Financial Crisis

[Naam]

Americans had to work from January 1 to August 12 this year just to cover cost of government.

CNS Posted 2009 Aug 15 (Cached)

Well thats smart

well, that's not smart but nonsense. a zillion americans do not pay a single penny income tax.

[12DrinkMore]

well, that's not smart but nonsense. a zillion americans do not pay a single penny income tax.

I must have told you a million times not to exaggerate. Anyway, there are not a zillion Americans on the globe, thank god. And the long reaches of the IRS covering the global income of every US citizen far exceed that of das deutsche Steueramt, which hasn't been as zealous in collecting it's pound of flesh from the Germans with bank accounts in Switzerland, yet....

[AlexLah]

And in Thailand for example people still go on the street and are prepared to risk their lives if they feel they are being cheated (not meant to have a discussion about red and yellow shirts please).

the truth is that people in Thailand go on the street for a couple of free meals and an additional few hundred Baht in their pockets. this and free transportation from far away areas, paid for by those who have vested interests, goes without saying. anybody believing something different is a dreamer.

p.s. i am not referring to the rare cases of strikes or factories closing where employees demonstrate without getting paid from certain sources.

Sorry Naam you are (partly) wrong. I know many Thai people that attended the protest without being paid, my GF included. Can you show any evidence that show people that attended were payed? Pictures or any other evidence please.

[12DrinkMore]

There is still no definite answer and probably will never be about what was the cause of the Great Depression. The main arguments are all on wiki

http://en.wikipedia.org/wiki/Great_Depression

But there does seem to be a general consensus about the cause of the current mess. Namely deregulation of the finance industtry and the immense mountain of debt that has been built up, all in the name of creating profit for the banks. There is still a little dispute about what level of debt is affordable, but with the current QE policies of the UK and US is would appear that this is for a nation limitless, until maybe the Asians refuse to stump up their contribution. And for the individual it is how much interest you can pay after the basic living necessities have been paid; "debt slaves" for life.

So now the big boys of the central banks, actually primarily Bernanke, have immersed themselves a bath of self-worship. It has been Bernanke's greatest desire since he studied economics to pull the untried and unproven levers of ZIRP and QE. Now, through the Greenspan/Bernanke bubble he has had his opportunity (and I still wonder how much they let the bubble blow up so that Bernanke could try out the "levers"). Well now he claims success, and in the process also claims that massive central bank reaction, primarily by the FED, can put the world's economy back on the rails. Well, yeah, if this is the case, then why couldn't moderate central bank action also keep the world's economy on the rails?

But anyway, the banks, well at least the important classmates of Bernanke & Co have been let off the hook and allowed to carry on as before. WHAT THE fuc_k! Yes, as before.

http://www.atimes.com/atimes/Global_Economy/KH21Dj02.html

Last week, the Fed left its key short-term rates frozen at 0 to 0.25%, enabling banks to borrow at near zero and reap spreads as high as 6% to 24%. The Fed also continued its policy of paying interest on banks' reserves, further boosting Wall Street's bottom line. The government has decided to save the banks, no matter how much the public has to suffer.

Worse still, the administration has been largely silent over the obscene bonuses paid by banks to the very executives whose casino mentality caused a financial crisis that the International Monetary Fund now estimates has cost the world some US$7 trillion. At financial firms that have received bailout money, it has been estimated that thus far in 2009 bonuses paid to executives have exceeded profits.

For us normal peeps is there nothing left to hope for?

So far the ONLY indicators we are being fed that the "economies" are improving are

1. The financial system has been rescued from some horrible systemic failure. Which maybe even have been better, as surely other economic enterprises would have developed and taken over the "old brigade"?

2. The housing market is "bottoming out"? Yeah, <deleted>, the housing market is not a source of long term financial prosperity.

3. The unemployable numbers are increasing at a lesser rate than a month ago. Please can somebody help me, surely increasing means increasing?

4. The stock market roulette wheel has, not because of actual production increases, not because of increased dividends, not profit increases, but because IMO the banks are spending some of the low interest QE and taking the rest of the investors to the cleaners, again in another bubble.

Oh, and add on a couple of bullshit, "opinion polls".

Maybe it has gone so far that the US and UK governments consider that the finance sector IS the economy and that is all that counts?

Which now brings me to this can of worms.

How is it possible that a collapse of AIG should be prevented? Or indeed any bank be bailed out? We have our Leaders going on about systemic collapse of the finance system. But really, is that what we face? Surely, IMO, a few of the "too big to fail" would have failed. But so what? It would have unwound all the crap trillions of derivatives still floating around and we would know where we stand. A liability created by the banks on our backs, the magnitude we still don't know and never will. Bernanke could still have produced enough liquidity to keep the "real production" economy running.

All that has really happened is that a huge band-aid has been applied and we live in futile hope that the banks will "sort it out" themselves. Which isn't going to happen. All the "old banking colleagues" will carry on and continue to screw us. They have now seen that they will not be allowed to fail, so it's back to the roulette wheel, fully backed up by the tax payer. Jesus, what a a bunch of ineffective and submissive bunch the politicians are.

But anyway, please can somebody explain where the "wealth"of a fund comes from when they "make millions as the market goes down" and the repeat the same as the market goes up. Who is the counter party who coughed up this "wealth", or is the stock market an inexhaustible source of infinite wealth. Why do I have a nasty feeling that the rest of us pay for the gambling?

An example, a dealer gets a "modest" 400,000 whatevers as a bonus and buys a house and car because he has made 2,000,000 whatevers. WHO has paid for his house and car?

Edited August 22, 2009 by 12DrinkMore

[Abrak]

12Drinmore,

I just couldnt agree with your post more.

However you look at things two words stick out 'DEREGULATION' and 'MORAL HAZARD' (Ok its 3). They are really one and the same. Bankers are gambling with taxpayers money. How else does GS gear 30x (and if I was going to let anyone gear 30x it would be GS).

And at the end of the day what has happened - there has been no reregulation and moral hazard has increased. Read Bernanke's 'we saved the world' speech and there is not one iota of evidence that he believes that deregulation or poor lending practices actually contributed to the crisis or that when then next crisis happens he will be unwilling to bail out those who bet with tax payers money.

It is axiomatic that if you are too big to fail (losses will be born by the tax payer) you have to be subject to some regulation.

[teletiger]

A big contributer will be your pension funds. If you retire penniless....move in with a banker.

Regards.

[flying]

How is it possible that a collapse of AIG should be prevented? Or indeed any bank be bailed out? We have our Leaders going on about systemic collapse of the finance system. But really, is that what we face? Surely, IMO, a few of the "too big to fail" would have failed. But so what? It would have unwound all the crap trillions of derivatives still floating around and we would know where we stand. A liability created by the banks on our backs, the magnitude we still don't know and never will. Bernanke could still have produced enough liquidity to keep the "real production" economy running.

All that has really happened is that a huge band-aid has been applied and we live in futile hope that the banks will "sort it out" themselves. Which isn't going to happen. All the "old banking colleagues" will carry on and continue to screw us. They have now seen that they will not be allowed to fail

Good post I agree & not only that but the fact that as we prop these National too big too fail banks we are quickly losing all the regional banks. The regional banks held their bad loans as whole loans if we wanted to help someone they are who we should have helped. At least in helping them bad assets would actually have diminished.

It is hard to believe but as far as I can tell ...The same has not occurred elsewhere. The big boys who took TARP did a lot of passing the $$$ to each other but the bad assets now sliced & diced are still there. The money was not directly used to pay them off. Instead lets face it the money went to try & re-inflate the asset bubble. Hence the pretty stock market we have seen. But it cannot survive because it is built with unsustainable liquidity pumped in by the FED.

Also the regional banks are the real banks. Yes many will say they are too small to succeed. But they are not the National banks that had operators calling millions of folks offering them credit regardless of their credit worthiness. Also they did not loan crazy money to folks on false appraisals because they are local banks that actually see the properties they are mortgaging. Hard to believe but they are the REAL banks and I think it is a sham we let them fail & keep the big crooks. Could it be anymore blatant than it is? The FED is all related to the too big too fail & most held jobs there before moving to the FED. This is one area I would rather see Anarchy than what we have currently....really

In the end we will have only the too big too fail then what? Then its Too few to fail?

They need to allow bankruptcy to occur, and there are a lot of bad investments in the system that need to work their way through the system. Unless that is allowed to happen, government is going to continue to bailout to the tune of trillions and trillions of dollars to noncredit-worthy organizations.... In the long run those investments are going to bankrupt the country and destroy the dollar as a currency unit.

Edited August 22, 2009 by flying

[12DrinkMore]

And the expansion of the derivative market, which was itself a major cause of the current mess, was basically encouraged by Greenspan. Although he has now stated

http://en.wikipedia.org/wiki/Alan_Greenspan

In Congressional testimony on October 23, 2008, Greenspan acknowledged that he was "partially" wrong in opposing regulation and stated "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity — myself especially — are in a state of shocked disbelief."[23] Referring to his free-market ideology, Greenspan said: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.” Rep. Henry Waxman (D-CA) then pressed him to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Waxman said. “Absolutely, precisely,” Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.” [64] Greenspan admitted fault[65] in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.

I suppose the question is whether lending institutions have been interested in protecting shareholders' equity or their own bonuses. The same question, could indeed, be asked of any major company, as the board of directors is rarely, if ever, challenged over it''s decisions to award bonuses and pension benefits. And the big question is <deleted> the shareholders do not bother to do anything.

[flying]

Common Sense 2009

The American government -- which we once called our government -- has been taken over by Wall Street, the mega-corporations and the super-rich. They are the ones who decide our fate. It is this group of powerful elites, the people President Franklin D. Roosevelt called "economic royalists," who choose our elected officials -- indeed, our very form of government. Both Democrats and Republicans dance to the tune of their corporate masters. In America, corporations do not control the government. In America, corporations are the government.

Full article here

http://www.huffingtonpost.com/larry-flynt/...9_b_264706.html

[12DrinkMore]

How else does GS gear 30x (and if I was going to let anyone gear 30x it would be GS).

If they are gearing at that level, a level which IMO is far too high, then surely they should be paying an enormous amount of their profits back to the US tax payer because of the implied and now explicit bailout when it all fails?

But I am still unclear who actually coughs up the USDs when these guys with multi-million bonuses, back up with tax payer guarantees, buy their houses and cars.

[Abrak]

And the expansion of the derivative market, which was itself a major cause of the current mess, was basically encouraged by Greenspan. Although he has now stated

http://en.wikipedia.org/wiki/Alan_Greenspan

In Congressional testimony on October 23, 2008, Greenspan acknowledged that he was "partially" wrong in opposing regulation and stated "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity — myself especially — are in a state of shocked disbelief."[23] Referring to his free-market ideology, Greenspan said: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.” Rep. Henry Waxman (D-CA) then pressed him to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Waxman said. “Absolutely, precisely,” Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.” [64] Greenspan admitted fault[65] in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.

I suppose the question is whether lending institutions have been interested in protecting shareholders' equity or their own bonuses. The same question, could indeed, be asked of any major company, as the board of directors is rarely, if ever, challenged over it''s decisions to award bonuses and pension benefits. And the big question is <deleted> the shareholders do not bother to do anything.

No 12Drinkmore it is very important to realize that shareholders are benefiting too. If as a shareholder I can finance my business without having to absorb any losses that might arise I can raise debt without having appropriate amounts of equity.

So moral hazard is not just in the interest of employees, it is very much and essentially in the interests of shareholders.

This is a very important point. If employees simply took advantage of shareholders there really would be no need to reregulate only for shareholders to learn to not be so foolish. The very important point here is that shareholders (and to a degree the employees) took advantage of the moral hazard at the expense of taxpayers.

[12DrinkMore]

http://www.huffingtonpost.com/larry-flynt/...9_b_264706.html

Well, maybe, there are a lot of points to be answered in that tirade.

But did Kissinger really come up with

Henry Kissinger refers to us as "useless eaters."

If he did then I would lose at lot of respect for that man.

[flying]

But did Kissinger really come up with

Henry Kissinger refers to us as "useless eaters."

If he did then I would lose at lot of respect for that man.

I think he was always claimed to have said it but in reality did not but.....

I did see this....

Although the term "useless eaters" began sometime after Malthus propagated his theories of overpopulation, this article is the thing that the Kissinger quote is drawn from. I doubt that the actual words were said, but the sentiment is the same. http://www.scribd.com/doc/7423676/NSSM-2…

Edited August 22, 2009 by flying

[12DrinkMore]

No 12Drinkmore it is very important to realize that shareholders are benefiting too. If as a shareholder I can finance my business without having to absorb any losses that might arise I can raise debt without having appropriate amounts of equity.

So moral hazard is not just in the interest of employees, it is very much and essentially in the interests of shareholders.

This is a very important point. If employees simply took advantage of shareholders there really would be no need to reregulate only for shareholders to learn to not be so foolish. The very important point here is that shareholders (and to a degree the employees) took advantage of the moral hazard at the expense of taxpayers.

Maybe I am confusing a few issues here.

Perhaps GS management are the majority of the shareholders so there is no conflict between shareholders and management.

Or when a finance company awards it's employees in bonuses more than the company profits somehow the shareholders are happy with this? But why?

Or, in the case of RBS "Fred the Shred" after just a couple of years at the helm ran the bank into insolvency and managed to award himself as a pay off more than a lifetime's earnings of a normal sheeple every year.

At some point the shareholders have lost the ability to decide what goes on, and the "board of directors" supposedly representing the shareholders have become ineffective due to their own self interest.

[flying]

Or, in the case of RBS "Fred the Shred" after just a couple of years at the helm ran the bank into insolvency and managed to award himself as a pay off more than a lifetime's earnings of a normal sheeple every year.

At some point the shareholders have lost the ability to decide what goes on, and the "board of directors" supposedly representing the shareholders have become ineffective due to their own self interest.

Dont know for sure but, Maybe it is a case of the golden handcuffs when hired? Or golden parachutes as referred to by the execs themselves for when they are fired.Where the company made the agreement when they brought the execs on. If not then the shareholders should be reminded of their right to file law suits

Edited August 22, 2009 by flying

[sokal]

What now Ben?

what would those know-it-all have done better? if they had the power to do something, respectively doing nothing because that is what most of these bloody clowns proposed in the media, we would be in exactly the mess that the resident and non-resident apocalyptic doom&gloom riders have predicted only a few months ago. in hindsight it is easy to criticise and have a big mouth.

fact is that Bernanke et al used a pragmatic approach to deal with a crisis. perhaps mistakes were made, perhaps other ways would have led to the same or an even better result. but until now there is no evidence that the applied approach did not work and nobody (except perhaps my good friend Alex Lah ) is able to predict what the future holds for most of us. that is... if Alex stays away from the fridge where he keeps his Chang.

my ranting also applies to those who blame Obama for the shit² his predecessor, guided by the puppetmasters in the background, has produced. the "n-word" in the White House is a thorn in their àsses and it was clear from the beginning that that the closet ku-klux-claners will blame him for anything that might go wrong, be it the distinction of a rare species of cockroaches on a remote island in the south pacific or that the sex drives of the penguins in Patagonia has been greatly reduced by the melting of the polar icecaps.

all afore-said of course in my [not so] humble opinion

I would have raised interest rates in 2005 and kept raising them till now. How many people would have piled on this much debt if it cost more money to borrow ?

How many people would risk their money in other investments if they could get a decent return(4-5%) on money in their savings account ?

The bottom line is that Ben Bernanke and Allan Greenspan are SH*TY keynesian central bankers.

[flying]

While I do not expect anymore than a song & dance it would be interesting to read if & when answered

Presented by the Wall Street Journal

These are the top questions being posed to Lil' Timmy. Dialogue will be posted August 25th.

Top Geithner Questions

* Why has the federal reserve bank never been audited? (+1133 diggs, submitted by Borez)

* Goldman Sachs is a large, profit seeking company which you were/are a part of. Isn't it a conflict of interest to funnel tax dollars into this private company using your new power as Secretary of the Treasury, keeping in mind that you and your old buddies benefit monetarily? Maybe I'm mistaken, but isn't this a textbook example of political corruption? (+729 diggs, submitted by larryjr88)

* What is your position on Ron Paul's House Resolution 1207? (Which as of the writing of this question has 282 cosponsors.) http://www.auditthefed.com/ (+713 diggs, submitted by Motobike_man)

* You failed to pay some of your federal taxes in 2001. And in 2002. And in 2003. And in 2004. Please explain. (+690 diggs, submitted by zwendkos)

* How do you feel about the revolving door between high job positions in the treasury and Goldman Sachs? (+581 diggs, submitted by keythb)

* Last week you requested that Congress raise the $12.1 trillion statutory debt limit, saying that it could be breached as early as mid-October. This is in addition to the increase already approved in February this year to accommodate the added debt from the $787 Billion stimulus plan. How is this anything other than runaway government spending? What will it take for us to see US debt go the other direction? (+520 diggs, submitted by bossm4n)

* Why is the government only supporting aging and increasingly obsolete car makers? You've given an extraordinary amount of money to GM, but the government has failed to encourage new, innovative, and cleaner forms of personal transportation such as produced by Tesla Motors. Why has TARP money not been invested in companies such as Tesla, and will the government support similar companies in the future? (+439 diggs, submitted by danielrh9)

* Are you, yourself, troubled by the massive amount of government spending? What do you think will happen to the dollar over the next 10 years? (+376 diggs, submitted by erikwithaknotac)

* You are a member of the Federal Reserve, a group that so thoroughly mismanaged our monetary policy that they helped create a massive housing bubble because of foolish loans and speculation enabled by low interest rates, and then you were involved in a horribly mismanaged bailout that hasn't freed up credit markets and can't even account for all the money it spent. Why are you running the Treasury Department? (+358 diggs, submitted by zwendkos)

* You've amended your tax returns for the years 2001, 2002, 2004, 2005 and 2006 and found that you've owed an additional $31,536 (http://finance.senate.gov/press/Bpress/2009press/p ... Giving you the benefit of a doubt (that you are neither inept nor corrupt but were simply overwhelmed by an overly complex system), what recommendations do you have for simplifying the tax code? (+350 diggs, submitted by steamer25)

http://digg.com/dialogg/Timothy_Geithner_1

Edited August 22, 2009 by flying

[flying]

At some point the shareholders have lost the ability to decide what goes on, and the "board of directors" supposedly representing the shareholders have become ineffective due to their own self interest.

PS: 12 look.......Even GS is scared about perception

“Blankfein is scared to death about what might happen when the bonus numbers hit,” one executive says.

How worried are Goldman Sachs executives about their ability to manage the coming media tsunami when bonus season comes around?

Paranoia might not be too strong a word to describe the mind-set. People inside Goldman tell me that some senior executives say they believe the onslaught of negative stories detailing Goldman’s manifold ties to upper levels of government, charges that it somehow fraudulently profited from the subprime crisis, and now the press about the firm’s record earnings is so out of proportion to reality that the coverage contains an element of anti-Semitism—subtly playing off the racist myth of a conspiracy of Jewish bankers controlling the world for their own benefit. (Goldman was founded by a Jewish immigrant, and after years of being run by Gentiles Jon Corzine and Hank Paulson, is once again run by a Jew, Lloyd Blankfein.)

http://www.thedailybeast.com/blogs-and-sto...-anti-semitism/

Edited August 22, 2009 by flying

[Naam]

well, that's not smart but nonsense. a zillion americans do not pay a single penny income tax.

I must have told you a million times not to exaggerate. Anyway, there are not a zillion Americans on the globe, thank god. And the long reaches of the IRS covering the global income of every US citizen far exceed that of das deutsche Steueramt, which hasn't been as zealous in collecting it's pound of flesh from the Germans with bank accounts in Switzerland, yet....

i stand corrected and lower my zillion to a single godzillion

joke aside, the entry point in the U.S. when taxes are levied is rather high because of the generous standard deductions. a married couple with two children can presently earn $ 35,000 p.a. without paying a single dollar to the IRS.

[Abrak]

One of my favourite quotes on the crisis is this....

The source of the problem is really quite simple: Give smart people go-for-broke incentives and they will go for broke. Duh.

Next you put Paulson in charge of solving the problem....

I seem to remember he made US$35m in one year at GS and his portfolio is worth US$700m....

http://www.theracetothebottom.org/executiv...tax-shelte.html

[ray23]

Two interesting articles from the Asian Economic Meeting theis weekend in Bangkok:

http://www.nationmultimedia.com/2009/08/22...ss_30110414.php

http://www.nationmultimedia.com/2009/08/22...ss_30110413.php

Edited August 23, 2009 by ray23

[flying]

.

I seem to remember he made US$35m in one year at GS and his portfolio is worth US$700m....

He was also allowed to sell 200M I believe it was in GS stock when he became Secretary. Reason was conflict of interest<sic>

That same reason should have been good enough to keep him & Geithner out of that office seat completely. You look at the heat Obama got for Geithner being a tax evader & still Obama went ahead & made him in charge of that which he defrauded.

Not even to mention he was a president of a FED bank & had GS ties.

You start to see this revolving door between 3 entities clearly & constantly.

Goldman Sachs ------> FED------>High Government Financial Power Positions.

http://www.smirkingchimp.com/thread/22177

Edited August 23, 2009 by flying

[BlackJack]

well, that's not smart but nonsense. a zillion americans do not pay a single penny income tax.

I must have told you a million times not to exaggerate. Anyway, there are not a zillion Americans on the globe, thank god. And the long reaches of the IRS covering the global income of every US citizen far exceed that of das deutsche Steueramt, which hasn't been as zealous in collecting it's pound of flesh from the Germans with bank accounts in Switzerland, yet....

i stand corrected and lower my zillion to a single godzillion

joke aside, the entry point in the U.S. when taxes are levied is rather high because of the generous standard deductions. a married couple with two children can presently earn $ 35,000 p.a. without paying a single dollar to the IRS.

well you have missed the point of the post entirely

think before you post

[midas]

well, that's not smart but nonsense. a zillion americans do not pay a single penny income tax.

I must have told you a million times not to exaggerate. Anyway, there are not a zillion Americans on the globe, thank god. And the long reaches of the IRS covering the global income of every US citizen far exceed that of das deutsche Steueramt, which hasn't been as zealous in collecting it's pound of flesh from the Germans with bank accounts in Switzerland, yet....

i stand corrected and lower my zillion to a single godzillion

joke aside, the entry point in the U.S. when taxes are levied is rather high because of the generous standard deductions. a married couple with two children can presently earn $ 35,000 p.a. without paying a single dollar to the IRS.

well you have missed the point of the post entirely

think before you post

Never mind " generous standard deductions " for the lower paid - many US citizens previously

classed as " high net worth " who now face foreclosure and negative equity -i.e. the ones left

over that were meant to cover for the " zillion americans that do not pay a single penny income tax "

are also postponing their tax liability indefinately. And they doing so legally!

If you can’t pay your debt just show your bank records to the IRS and, they will stop trying to

collect the debt from you. IRS places you in what is known as “non-collectible status.”

And a taxpayer can stay in non-collectible status until the statute of limitations on collections runs out

in ten (10) years from the date of a tax assessment.

So if USA's economy doesn't improve for 10 years- I wonder if we will see this used more and more as

effectively a legal method to protest against the out of control spending in Washington ?

This is why I can't see how you can stop it from getting ugly in the end ?

Edited August 23, 2009 by midas

[Naam]

well you have missed the point of the post entirely think before you post

up yours too!

[Naam]

Never mind " generous standard deductions " for the lower paid - many US citizens previously

classed as " high net worth " who now face foreclosure and negative equity -i.e. the ones left

over that were meant to cover for the " zillion americans that do not pay a single penny income tax "

are also postponing their tax liability indefinately. And they doing so legally!

If you can’t pay your debt just show your bank records to the IRS and, they will stop trying to

collect the debt from you. IRS places you in what is known as “non-collectible status.”

And a taxpayer can stay in non-collectible status until the statute of limitations on collections runs out

in ten (10) years from the date of a tax assessment.

So if USA's economy doesn't improve for 10 years- I wonder if we will see this used more and more as

effectively a legal method to protest against the out of control spending in Washington ?

This is why I can't see how you can stop it from getting ugly in the end ?

when i was told about that (years ago) i thought it was a joke. but i was also told that this status is quite difficult to achieve and that the IRS monitors very closely the finances, i.e. annual tax returns have to be filed and additional detailed information has to be provided once a year.

[midas]

Never mind " generous standard deductions " for the lower paid - many US citizens previously

classed as " high net worth " who now face foreclosure and negative equity -i.e. the ones left

over that were meant to cover for the " zillion americans that do not pay a single penny income tax "

are also postponing their tax liability indefinately. And they doing so legally!

If you can’t pay your debt just show your bank records to the IRS and, they will stop trying to

collect the debt from you. IRS places you in what is known as “non-collectible status.”

And a taxpayer can stay in non-collectible status until the statute of limitations on collections runs out

in ten (10) years from the date of a tax assessment.

So if USA's economy doesn't improve for 10 years- I wonder if we will see this used more and more as

effectively a legal method to protest against the out of control spending in Washington ?

This is why I can't see how you can stop it from getting ugly in the end ?

when i was told about that (years ago) i thought it was a joke. but i was also told that this status is quite difficult to achieve and that the IRS monitors very closely the finances, i.e. annual tax returns have to be filed and additional detailed information has to be provided once a year.

It doesnt sound too difficult - not in 2009 anyway ?

A person may be considered to be Currently Not Collectible if he fulfills the following:

* If he doesn't have any assets, for the IRS to levy taxes.

* If he doesn't have a stable income or means to pay the taxes owed.

* If the income of the tax payer is less than the minimum that is required to fulfill his basic living expenses.

For a start I am sure there will be more saying stuff the banks - we will keep it in cash !

( and maybe a lot more after the FDIC reports this week ) So IRS wont know about cash.

And even if you have assets like real estate that they will make you sell......in the current

market that could take for ever...................

[Naam]

Never mind " generous standard deductions " for the lower paid - many US citizens previously

classed as " high net worth " who now face foreclosure and negative equity -i.e. the ones left

over that were meant to cover for the " zillion americans that do not pay a single penny income tax "

are also postponing their tax liability indefinately. And they doing so legally!

If you can’t pay your debt just show your bank records to the IRS and, they will stop trying to

collect the debt from you. IRS places you in what is known as “non-collectible status.”

And a taxpayer can stay in non-collectible status until the statute of limitations on collections runs out

in ten (10) years from the date of a tax assessment.

So if USA's economy doesn't improve for 10 years- I wonder if we will see this used more and more as

effectively a legal method to protest against the out of control spending in Washington ?

This is why I can't see how you can stop it from getting ugly in the end ?

when i was told about that (years ago) i thought it was a joke. but i was also told that this status is quite difficult to achieve and that the IRS monitors very closely the finances, i.e. annual tax returns have to be filed and additional detailed information has to be provided once a year.

It doesnt sound too difficult - not in 2009 anyway ?

A person may be considered to be Currently Not Collectible if he fulfills the following:

* If he doesn't have any assets, for the IRS to levy taxes.

* If he doesn't have a stable income or means to pay the taxes owed.

* If the income of the tax payer is less than the minimum that is required to fulfill his basic living expenses.

For a start I am sure there will be more saying stuff the banks - we will keep it in cash !

( and maybe a lot more after the FDIC reports this week ) So IRS wont know about cash.

And even if you have assets like real estate that they will make you sell......in the current

market that could take for ever...................

why should it take forever when there is a foreclosure auction? any home can be sold, it's only a matter of price.

[midas]

Never mind " generous standard deductions " for the lower paid - many US citizens previously

classed as " high net worth " who now face foreclosure and negative equity -i.e. the ones left

over that were meant to cover for the " zillion americans that do not pay a single penny income tax "

are also postponing their tax liability indefinately. And they doing so legally!

If you can’t pay your debt just show your bank records to the IRS and, they will stop trying to

collect the debt from you. IRS places you in what is known as “non-collectible status.”

And a taxpayer can stay in non-collectible status until the statute of limitations on collections runs out

in ten (10) years from the date of a tax assessment.

So if USA's economy doesn't improve for 10 years- I wonder if we will see this used more and more as

effectively a legal method to protest against the out of control spending in Washington ?

This is why I can't see how you can stop it from getting ugly in the end ?

when i was told about that (years ago) i thought it was a joke. but i was also told that this status is quite difficult to achieve and that the IRS monitors very closely the finances, i.e. annual tax returns have to be filed and additional detailed information has to be provided once a year.

It doesnt sound too difficult - not in 2009 anyway ?

A person may be considered to be Currently Not Collectible if he fulfills the following:

* If he doesn't have any assets, for the IRS to levy taxes.

* If he doesn't have a stable income or means to pay the taxes owed.

* If the income of the tax payer is less than the minimum that is required to fulfill his basic living expenses.

For a start I am sure there will be more saying stuff the banks - we will keep it in cash !

( and maybe a lot more after the FDIC reports this week ) So IRS wont know about cash.

And even if you have assets like real estate that they will make you sell......in the current

market that could take for ever...................

why should it take forever when there is a foreclosure auction? any home can be sold, it's only a matter of price.

But the federal law does not allow IRS to foreclose on your home if you can show it would cause you hardship.

[Naam]

But the federal law does not allow IRS to foreclose on your home if you can show it would cause you hardship.

i can't comment on that for lack of knowledge. however i know that the IRS cares (if the need arises) a sh*t about any law, e.g. can freeze your bank account, remove your yacht from its place at the marina, pull your Ferrari from the driveway, etc., etc., and all without any court order.