Q: I hope McClatchy will soon headline an article about the Members of Congress Healthcare Plan. DETAILS! DETAILS! Is it true taxpayers fund between 72% and 75% of their plan? Is it true Members of Congress have little or no trouble getting their doctors treatments approved? Is it true Members of Congress do not have a long "Wait time" for medical procedures? Is it true Members of Congress deserve better healthcare options than taxpayers? If not, why do they have what I want for myself and all Americans?

Submitted by Maggie from Highland Park, IL

A: Actually Bill Douglas, one of our congressional correspondents did, touch on many of your points. Here is a link to the article that you or anyone else interested can cut and paste into your browser. http://www.mcclatchydc.com/staff/william_douglas/story/71983.html

Answered 07/27/09 18:33:08 by Kevin Hall and Tony Pugh

Q: Check this site: AMTonline.org This group was formerly named (NMTBA) National Machine Tool Builders Association. Now it is (AMT) Association for Manufacturing Technology. Under Industry Trends and Statistics-US market- indicates that 2009 is down 70.5% compared to 2008.That's up to July 1st, 2009.

Submitted by from

A: tx, will post so readers can look for themselves.

Answered 07/27/09 18:32:05 by Kevin Hall and Tony Pugh

Q: When is the housing market expected to hit bottom? As a potential home buyer, I am wanting to step in at the best time possible to get the lowest price, with the lowest interest rate.

Submitted by Charity from Davie, Fl

A: I am not sure people will know for sure until bottom has already been reached. Many experts believe we are certainly near that point in several key markets, but hitting bottom will be complicated by the large number of new foreclosures coming onto the market because of the job downturn. Rising unemployment complicates the housing outlook, piling on new foreclosures on top of the ones caused by problems in the housing sector. I think you can safely assume the Federal Reserve will be doing all possible this year to keep mortgage rates low so if I were you I'd try to time that sweet spot between when mortgage rates are unlikely to go lower __ they were lower a few months back_ and when people start jumping back into the market and you have competition on the home you want. Florida, your state, remains a problem state but there surely have been some pretty steep price drops so in many parts it is hard to see prices falling much further.

Answered 07/23/09 14:37:19 by Kevin Hall and Tony Pugh

Q: Why are tarp funds to banks not conditional on getting rid of bad mortgage loans even at a dime on the dollar? The banks seem to want both tarp funds and better future returns on bad assets? Would it not be better for the tarp funds to go directly to pay down to market value on behalf of home owners? The holders of the mortgage get some money now and the home owner would have a lower mortgage they could possibly pay reducing the foreclosure rate.

Submitted by wes munro from las vegas nv

A: The TARP funds were initially for just that reason, hence the same Troubled Asset Relief Program, but former Treasury Secretary Henry Paulson opted last October to instead capitalize the banks to ensure they had enough money to effectively quarantine the bad assets and eventually grow their way out of the problem. The problem with paying homeowners now is that it creates incentives for others to stop payments and argue they too need foreclosure relief. To be fair it would have to apply for everyone, raising the costs for everyone. Although I think writing down the value of the mortgage is necessary, it seems unfair to do it for someone who is behind on payments and not for someone whose home is now worth 40 percent less than it did two years ago.

Answered 07/10/09 23:45:08 by Kevin Hall and Tony Pugh

Q: I suppose this is going to be silly of me, so bear with the question please. Treasury Sec Tim Geithner back in march started a program for private-public invenstment to buy up the 'toxic assets' (love that term) from banks to clear their books, this apparently is not operational yet. I assume someone buying a "toxic asset" would not be paying full price, in fact i suspect the price would be really cheap.....i want to know why the poor homeowners that have these mortgages(ie the toxic assets) are not allowed to be the ones that buy it? My mortgage(134,000USD) was with wamu, Chase paid a paltry 947 dollars for it....i mean....why couldnt the mortgage owner(you know..the Home Owner) buy it back at a cheap price? seriously i dont see the flaw in the idea...do you? seriously

Submitted by david chanley from wakefield,ma

A: I think the homeowner wouldnt qualify to buy it back, but you've hit on an important theme. That homes have gone into foreclosure, where they sell for a loss that tends to be greater than if they had simply modified the mortgage and wrote down the loss. And this happens day after day, I have been on the phone with loan servicers and asked them why they would move to foreclosure, dragging down surrounding home values and weakening the value of their other holdings. It is truly insane in some areas. It would have been much cheaper three years ago for the govt to step and an help write down the value of subprime loans than trying to clean up after the collapse now. But that is water under the bridge. The lawmakers who argued that these writedowns shouldnt happen because they reward bad decisions have let those bad decisions drag everyone down together. And now everyone is in the same boat, with declining home values or a nearly frozen real estate market with virtually nothing moving.

Answered 07/10/09 23:40:46 by Kevin Hall and Tony Pugh

Q: How much worse would the current economic crisis be without significantly increased government spending? As you know, the economy shrank by more than 6% last quarter. The loss of business investment accounts for most of that shrinkage (according to Business Week, more than four of the six percentage points). Additionally, consumer spending is down considerably (way down, you might say; the rate of consumer saving has gone from 0% to 5%). If GDP is the sum of govt expenditure and business investment (which is down), consumer consumption (which is down), and net exports (which is down because both business and consumers are buying less and the recession is global), how does GDP stabilize without increasing govt. expenditures? In other words, as unemployment and consumer saving rises, consumer spending will continue to decline. The more consumer spending declines, the less a business will invest in their inventory. The fewer goods businesses sale, the more people they have to lay off. Unemployed consumers spend even less, forcing business to lay off even more! Where does it stop? Where's the bottom? Is it at least conceivable that the bottom is total economic collapse? Is it at least possible that when the economy is in a potential death spiral (as it arguably was and perhaps still is absent stimulus), the only thing that can save it is increased public spending? I understand the argument that bad businesses should be allowed to die off, but in the current economic climate, is that really the best idea? Please address this on your show. I am an econ undergrad student in Texas and I really want to understand what's going on here. Thanks. Jack

Submitted by Jack from Stephenville, TX 76402

A: Way too many questions to answer in any way that does it justice, but you hit on several key themes. For anyone who says the stimulus isnt working, it's really a question of how worse would it have been without it. Consumption is through the floor and things are far more fragile than advertised. What you've described well is what economists call the negative feedback loop, in which all these factors drag each other down in a vicious circle. The stimulus was needed, and is needed, because businesses and the consumers can no longer do enough to keep the economy going. The government spending replaces the falling private sector spending in an effort to cushion was is a fast downward spiral. We've had a terrible credit crisis, and now the business cycle effects are being layered on to a once-in-a-lifetime downturn. The deep drop in stock values, industrial production and several other indicators are on the same downward slope as in the Great Depression. But conventional wisdom is that a depression involves a contraction of at least 10 percent, something that on an annualized basis appears unlikely. But clearly this isn't the roaring 90's!

Answered 07/10/09 23:36:16 by Kevin Hall and Tony Pugh

Q: The news stated, "The Obama administration on Wednesday expanded its foreclosure prevention efforts to help a greater number of underwater homeowners refinance their mortgages. Under the widened program, mortgage finance companies Fannie Mae (FNM.N) and Freddie Mac (FRE.N) will refinance up to 125 percent of a home's value, lifting the current 105 percent loan-to-value cap. My question is, is it true that everyone able to contact Fannie Mae and Freddie Mac to refinance the loan? Is there any other mortgage finance company offering the same term? My ARM loan will expire in 7 years and I plan to retire in 3 years. There are many forclosures in my neighborhood. So the house value is low. Shall I wait until 7 years later to refinance or I should try everything I can to refin while I still have a job?

Submitted by Dan W. from North Las Vegas

A: Good questions and no good answer. The Fannie and Freddie programs are limited to people whose loans are already owned or backed by Fannie or Freddie. Much of the universe of ARMs was handled by Wall Street firms who bundled the loans for sale to privatge investors. You first step is reach out to a mortgage broker or a big-name national bank (they're under pressure to lend more) and see what refinancing options they have. If your home and neighborhood are far "under water" you may have limited refinancing options. But see if they think you can qualify for an FHA loan that will be placed by Fannie and Freddie. If you plan to retire in three years but your mortgage doesnt adjust for seven, then you are probably best staying where you are if you plan to stay in that home even in retirement. But a professional can give you better advice. One thing you must calculate is where is the breakeven point to no longer be under water... for example if you are 20 percent under water and home prices return to a normal growth rate of 3 percent annually, then it would take you more than six years to break even on your investment. That's not a problem if you plan to be there for 20 more years. It is a problem if you planned to sell in three. Lots to weigh both on refinancing and selling. And there's likely a glut of homes waiting to come on the market whenever there is the perception that prices have stabilized.... meaning a significant price rebound is likely a good ways off still.

Answered 07/07/09 11:36:10 by Kevin Hall and Tony Pugh

Q: Since our country is experiencing the worst economic downturn since the Great Depression has Congress reduced or eliminated our Foreign Aid payments ? For example, several months ago the Obama administration was planning to give $900 million to the Palestinians so help them repair damage from their recent border battles with Israel. This seems like a perfect example of something that could have been eliminated.

Submitted by Mike Smith from Arlington, Tx

A: I can't speak to the Palestinian issue you cite, the score keeping on foreign aid is sometimes a challenge since things like AIDs research, UN efforts sometimes don't fit neatly into the equation. Obama's $48.8 billion foreign aid bill passed the House of Representatives last week. That might sound like a lot of money but it is a fraction of what the govt spends. It's in the ballpark of what Citibank and Bank of America got in government bailout, so that should help frame the point that it is a small number given our economic might.

Answered 07/06/09 13:18:41 by Kevin Hall and Tony Pugh

Q: Is there a good future for solar and/or wind generated electricity? The initial start-up costs for solar panels or wind turbines are high, but is there a bottom line return for basically, endless and clean energy production? I would like to hear your projections on these green options. I live in Florida. The "Sunshine State" pays-back a credit on solar energy. Are there going to be many jobs in the solar industry?

Submitted by robert guilford from obrien, florida

A: Not sure I can answer your question in specific, but generally speaking all these alternative energy sources have a future because demand won't be disappearing in a world that has become more developed in the last two decades than most of the centuries before it. The cost of solar production has come down, the size of the units likewise and it is among the many promising technologies that individually won't fix all the problems but collectively will help reduce dependence on fossil fuels.

Answered 07/06/09 12:45:27 by Kevin Hall and Tony Pugh

Q: Please publish this article so that American Citizens can draw their own conclusions about the need for immigration reform. :H-1B visa holders are paid less than US counterparts" http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=cda81c51-7247-4c2a-8e36-2414c5f9686c Please publish more articles about the effect of both legal and illegal immigration policies now in place on the citizens of this country. I really had to hunt for this article, but I see articles practically begging for more legal immigration in American papers and on websites like yours all the time.

Submitted by Cathy Vourtsis from Myrtle Beach, SC

A: here it is, without passing any judgement on our part

Answered 07/06/09 12:43:22 by Kevin Hall and Tony Pugh

Q: Please explain how Gov. Sanford was going against US Policy when he visited Argentina when the US and Argentina have trade relations. American businesspeople travel there to develop corporate programs. Also, in 2008, didn't other American Governors visit Argentina? Who were they and were they in the wrong too?

Submitted by Maggie from Highland Park, IL

A: Best we can tell, no governor visited Argentina from 2002 to the June 2008 visit of Sanford. New Hampshire sent a trade delegation tied to a musical conference and that did not include the governor. South Carolina's biggest export is auto parts and Sanford did not visit anyone in Cordoba, the chief auto zone in Argentina, meeting instead over a luxurious lunch with the head of Ford and other representatives of big U.S. corporations. There was not a formal edict against trade misssions to Argentina, but both federal and state officials generally shunned Argentina in an understood policy because of its debt default, the way it treated creditors and the fact that most of the aggrieved were big U.S. agriculture groups like cattlemen and corn growers. Argentina agreed to pay back its Paris Club creditors in September 2008, months later than the Sanford visit, so any such visits after that point would not be seen in such a negative light.

Answered 07/06/09 12:43:06 by Kevin Hall and Tony Pugh

Q: Is there any chance that Dubya and his administration will ever face criminal charges

Submitted by ed pedraza from floresville, tx

A: Not in this country. But there could be attempts to try them for war crimes abroad, much as Pinochet and others have been sought by prosecutors who seek to carry out what they call universal justice. That was popular in the early half of the decade but seems to have quieted down. There has been mixed movement on whether certain CIA officials might face trial abroad for some of the alleged torture. The Obama administration's view on this has bounced around if my recollection is correct, but I am the econ guy not the natl security correspondent

Answered 07/06/09 12:38:02 by Kevin Hall and Tony Pugh

Q: WHAT IS GOING TO HAPPEN TO MANDATORY STOCK BROKER ARBITRATION UNDER THE CONSUMER FINANCIAL PROTECTION AGENCY

Submitted by JOHNNY M PERRY from DOTHAN AL 36301

A: That level of detail is likely to be addressed through Congress, but most things involving stocks are likely to remain with the Securities and Exchange Commission.

Answered 07/06/09 12:35:55 by Kevin Hall and Tony Pugh

Q: I understand these are trying times for all especially the real estate industry. As a now divorced single mother of five, 100% disabled and trying to redirect my future, I am fortunate enough to have income that is guaranteed throughout the remainder of my life, which is a HUGE advantage these days. I am in the process of trying to buy a house for me and my family and have run into endless roadblocks. Being eligible as a First-time Homebuyer, I am eligible for the $8000 tax assistance rebate. This has been ackowleged by HUD (who I am purchasing the home from) and also the lender handling the mortgage. My twenty year marriage ended causing a pre-foreclosure and eventual sale of our house. My ex-husband, living in the property for the final two years, defaulted on the mortgage many times and I continually had to remedy the financial situation. Now, with my life finally being mine, I have been told I can move forward and am considered a new individual and the past of my marriage could not be held against me. But this is the wall I have run into. How do I handle the contradiction of having a previous situation, that all parties have agreed cannot stop me from getting my house, stop me from getting my house? What are your suggestions? Must it be taken to the highest level and who would that be??

Submitted by Tricia Werdmuller vo from Lancaster, CA

A: I think you can't go wrong asking to talk with a supervisor, but I think you probably would be wise reaching out to HUD to see if they have a credit counselor who can help. Also any number of groups that work with the disabled might be able to provide a person to help you battle the lenders. There is some truth to having a clean slate, but if your name was on the mortgage it will up to some point affect your credit rating I believe.

Answered 06/23/09 15:27:12 by Kevin Hall and Tony Pugh

Q: By claiming the extended benefits on line early. Is there a possibility that the checks could be mail out before July 2009?

Submitted by Angela Dunn from Miami Gardens Fl

A: Don't know. Florida is one of the states with double digit unemployment so I presume things are backed up. States around the country have been overwhelmed in trying to deal with jobless benefits. Online is presumably faster, but I just don't know whether July 09 is doable or not.

Answered 06/23/09 15:24:41 by Kevin Hall and Tony Pugh

Q: In your recent article on the Geithner’s stress tests, you describe the reserve requirements Geithner is requiring as being in the order of tens of billions for each of the banks. I have been trying to make sense of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities (4th quarter, 2008). http://www.occ.treas.gov/ftp/release/2009-34a.pdf They describe the “notional” value of the swaps on the order of many TRILLIONS of dollars: “ The notional value of credit derivative contracts as of the end of that quarter as $15.9 TRILLION, not billion. Only about 5 banks, they say, hold 98% of all swaps. I can’t reconcile how it could be that only a fraction of $1 trillion is involved when the total notional value is almost $16 trillion. One could, of course, make the argument that the bets were balanced by counterparties, but my impression is that they did not do this because many, if not most, were not registered. Furthermore, wouldn’t most of them have bet by that time on a downward slide? For that matter, how are we to know any of this with even rough accuracy? One could also assume the underlying values of the swaps fell by at least 40% as did everything else, although the subprime could have been much worse. Even then, of course, the figures involved are described in the Trillions, not Billions. Have I wildly misinterpreted the tables? I hope I have because some of the figures on swaps go as high as $60 trillion – which would mean that nothing less than a thorough going world wide reorg would be called for or simply a chaotic collapse.

Submitted by Chuck Palson from Boston area, MA

A: Investigative reporter Greg Gordon tackled your question, here is his response: Please forgive our woefully slow reply to your query about credit-default swaps. It’s been a hectic week, but we do try to get back to folks quicker than this. You raise perfectly rational questions about a very complicated subject. But when you get beneath the surface, you can quickly see why it would be hyperbolic to focus on the credit-default figures in the trillions. A large chunk of these insurance-like swaps were written on pools of subprime mortgages or collateralized debt obligations (CDOs) whose underlying assets are securitized mortgages. Typically, the swaps only cover the upper slices, or tranches as they’re known, of each pool of thousands of mortgages, not the riskiest ones at the bottom that are the last ones to get paid in the event of mortgage defaults. One way to understand this is that if you had a pool of like-sized mortgages with a 30 percent default rate and those defaulted homes were all seized in foreclosures and auctioned off, if half the value of the homes were recovered, the overall pool would lose 15% of its investment. So the folks holding credit-default swaps in the top, AAA-rated tiers wouldn’t get hit much. However, rising default rates lead to ratings downgrades that force counterparties in credit-default swaps to post increasing amounts of collateral, as occurred with AIG, the giant insurer at the center of the current mess. That left AIG in a liquidity crisis and forced a massive taxpayer bailout. To get to the full notional value something like this would have to happen: If you had $1 billion in mortgages and they all defaulted, the lender foreclosed on ‘em all and the underlying land and homes were all worthless, but you had a credit-default swap insuring the upper tiers then the buyer of the swap would have recourse to collect in full. Hope that clarifies how this works and you have my admiration for digging around in the bank reports to assess their risk.

Answered 06/18/09 18:37:00 by Kevin Hall and Tony Pugh

Q: I'm a reporter for the Columbia Missourian in...Columbia, MO. I read Tony Pugh's story, and the map was great. While I was excited that we were ranked in the top 6 for being projected to return to the pre-recession employment levels by the end of 2009, I'm still a little foggy on the exact criteria that was used to put us there. It would help me talk to some of the REDI people here along with the local economic development team. Can you point me in the right direction? Or can you expound more upon what went into this projection? Thanks a lot!

Submitted by Jim Holt from Columbia, MO

A: send Tony an email to tpugh@mcclatchydc.com and he can get in contact directly with you.

Answered 06/18/09 18:34:34 by Kevin Hall and Tony Pugh

Q: In past recessions, we always had new emerging industries that picked up the slack for new employment, this time I do not see any new technology or industry that can rehire the unemployed? Coupled with the world is flat, theory, what industries will emerge as the major job growth engines? And when will this take place?

Submitted by David Lewenz from Lakewood Ranch, FL

A: The author of the story, Tony Pugh, responds:Professional and business services will be a high job-growth area as will the green jobs sector, health care and education. Construction will likewise pick up as stimulus bill projects get off the ground and home construction rebounds. How soon the economy picks up will vary from locale to locale. A recent IHS Global Insight analysis of 325 metropolitan areas, or population centers, found that only six would reach their pre-recession employment levels this year, five in 2010, 28 in 2011, 95 in 2012, 79 in 2013, 41 in 2014 and 71 in 2015 and beyond. In other words, it's gonna take some time.

Answered 06/18/09 18:34:03 by Kevin Hall and Tony Pugh

Q: Is there anything you can do about employers cutting hours down to under 32 hours so they don't have to pay for health insurance?? and do unemployment rates include all the people that ran out of unemployment?? or do they just not count anymore??

Submitted by cristal from roseville,cal

A: This answer from Tony Pugh: By law, employers do not have to provide a 40-hour work week or health benefits. Most do so because it helps them retain and acquire the most talented people. Depending on its structure, a universal health care provision could help by providing care for all through a government program or by requiring all americans to purchase health care - with government assistance for those who need it. But if a government-run plan covered those who can't now afford coverage, there's no guarantee employers would use the savings to add more full-time workers. As for your second question, unemployment rates include all people who are actively looking for work, but can't find it. It doesn't include people who have given up looking. So people who have lost their unemployment benefits, but are still looking for work would be included in the the unemployment rate. Those who've exhausted their benefits and aren't looking would not be included. In other words, the status of their unemployment benefits isn't a determing factor.

Answered 06/18/09 18:33:11 by Kevin Hall and Tony Pugh

Q: What is being done to enforce the laws against illegal Naked Short Selling, especially by Hedge Funds? What is being done to penalize and eliminate Failures to Deliver on short sales? Why are "phantom" shares still traded in our markets? impunity?

Submitted by Carl from Philadelphia, PA

A: Good questions, not sure where things stand actually on the naked short selling, it was temporarily banned then went into a grey zone alogn with the uptick rule. I'm not your best source for this technical question, only followed it on the margins. Sorry.

Answered 06/18/09 18:31:31 by Kevin Hall and Tony Pugh