Financial 411: The Do-Nothing Budget Plan
Wednesday, April 13, 2011
New Foreclosure Rules
Federal banking regulators are ordering 14 mortgage lenders and servicers to revamp their foreclosure practices and even reimburse homeowners who were incorrectly foreclosed upon. The banks involved in the order include the nation's largest: Bank of America, JP Morgan Chase, Citigroup and Wells Fargo. Government officials concluded that banks often seized homes after filing improper paperwork and were woefully under-staffed to handle the surge in homeowners defaulting on their mortgage payments. In the four years since the housing bubble burst, five million homes have been foreclosed upon.
A Growing Tourist Economy
The U.S. economy continues to show signs of improvement. The Federal Reserve said factories are busier and consumers are spending more. In New York City, the Fed said tourism picked up in March. Hotels were busier and more people saw Broadway shows.
Financial stocks fell Wednesday after JP Morgan Chase's chief executive said his bank and others will probably have to pay more in fees and penalties as a result of the investigations into their foreclosure practices.
The Dow Jones gained seven points to close at 12,271.
The S&P 500 was flat at 1,314.
The NASDAQ added 17 point,s to end the day at 2,762.
The Do-Nothing Budget Plan
President Barack Obama outlined his plan to cut the deficit by $4 trillion over 12 years, while also meeting the needs of entitlement programs like Medicare and Medicaid.
But what if Congress and the White House did nothing? No new budget plans, no new cuts, no new taxes. What if the government just backed away slowly from the negotiating table, and left things just as they are?
Slate.com's Annie Lowrey explained what she calls the "Do Nothing Plan for Deficit Reduction." Lowrey spoke about how the sacrifice would be shared if the government didn't pass a budget plan. She also explained why the budget would technically balance itself in 2018 if no changes are made.