortgages cannot be modified in a bankruptcy proceeding if the owner actually lives in the house (investment properties, on the other hand, can be written off). In other words, if a predatory loan is driving you bankrupt, a judge can't do anything about it in bankruptcy court. Congress has tried to change this rule a few times over the past year, but the bank lobby has stymied those efforts. The most recent legislative push failed overcome a Senate filibuster in April, but the political momentum may be changing as foreclosures get increasingly out of hand.

As Mike Lillis notes for The Colorado Independent, Sen. Dick Durbin, D-Ill., plans to bring back the legislation if the banking industry doesn't get serious about helping borrowers fast. Many of the companies letting borrowers fall into foreclosure received billions of dollars in bailout money over the past year, and some even agreed to help borrowers as a condition for taxpayer support. But reform doesn't just depend on the banks. Peter Dreier argues in The Nation that citizens need to publicly protest for stronger economic reforms.

Foreclosures are terrible for the economy. They wreak havoc on families' lives, wipe out personal savings, lower the value of neighboring properties and put more homes on the market, further lowering home prices nationwide. If we cannot stop foreclosures, the economy cannot recover. If job losses are finally moderating, that's great news. But it would be much better to see job losses stabilize and see the banks we bailed out actually do something to avert foreclosures.

This post features links to the best independent, progressive reporting about the economy and is free to reprint. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.

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