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Towns Rip Up Asphalt To Be Replaced By Cheaper Gravel

Sunday, August 8th, 2010

SPIRITWOOD, N.D.—A hulking yellow machine inched along Old Highway 10 here recently in a summer scene that seemed as normal as the nearby corn swaying in the breeze. But instead of laying a blanket of steaming blacktop, the machine was grinding the asphalt road into bits.

“When [counties] had lots of money, they paved a lot of the roads and tried to make life easier for the people who lived out here,” said Stutsman County Highway Superintendant Mike Zimmerman, sifting the dusty black rubble through his fingers. “Now, it’s catching up to them.”

Outside this speck of a town, pop. 78, a 10-mile stretch of road had deteriorated to the point that residents reported seeing ducks floating in potholes, Mr. Zimmerman said. As the road wore out, the cost of repaving became too great. Last year, the county spent $400,000 on an RM300 Caterpillar rotary mixer to grind the road up, making it look more like the old homesteader trail it once was.

Paved roads, historical emblems of American achievement, are being torn up across rural America and replaced with gravel or other rough surfaces as counties struggle with tight budgets and dwindling state and federal revenue. State money for local roads was cut in many places amid budget shortfalls.

Project supervisor Jerry Brickner checked a county road recently converted to gravel in Jamestown, N.D.

The heavy machines at work in Jamestown, N.D., are grinding the asphalt off road beds, grading the bed and packing the material back down to create a new road surface.

In Michigan, at least 38 of the 83 counties have converted some asphalt roads to gravel in recent years. Last year, South Dakota turned at least 100 miles of asphalt road surfaces to gravel. Counties in Alabama and Pennsylvania have begun downgrading asphalt roads to cheaper chip-and-seal road, also known as “poor man’s pavement.” Some counties in Ohio are simply letting roads erode to gravel.

The moves have angered some residents because of the choking dust and windshield-cracking stones that gravel roads can kick up, not to mention the jarring “washboard” effect of driving on rutted gravel.

But higher taxes for road maintenance are equally unpopular. In June, Stutsman County residents rejected a measure that would have generated more money for roads by increasing property and sales taxes.

“I’d rather my kids drive on a gravel road than stick them with a big tax bill,” said Bob Baumann, as he sipped a bottle of Coors Light at the Sportsman’s Bar Café and Gas in Spiritwood.

Rebuilding an asphalt road today is particularly expensive because the price of asphalt cement, a petroleum-based material mixed with rocks to make asphalt, has more than doubled over the past 10 years. Gravel becomes a cheaper option once an asphalt road has been neglected for so long that major rehabilitation is necessary.

“A lot of these roads have just deteriorated to the point that they have no other choice than to turn them back to gravel,” says Larry Galehouse, director of the National Center for Pavement Preservation at Michigan State University. Still, “we’re leaving an awful legacy for future generations.”

Some experts caution that gravel roads can be costlier in the long run than consistently maintained asphalt because gravel needs to be graded and smoothed. A gravel road “is not a free road,” says Purdue University’s John Habermann, who organized a recent seminar about the resurgence of gravel roads titled “Back to the Stone Age.”

Paving grew in popularity in the early 20th century as more cars hit streets and spread when the federal government built the Interstate Highway System.

Over the years, many of the two-lane arteries that connect country roads with metro areas have deteriorated under rising traffic and the growing weight of farm combines, logging trucks and other heavy equipment.

Frederick Wachtel, county engineer in Coshocton County, Ohio, says his budget, largely driven by fuel taxes and vehicle registration fees, was off 5% last year, the first decline in nearly 20 years. He is now letting some of his roads return to nature.

In Spiritwood one day recently, a soft breeze carried the scents of cow manure and hot asphalt over the tall broom grass. The giant Caterpillar chugged along at a speed of 2.4 feet per minute and pulverized Old Highway 10 into a black dust with chunks of rock and pavement. A piece of equipment following behind rolled the surface flat.

The machines rumbled along a path carved by homesteaders’ covered wagons in the 1800s. Over time, grain elevators and railroad depots sprung up along the route, which became known as the Old Red Trail. Later, the road was paved and renamed Highway 10.

After Interstate 94 was built alongside the road in the 1950s, it became Old Highway 10. Traffic volumes gradually dropped until Old 10 became a lazy backcountry road dotted with abandoned farmsteads. In the 1960s the state gave Old 10 to the counties it ran through, leaving them to pay for upkeep. North Dakota’s Stutsman County got a 30-mile stretch.

The gift became a burden. The Stutsman highway department, which gets the bulk of its funds from local property taxes, state fuel taxes and vehicle registration fees, let the road fall into disrepair as it juggled other projects. Every year without major maintenance, the road became more expensive to fix.

Judy Graves of Ypsilanti, N.D., voted against the measure to raise taxes for roads. But she says she and others nonetheless wrote to Gov. John Hoeven and asked him to stop Old 10 from being ground up because it still carries traffic to a Cargill Inc. malting plant. She says the county has mismanaged its finances and badly neglected roads.

“Our expenses outweigh the income,” says Mr. Zimmerman, who has been with the county highway department for nearly 30 years. He says the county will pay about $2,600 per mile annually for the newly ground-up road, as against about $75,000 per mile to reconstruct it.

Gayne Gasal, who lives along the redone stretch of road, says it has turned out “better than we all thought.” But Sportsman’s Bar owner Hilda Kuntz worries that the classic cars and bikers that roll through town in the summer will stay away.

“It’s going to kill my business,” she said.

Source: Wall Street Journal

Banks repossess US homes at record pace

Thursday, July 15th, 2010

Banks repossessed a record number of U.S. homes in the second quarter, but slowed new foreclosure notices to manage distressed properties on the market, real estate data company RealtyTrac said on Thursday.

The root problems of job losses and wage cuts persist, making a sustained U.S. housing recovery elusive.

Banks took control of 269,962 properties in the second quarter, up 5 percent from the prior quarter and a 38 percent spike from the second quarter of last year, RealtyTrac said in its midyear 2010 foreclosure report.

Repossessions will likely top 1 million this year.

“The underlying conditions haven’t improved,” RealtyTrac senior vice president Rick Sharga said in an interview.

The housing market still grapples with “unemployment, economic displacement in general, and still sits on over 5 million seriously delinquent loans that in all likelihood will at some point go into foreclosure,” he said.

In 2005, the last “normal” year in housing, Sharga said, about 530,000 households got a foreclosure notice and banks took over a comparatively minuscule 100,000 houses.

This year more than 3 million households are likely to get at least one foreclosure filing, which includes notice of default, scheduled auction and repossession, Irvine, California-based RealtyTrac forecasts.

In the first half of the year, foreclosure filings were made on 1.65 million properties. That was down 5 percent from the last half of 2009 but up 8 percent from the first half of last year.

One in every 78 households got at least one foreclosure filing in the first six months of this year.

Source: Reuters

Obama Begs For $50 Billion In State, Local Aid

Thursday, June 17th, 2010

President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.

In a letter to congressional leaders, Obama defended last year’s huge economic stimulus package, saying it helped break the economy’s free fall, but argued that more spending is urgent and unavoidable. “We must take these emergency measures,” he wrote in an appeal aimed primarily at members of his own party.

The letter comes as rising concern about the national debt is undermining congressional support for additional spending to bolster the economy. Many economists say more spending could help bring down persistently high unemployment, but with Republicans making an issue of the record deficits run up during the recession, many Democratic lawmakers are eager to turn off the stimulus tap.

“I think there is spending fatigue,” House Majority Leader Steny H. Hoyer (D-Md.) said recently. “It’s tough in both houses to get votes.”

Democrats, particularly in the House, have voted for politically costly initiatives at Obama’s insistence, most notably health-care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.

The House last month stripped Obama’s request for $24 billion in state aid from a bill that would extend emergency benefits for jobless workers. Senate Majority Leader Harry M. Reid (D-Nev.) hopes to restore that funding but with debate in that chamber set to resume this week, he acknowledges that he has yet to assemble the votes for final passage. Obama’s request for $23 billion to avert the layoffs of as many as 300,000 public school teachers has not won support in either chamber.

Mixed signals

Senior Democratic congressional aides said those initiatives have not gained traction in part because the White House has not made additional spending on the economy a clear priority.

In recent weeks, for instance, the White House has appeared more intent on cutting spending — threatening to veto a defense bill over a jet engine project that the Pentagon views as unnecessary and urging every agency to come up with a list of low-priority programs for elimination. Obama has also proposed a three-year freeze in discretionary spending unrelated to national security, an idea endorsed by leaders of both parties at a meeting at the White House last week, according to Obama’s letter.

With the letter, however, Obama makes a direct and unequivocal case for additional “targeted investments,” including state aid and several less-expensive initiatives aimed at assisting small businesses. He specifically calls for passage of the measure that is before the Senate, which would extend unemployment benefits and offer states additional aid, increasing deficits by nearly $80 billion over the next decade.

Obama asks lawmakers to be patient on the deficit, noting that a special commission is at work on a comprehensive deficit-reduction plan.

“It is essential that we continue to explore additional measures to spur job creation and build momentum toward recovery, even as we establish a path to long-term fiscal discipline,” Obama wrote. “At this critical moment, we cannot afford to slide backwards just as our recovery is taking hold.”

Read the rest of the story at: Washington Post

50 Statistics About The U.S. Economy

Monday, June 7th, 2010

Most Americans know that the U.S. economy is in bad shape, but what most Americans don’t know is how truly desperate the financial situation of the United States really is.  The truth is that what we are experiencing is not simply a “downturn” or a “recession”.  What we are witnessing is the beginning of the end for the greatest economic machine that the world has ever seen.  Our greed and our debt are literally eating our economy alive.  Total government, corporate and personal debt has now reached 360 percent of GDP, which is far higher than it ever reached during the Great Depression era.  We have nearly totally dismantled our once colossal manufacturing base, we have shipped millions upon millions of middle class jobs overseas, we have lived far beyond our means for decades and we have created the biggest debt bubble in the history of the world.  A great day of financial reckoning is fast approaching, and the vast majority of Americans are totally oblivious.

But the truth is that you cannot defy the financial laws of the universe forever.  What goes up must come down.  The borrower is the servant of the lender.  Cutting corners always catches up with you in the end.

Sometimes it takes cold, hard numbers for many of us to fully realize the situation that we are facing.

So, the following are 50 very revealing statistics about the U.S. economy that are almost too crazy to believe….

#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.

#49) It is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars in 2010.

#48) If you went out and spent one dollar every single second, it would take you more than 31,000 years to spend a trillion dollars.

#47) In fact, if you spent one million dollars every single day since the birth of Christ, you still would not have spent one trillion dollars by now.

#46) Total U.S. government debt is now up to 90 percent of gross domestic product.

#45) Total credit market debt in the United States, including government, corporate and personal debt, has reached 360 percent of GDP.

#44) U.S. corporate income tax receipts were down 55% (to $138 billion) for the year ending September 30th, 2009.

#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.

#42) In the area around Sacramento, California there is one closed business for every six that are still open.

#41) In February, there were 5.5 unemployed Americans for every job opening.

#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.

#39) More than 40% of those employed in the United States are now working in low-wage service jobs.

#38) According to one new survey, 24% of American workers say that they have postponed their planned retirement age in the past year.

#37) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.  Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005.

#36) Mortgage purchase applications in the United States are down nearly 40 percent from a month ago to their lowest level since April of 1997.

#35) RealtyTrac has announced that foreclosure filings in the U.S. established an all time record for the second consecutive year in 2009.

#34) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in March 2010, an increase of nearly 19 percent from February, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.

#33) In Pinellas and Pasco counties, which include St. Petersburg, Florida and the suburbs to the north, there are 34,000 open foreclosure cases.  Ten years ago, there were only about 4,000.

#32) In California’s Central Valley, 1 out of every 16 homes is in some phase of foreclosure.

#31) The Mortgage Bankers Association recently announced that more than 10 percent of all U.S. homeowners with a mortgage had missed at least one payment during the January to March time period.  That was a record high and up from 9.1 percent a year ago.

#30) U.S. banks repossessed nearly 258,000 homes nationwide in the first quarter of 2010, a 35 percent jump from the first quarter of 2009.

#29) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

#28) More than 24% of all homes with mortgages in the United States were underwater as of the end of 2009.

#27) U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is sitting vacant.

#26) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010.  That was almost twice the level of a year earlier.

#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.

#24) New York state has delayed paying bills totalling $2.5 billion as a short-term way of staying solvent but officials are warning that its cash crunch could soon get even worse.

#23) To make up for a projected 2010 budget shortfall of $280 million, Detroit issued $250 million of 20-year municipal notes in March. The bond issuance followed on the heels of a warning from Detroit officials that if its financial state didn’t improve, it could be forced to declare bankruptcy.

#22) The National League of Cities says that municipal governments will probably come up between $56 billion and $83 billion short between now and 2012.

#21) Half a dozen cash-poor U.S. states have announced that they are delaying their tax refund checks.

#20) Two university professors recently calculated that the combined unfunded pension liability for all 50 U.S. states is 3.2 trillion dollars.

#19) According to EconomicPolicyJournal.com, 32 U.S. states have already run out of funds to make unemployment benefit payments and so the federal government has been supplying these states with funds so that they can make their  payments to the unemployed.

#18) This most recession has erased 8 million private sector jobs in the United States.

#17) Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of 2010.

#16) U.S. government-provided benefits (including Social Security, unemployment insurance, food stamps and other programs) rose to a record high during the first three months of 2010.

#15) 39.68 million Americans are now on food stamps, which represents a new all-time record.  But things look like they are going to get even worse.  The U.S. Department of Agriculture is forecasting that enrollment in the food stamp program will exceed 43 million Americans in 2011.

#14) Phoenix, Arizona features an astounding annual car theft rate of 57,000 vehicles and has become the new “Car Theft Capital of the World”.

#13) U.S. law enforcement authorities claim that there are now over 1 million members of criminal gangs inside the country. These 1 million gang members are responsible for up to 80% of the crimes committed in the United States each year.

#12) The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care “reform” bill passed by Congress, that number could swell by several hundred thousand more.

#11) According to an analysis by the Congressional Joint Committee on Taxation the health care “reform” bill will generate $409.2 billion in additional taxes on the American people by 2019.

#10) The Dow Jones Industrial Average just experienced the worst May it has seen since 1940.

#9) In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1.  Since the year 2000, that ratio has exploded to between 300 to 500 to one.

#8) Approximately 40% of all retail spending currently comes from the 20% of American households that have the highest incomes.

#7) According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases in the U.S. between 2002 and 2007 went to the wealthiest 1% of all Americans.

#6) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

#5) If you only make the minimum payment each and every time, a $6,000 credit card bill can end up costing you over $30,000 (depending on the interest rate).

#4) According to a new report based on U.S. Census Bureau data, only 26 percent of American teens between the ages of 16 and 19 had jobs in late 2009 which represents a record low since statistics began to be kept back in 1948.

#3) According to a National Foundation for Credit Counseling survey, only 58% of those in “Generation Y” pay their monthly bills on time.

#2) During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4.  Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent.

Source: endoftheamericandream.com

40 Million Americans On Food-stamps, A New Record

Monday, May 24th, 2010

Nearly 40 million Americans received food stamps — the latest in an ever-higher string of record enrollment that dates from December 2008 and the U.S. recession, according to a government update.

Food stamps are the primary federal anti-hunger program, helping poor people buy food. Enrollment is highest during times of economic distress. The jobless rate was 9.9 percent, the government said on Friday.

The Agriculture Department said 39.68 million people, or 1 in 8 Americans, were enrolled for food stamps during February, an increase of 260,000 from January. USDA updated its figures on Wednesday.

“This is the highest share of the U.S. population on SNAP/food stamps,” said the anti-hunger group Food Research and Action Center, using the new name for food stamps, Supplemental Nutrition Assistance Program (SNAP). “Research suggests that one in three eligible people are not receiving … benefits.”

Enrollment has set a record each month since reaching 31.78 million in December 2008. USDA estimates enrollment will average 40.5 million people this fiscal year, which ends Sept 30, at a cost of up to $59 billion. For fiscal 2011, average enrollment is forecast for 43.3 million people.

Source: Reuters

Judge Urges Citizens To ‘Arm Themselves’ After Police Cuts

Friday, May 7th, 2010

Local official: Use shotguns so you kill, rather than hurt, criminals

A county judge in rural northeast Ohio has renewed his call for citizens to arm themselves in the wake of police budget cuts that have left one cruiser patrolling an entire county.

Judge Alfred Mackey of the Ashtabula County Court told residents in an interview with Cleveland’s WKYC-TV two weeks ago that the budget cuts the county implemented in recent years meant the population could no longer count on police responding in time to emergency situations.

“We are living in a large county, and you cannot count on the availability of your sheriff to come to your home if you are in danger in a prompt manner,” Mackey told the Cleveland Plain Dealer, in an interview in which he reiterated his call.

County auditor Roger Corlett says he’s seen revenue drop from $23 million three years ago to just under $18 million today. Last month, the county slashed the number of deputies from 112 to 49, and left the force with one patrol car with which deputies have to monitor a 720-square-mile area. The towns and villages in Ashtabula County have their own police forces, but that still leaves about 680 square miles to cover.

The budget problems have hit the county’s jail as well, with 700 people on a “waiting list” to serve time still in the community at large.

And the reduced policing has taken its toll. The Plain Dealer reports:

Incident reports show how stretched deputies have been as they try to deal with overlapping emergencies separated by miles and miles of country roads. One night they were delayed getting to a woman who claimed her knife-wielding husband had threatened to kill her because they were handling an arrest in another case of domestic violence.

Another night they couldn’t get to a burglary at a community center for about 1¾ hours because they were arresting a man accused of beating up his girlfriend. And the list goes on.

The situation is “absolutely terrible,” said Johnson. “We’re just keeping the peace as best we can.”

LOCAL OFFICIAL: USE SHOTGUN

For at least one local official, Judge Mackey’s call doesn’t go far enough. Monroe Township Trustee Charles Riley says people should not only arm themselves, but should arm themselves with shotguns to ensure that they kill the criminals they come into contact with.

“They should use shotguns not handguns and that way we don’t have to send [criminals] to court or to jail because they’ll be dead,” he said, as quoted at the Plain Dealer.

Not everyone agrees with Riley’s line of reasoning. Law professor Peter Moskos of the John Jay College of Criminal Justice says that an armed citizenry may be a workable alternative to a functioning police force, but it sends a bad signal.

“It does strike me as a terrible step backward for civilization to go back to individual armed citizens,” Moskos said, as quoted at the Plain Dealer. “That’s what we have government for.”

For the pro-gun group Ohioans for Concealed Carry, Judge Mackey’s declaration is a step in the right direction, but the group argues there’s no need to wait for a budget crisis to hand over policing responsibilities to the public.

“The need and the right to defend yourself doesn’t come with budget cuts and reduced law enforcement staffing,” Jeff Garvas writes at the group’s Web site. “Carrying a firearm for self-defense, and any other methods of situational awareness, were just as valid before these budget cuts as they are today.”

Source: Raw Story

33 states out of money to fund jobless benefits

Friday, April 23rd, 2010

With unemployment still at a severe high, a majority of states have drained their jobless benefit funds, forcing them to borrow billions from the federal government to help out-of-work Americans.

A total of 33 states and the Virgin Islands have depleted their funds and borrowed more than $38.7 billion to provide a safety net, according to a report released Thursday by the National Employment Law Project. Four others are at the brink of insolvency.

Debt-challenged California has borrowed the most, totaling more than $8.4 billion, followed by Michigan and New York, which have loans worth more than $3 billion. Nine other states have borrowed at least $1 billion from the federal government.

“The nation’s financing system for jobless benefits is under unprecedented stress,” said Andrew Stettner, deputy director of the New York-based advocacy group for the unemployed. “While the recession has certainly made things worse, this funding crisis has been developing for years.”

At the onset of the recession, only 19 states met the recommended funding level, which is one year of reserves equal to the highest amount of unemployment insurance paid out during prior recessions.

Financing experts suggest that states build up their jobless benefit coffers during strong economic times so that they can draw from them during downturns.

Federal and state governments collect money for unemployment benefits by taxing employers on a small portion of their employee wages. While total wages and weekly jobless benefit levels have been rising, governments haven’t increased the taxable base wages at the same pace.

Instead, they adopted a “pay as you go” approach, keeping taxes and fund levels low during good times and raising taxes and cutting benefits when strapped for cash. That left many states with insufficient jobless funds to weather the recession.

Read the rest of the story at: CNN

Reverse migration: Flight to the exurbs stops cold

Monday, April 12th, 2010

2008′s $4-a-gallon gas seemed to be the trigger and now even moves to the suburbs are slowing drastically.

Francine Lindala began making the one-hour commute from Princeton to Roseville in the days when gas was cheap. As the cost of fuel steadily rose beyond what Americans had ever seen, she and her husband toyed with the idea of selling.

Wondering what their home would fetch, they ordered up an appraisal. The answer shocked them. “There were no comparables,” she said. Houses like hers simply were not selling. So they’re staying — for now.

It’s an illustration of what’s happening all over the once-booming Twin Cities fringe. A metro area once considered one of the nation’s most sprawling is now strengthening at its center while its outer rings wither.

New estimates suggest that the movement into suburban and exurban counties within commuting distance of Minneapolis and St. Paul has stopped cold for the first time in recent memory.

For many years, the combination of robust growth, a multitude of freeways and plenty of open space helped ignite an explosion in exurban living. People were commuting for hours from towns such as Mora, Glencoe and Owatonna. National experts classed the Twin Cities as having the nation’s third-largest exurban flight from 2000 to 2005, ahead of even sprawling Atlanta.

But the U.S. Census Bureau’s latest estimates — the first to reflect the impact of 2008′s $4-a-gallon gas — suggest that:

With people abandoning foreclosed and unsellable homes, the two-state ring of exurban counties is hardly growing. For these counties as a group, 2009 marked the first time more people left than moved in.

In the five big suburban counties closest to the center (Dakota, Scott, Carver, Anoka and Washington), new arrivals have slowed to a standstill. With a wave of baby boomers sitting on empty nests in older suburbs such as Eagan, and new construction all but extinguished in once-booming counties such as Scott, growth is half what it was a decade ago.

The two big core counties of Hennepin and Ramsey, losing tens of thousands of people a year as recently as five years ago, are on the rebound. Growth is gaining by the year.

Click to continue »

Commercial real estate mortgages sinking quickly

Saturday, April 3rd, 2010

By the end of 2010, half of all commercial real estate mortgages in the United States could be “underwater,” according to the government’s Troubled Asset Relief Program watchdog.

Translation: Americans’ financial woes are far from over.

The commercial real estate bubble will grow so large that it will become a “serious problem” that will take at least three years to address, Elizabeth Warren, who chairs the congressional oversight pannel on TARP, told CNBC on Monday.

Nearly 3,000 “mid-sized” banks have what she called “dangerous concentrations” of sinking commercial mortgages: a situation that could result in roughly half the commercial property in the U.S. becoming worth more as debt than as real estate.

“The problem here is not fundamental. It is circumstantial, and it’s deadly. These owners can’t ride out the recession because their loans are due and they’re short, or worse, upside-down,” noted Greg Rand, writing for Entrepreneur.

“There is no implicit guarantee anymore,” Warren said. “I don’t care how big you are, if you make serious enough mistakes, then your business can be entirely wiped out.”

She added that the U.S. is going to lose money on the TARP program, but not as much as first thought thanks to the for-profit sale of the government’s stake in Citigroup.

Her remarks fall on the same day that Treasury Secretary Timothy Geithner cautioned that commercial real estate would be a “problem” in coming years that the government should be able to handle.

“Geithner also said the Treasury Department’s announcement that it will begin selling the stake it owns in Citigroup Inc., which could net about $7.5 billion to the government, shows ‘how far we’ve come’ in exiting from the financial bailout program,” the Associated Press reported.

The TARP’s Congressional Oversight Panel said U.S. banks stand to lose over $300 billion on risky commercial lending.

This video is from CNBC, broadcast Monday, March 29, 2010.

Signs Of The Apocalypse: #45 Government Services Cut Back

Tuesday, March 30th, 2010

U.S. Postal Service pushes to cut Saturday mail delivery early next year

The proposal, which would save $5.1 billion annually by 2020, would eliminate the equivalent of 49,000 full- and part-time jobs.

The U.S. Postal Service said Monday it wants to end Saturday mail delivery by early next year as part of a wide-ranging plan to slash jobs, save billions of dollars and cope with the impact of declining mail volume in the Internet age.

“Given the fact that we’re facing such a huge deficit, we’d like to move as quickly as possible,” Postmaster General John E. Potter told a news conference.

Faced with a projected $238-billion deficit over the next decade, the Postal Service board of governors approved the cuts last week and ordered Potter to submit the proposal to the Postal Regulatory Commission on Tuesday. In addition to cutting one day a week from the delivery schedule, the proposal would eliminate the equivalent of 49,000 full- and part-time jobs.

Officials said the changes would save the Postal Service a forecasted $3.3 billion in the first year and about $5.1 billion annually by 2020.

Under the plan, letter carriers would stop street deliveries to U.S. homes and businesses and pickups from blue collection boxes on Saturdays. Mail would continue to be accepted at post offices Saturday, to be processed Monday. Express mail and remittance mail services would continue seven days a week.

If approved by the Congress and the regulatory commission, officials said they hoped to implement this plan by the first half of 2011. Congress currently mandates delivery to all U.S. addresses six days a week.

Potter said the Postal Service would eliminate about 26,000 positions through employee attrition and lay off 13,000 part-time workers, most of whom carry the mail once a week as substitutes. He said the high attrition rates are only possible because the average age of letter carriers is 53 and most have pension arrangements that would allow them to retire at 55. About 10,000 carriers retire each year, Potter said.

Potters said the changes were made necessary by citing continuing drops in mail volume. American mailboxes currently receive an average of four pieces of mail each day, but this is projected to be reduced to three pieces by 2020. Current daily revenue generated by each delivery is $1.40 but will slide to about $1 per delivery in 2020.

Source: LA Times