I’ll use my own city of Garland Texas as a specific  example if you care to follow.  $85,304,816 of our total $512,713,285 budget for the city of Garland goes to “service debt”. [Source]  Almost 1/5 of our entire budget is paid to a financial institution.  By reducing the annual payments on debt and by reducing the interest and fees paid on this debt, we would free up money for job creation and repair of the infrastructure of our community.  For example, perhaps we wouldn’t have to be closing libraries as we are now if we had a deal which was mutually beneficial instead of so horribly one-sided.

We need to start asking the real questions–the answers to which will educate and inform us regarding what steps to take next.  We the people must work with those we have elected in supporting them in finding solutions that work better for the majority.

We the people should ask for a more detailed explanation of exactly what is meant by the term:  ”service debt”.  For example, these would be questions for the city council and mayor of Garland such as:

• How much of this $85,304,816 “debt service” is interest?
• How much of the $85,304,816 is payment on principal?
• How much of this $85,304,816 is for bank fees and other charges to the bank that are neither interest nor principal?
• Who is the financial institution that is making a profit twice off the citizens of our community (once for our personal debt and then again for our public debt)?

Once we have these answers, we negotiate with these financial institutions for better terms for the people of our city and if the financial institutions are not prepared to meet us half-way, then we research what it would mean in terms of benefits for the majority of Garland if our local government exercised eminent domain over these banks–particularly in terms of bank foreclosures against our citizens.  As I mentioned previously, the city of Garland has no less than 311 homes in our city that are currently in foreclosure.  The leverage of eminent domain is a powerful leverage that even local city governments have.

And the rights of eminent domain are not limited to homes or property of private citizens.  Local city governments could exercise eminent domain against the buildings of Wall Street banks in our communities if they so desired and seize those properties.

The most common uses of property taken by eminent domain are for public utilities, highways and railroads. however, property may also be taken for reasons of public safety–just ask the people of  Brownsville about their Wall.  What threatens the safety, indeed, the survival of many of our local communities now more than the unreasonable burden of debt imposed on them by Wall Street institutions with their fees, fines and usury collected as interest rates?  It’s time to fight back at the bargaining table by  representing the people first and Wall Street second.

___________________________________________________

Look at your own city budgets now!  The city you save may be your own. Find out exactly how much of your city’s annual budget goes to “service debt” and then work with your city council to negotiate a MUCH better deal with the financial institution who is holding them hostage.  Don’t be afraid to use the leverage of eminent domain at the bargaining table and above all, don’t be afraid to use it if the financial institutions don’t meet you half-way.

______________________________________________

In the past, many of the municipal governments all over the USA have sold out their citizens for a nickel to Wall Street interests. Now is the time to stop that and to renegotiate these bad deals for the people.  And yes we can and we need to begin today.  Maybe instead of occupying the streets, OCCUPY needs to move into the chambers of city government.

_____________________________________________

Against the bleak backdrop of our national economy, Wall Street continues to squeeze the majority of local government across the USA, but it is squeezing Detroit, one of America’s weakest cities for every penny it can and more.

A few years ago Detroit struck a derivatives deal with UBS and other banks that allowed it to save more than $2 million a year in interest on $800 million worth of bonds.  But the fine print carried a potentially devastating condition.  If the city’s credit rating dropped, the banks could ope out of the deal and demand a sizable breakup fee.  That is precisely what happened in January of 2009.  After years of fiscal trouble, Detroit saw its credit rating slashed to junk.  But that was only part of the cash grab from Wall Street.  Detroit was also on the hook for a $400 million tab in “breakup” fee to the USB– a breakup that USB themselves orchestrated, not the city of Detroit.

Now Detroit must use the revenues from its three casinos:  MGM Grand Detroit, Greektown Casino, and Motor Casino to cover a $4.2 million monthly payment to the banks before a single cent can go to schools, transportation and other critical services.

Read the complete article here.

_______________________________________________

The economies of U.S. States are sinking as well as our local governments.  A January 2011 report from THE ECONOMIST compared economies of various U.S. states to those of other nations.  It found that the economy of Mississippi compares to that of Bangladesh and the economy of Alabama to Nigeria.  In other world, those in Alabama could move to Nigeria and expect the same standard of living.  Of course, what separates Alabama from Nigeria is that Alabama is part of a UNITED states whereas Nigeria must get by without ay help.  Ironic that Southern and Western states talk of secession when in fact they are the ones who are most dependent on the Federal government.

Charles Ponzi has a lot in common with Wall Street Banks of today–like Ponzi, they are in the business of fleecing Americans.

Yes, their games are different, but the end result to the victims is the same:  They are robbed.

____________________________________________________

I was visiting a friend who has just taken over the responsibility of assisting her elderly mother in managing her money on a monthly basis.  No, this woman does not have stocks and bonds to manage, only social security of $1,200 along with about $1,000 more a month from rental income.

Her mother has a credit card account with Bank of America, but this could have been any Wall Street bank and the story would have been the same. In case you don’t know, on the second page of the monthly statements (because banks don’t want you to read the information)is a little block labeled “Payment Information”.  If you have credit card debt, you should read your monthly statement sometime.

This woman’s mom owed a balance total of $6,554.14

According to the payment information on her statement, if her mom only makes the minimum payment of $206.00 a month, it will take her 27 years to pay off the balance of $6,554.14. She will likely die first.

If she does live to pay off her debt, the woman will end up paying Bank of America $20,614.20–almost three times the value of the loan in the first place.  Bank of America will make at least $14, 060.00 –yes there will be nominal costs for the bank on maintaining the account, but it is highly doubtful that these costs exceed more than a thousand dollars over the life of the loan.  Additionally the interest is not the only money that the bank may collect on this debt. If the women is one day late on paying the debt then she is assessed a “late fee” of $35 and the APRs may be increased up to the Penalty APR of 29.99%.

Each month, on her $265.85 $206.00 payment, the woman pays $142.73 in interest–more than half her monthly payment.

__________________________________________________

Why is this outrageous system allowed to exist in a Democracy?  Because we allow it with our votes for federal officials.

Democracy should not mean giving license to people to rip other people off and then calling their marks stupid for falling for the scheme.  (Unless of course the marks are rich as most of Madoff’s victims were which explains why he is in jail and people like Lloyd Bankfein are not.)  Is there any reader out there who actually believes that the usurious interest rates in effect on credit card debt that enable banks to collect more than three times the value of the original loan are moral and just?  Should we have laws on the books that allow banks to charge interest to customers that amount to three times the value of the original loan?

________________________________________________

So why is it legal for Wall Street Banks to rip off Americans with impunity and people like Charles Ponzi and Bernie Madoff go to prison for ripping people off?

It is legal for banks because the people that we currently have “representing” us in the U.S. Congress allow it.  They are the ones who write the laws.  They could write a one page law this morning to end this all if they wanted to represent the majority.  They actually could and in less than an hour and in less than a full page.  The law would simply state that it is not legal to collect more interest than the total worth of the original loan.

Yes, it is that simple.  There is nothing complicated about putting a ceiling on the amount of interest that a financial institution is allowed to charge.  No brain surgeon skills required. It could be done quite easily.

Well why don’t they pass such a law?

They don’t pass such a law because the majority of shysters that we currently have in Congress (Democrats and Republican/Tea party jerks) own Wall Street stock in these financial institutions and they personally profit from the misfortune of Americans like my friend’s mother.  Yes, it is exactly as simple as that.  No brain surgeon skills required.  In addition to owning stock in these financial institutions, their political campaigns are funded by these banks and financial institutions.  A report from 2008 stated that since 2001,  eight of the most troubled firms had donated  more than $64.2 million to congressional candidates, presidential candidates and the Republican and Democratic parties.

Nearly every member of the House Financial Services Committee, who in February 2009 oversaw hearings on how the $700 billion of TARP bailout was being spent, received contributions associated with these financial institutions during the 2008 election cycle and most of them owned Wall Street stock in at least one of these financial institutions and many of them owned stock in several of these financial institutions.  Go read the facts on your elected officials in Open Secrets.

______________________________________________

What can we do about it? Plenty!

We can throw the entire House of Representatives out of Washington DC in 2012 along with the White House and we can elect a President who is neither a Democrat nor a Republican/Tea Party jerk. We can elect non-wall street investors from the 99% to represent us.

Or we can continue to pretend that we have a “two-party” system and that we are “throwing our votes away” if we don’t vote for a Democrat or a Republican.  Or we can continue to pretend that we are helpless and that the 1%’s money is worth more than our collective majority vote.

The truth is that we ARE throwing our votes away if we vote for either a Democrat OR a Republican.