Defaulting Puerto Rico is “America’s Greece”

The world’s attention as been on Greece, as Europe hopes its collapsing economy and its rejection of austerity measures will not pull down the rest of the Eurozone.  But what happened to Greece is also happening to the American territory of Puerto Rico, whose imminent default on its $72 billion debt–most of which is owed to U.S. investors (which don’t have that much exposure in Greece)–will have a far greater effect on the American economy.

The White House is refusing to bail out Puerto Rico but is instead asking Congress to pass a law allowing the territory to declare bankruptcy.  But that means the American investors will take the loss, which won’t be good for the U.S. economy. [Read more...]

House Democrats defy Obama on trade deal

Democrats in the House of Representatives gave President Obama a stunning defeat, voting against his free trade deal with Asia despite his personal pleas.  The president’s only reliable allies, ironically, are the Republicans, who promise to find a new way to advance legislation that fast-tracks the Trans-Pacific Partnership. [Read more...]

Germany is demographically doomed

The “baby bust” in Germany is so severe that the country is unlikely to retain its current economic dominance.  The population is expected to drop from 81 million to 67 million by 2060.  That big of a drop in both the job market and in the consumer market will be devastating to the German economy.  England and France are in much better demographic shape. [Read more...]

Eliminating cash?

Discussions at the big summit of world financial leaders in Bilderburg, Austria, this week will include proposals to limit cash transactions as a way to fight illegal activity and to give banking systems greater control of monetary fluctuations.  This at a time when a number of economists, bankers, and government officials have called for the elimination of cash altogether.  All purchases would be made electronically.  See anything wrong with that? [Read more...]

Postage rates are actually going down

Prices for a first-class stamp will drop from 49 cents back down to 46 cents after a federal court ruled that the latest postage increase could not be permanent.  The cost of the switch will be minimal, due to the US Postal Service reliance on “forever stamps” (though woe to the speculators who bough them as investments).

In the age of e-mail and UPS delivery, do we really need the U. S. mail anymore? [Read more...]

The financial problems of just living together

There are strong moral reasons why couples shouldn’t just live together without being married.  There are also strong psychological reasons why this is not a good idea.  (See also this.)  The Washington Post‘s financial advice columnist, Michelle Singletary, points out that there are also strong financial reasons not to, that sharing housing expenses, bank accounts, and buying property together can be disastrous if the couple isn’t married. [Read more...]