eh. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. and we have certainly seen a crackdown in the last few days on occupy wall street from police and over the last sixty days arguably from critics who to write to them as socialists the problems are many americans simply don't understand what's at stake here the occupy wall street movement is basically socialistic it is socially was a government to control who gets who are if that's the problem then what about the government handouts to people who don't need them will tell you about the wealth redistribution that has billions of dollars in subsidies going to millionaires and speaking of government payouts how about more than a million dollars in

a signing bonus for joining one of the mortgage giants controlled by the u.s. treasury i would doubt millions paid out so with executives i'll tell you it's a much better payoff than the one for most other u.s. taxpayers who spent one hundred seventy billion dollars to rescue fannie mae and freddie mac. in the most expensive bailout of the financial crisis and the deficit commission the so-called super committee has a week to come up with a deal to downsize the deficit by one point five trillion bucks over a decade now the mainstream media has already been counting down to what exactly even if this deficit commission gets a deal it is barely a dent in the fifteen brilliant dollars debt load already racked up by the u.s. we'll take a look at what this all means let's get to the day's capital account. ok

we have been talking a lot about the eurozone debt crisis lately so we thought what about the debt problems brewing right under our nose here and washington's should we give you a closer look at those because the u.s. is own public debt to g.d.p. ratio is now one hundred percent france and spain for comparison have lowered debt to g.d.p. ratios now the super committee of course has been tasked with downsizing the u.s. deficit they're trying to get it down by one point five trillion dollars over a decade now they have a week to come up with this deal now they're down to the wire a lot of people are worrying about whether they'll reach a deal or not we asked does this really matter because is the problem much bigger then that deal today haven budget analyst at the cato institute is here to answer

that question because studies this very closely thanks for being on the show i think you have absolutely so the supercommittee as i said it has a week to cut one point five trillion dollars sounds like a lot but this is over ten years and they can't agree how to do it so my question to you is this a joke when you look at the fact that the united states already has fifteen trillion dollars in debt right now. well washington really is a joke i often say to the one town in the united states where the circus never actually leaves and i really we're having now with this with this current discussion is basically continuation of what we had earlier in the year when publicans took over control of congress they were basically given a mandate to try and rein in government spending and that's kind of hard to do you have you got ministration control you have harry reid in control of the senate and also added i'm not really convinced the republicans are serious about cutting spending you know in fact they've been threatening now some folks there are they

will not accept that struts if the deal doesn't get done here in the coming weeks and some of the senate rather have tax increases and sudden runs cuts alone on this well go ahead well i just say it's certainly a song and dance that we've heard before anybody has been covering this even just in the last year with the debt ceiling and with these budgets that don't get passed and so down to the wire i want to play a little bit what republican presidential hopeful ron paul also a texas congressman said actually this morning at the cato institute about this commission that i don't think there's any serious talk on the hill i don't think a super committee is anywhere close i don't think any of the alternatives over there are any where thinking about the seriousness of this because they talk about cutting a trillion dollars over ten years the only thing that counts is next year next year . and he says next year we should be looking at a trillion dollars for next year i actually want to bring in our producer and he has a question for you about that it has

a gong. my question has to do with that exactly so beyond ron paul who's who's looking at some serious budget because he's talking about cutting entire departments is anything else simply not enough we've seen in europe what happens in developed countries where they reach a threshold where the market size that they're not going to fund them anymore and they get priced out of the bond market do politicians in your view in your experience having worked in washington do they understand that there is a point there isn't any magic number but there is a point at which markets simply price you out and at that point the u.s. government can decide whether it wants to continue spending money and pretty its way of doing that and have inflation or it's going to have to come back to the understand that there is that point is there any sense of urgency in your experience. there are a couple but by and large congress is a little boy girl scouts club and they're there for one reason and that is power and to basically control people's minds and all these discussions we're having whether it was doing crease the debt ceiling or to avoid

a government shutdown everything revolves around november two thousand and twelve and that's basically what you can refer to as the political elocution super bowl and this is one of these you know we finally decide who's going to control our for the next two to four years in the meantime they just continue to kick the can down the road ron paul is correct in this far as i'm concerned easy only presidential contender who really not only recognizes the past and riya the problem but is actually putting forward the necessary solutions with regard to the spending side ledger and i understand the size of the school government that's the problem we're not having that discussion we're focusing on whether or not herman cain you know fooled around with one of the scenes on his way we need to be having a deeper philosophical discussion with the american people and the politicians don't want to do it the politicians want to promise that we can just solve our problems but limiting waste fraud and abuse that we can just pack some rich people and all the well there's simply lying or they're being purposely dishonest or quite

frankly they're just ignorant and believe me having worked in the senate i've been around a lot of ignorant folks i'm thinking of ignorance i actually want to ask you a little bit more about what your take is on these actual cuts that the super committee is looking at and i ask because of the report that they're looking at worth saving over the next decade as up to a trillion dollars of these savings and from what i understand the department i'm pretty sure doesn't have any power over the deployment of troops and the number that they're using would just kind of arbitrary but with the a.v.o. figure where they plug in a number so to what extent are these cut real versus i can't get. oh i think there's a more than likely chance that they can resort to again because those sides want to resort to get makes and that's basically an accounting costs in iraq and afghanistan that were never given serialised begin with and as i mentioned earlier if the republicans support supposed to be the party of limited government and wants to cut the size of the scope of the government or have said they'd rather have tax

increases in the truck to ransom and this shame of it is really not talking about true cuts and this is a game the democrats are very good at what we're talking about is reducing projections of higher spending and democrats always call it cut when it comes to social welfare programs republicans are not on the same thing with pencil and spending and to what extent you know we're talking about the supercommittee but because you look at that girl budget so closely to what extent more broadly are accounting gimmicks in effect in that and the public budgets. oh i think that that's that's where they're going to turn in fact of the matter is it's the big programs it's the entitlement programs social security medicare medicaid and i would throw into that defense spending that when you factor in veterans affairs department homeland security you're talking about close to a trillion dollars a year in spending all that stuff is basically the table even pretended it's on the

table but it's really not it is a matter of fact i think don't get a deal done it does move to us cluster things like medicare social security food stamps all of that's off the table and i think what will happen is that they'll come in because keep in mind all these trucks sequester ation very correct in two thousand and thirteen or two thousand and thirteen is after november of two thousand and twelve and then on so. you know there's the not so hidden secret in washington is that they're just going to come in in no fly evers to be tried in the home they're going to notify it will be made out and at the end of the day they will still be able to notify it so it doesn't do anything real quickly i just have a minute but i want to bring up a chart because we're talking about waste fraud and abuse and senator coburn put together these subsidies that millionaires get from the u.s. government so while we talk about tax cuts like you talked about or increasing taxes for the rich like we are on the left or the fact that we can't do that because their job creators which we hear on the right but to what extent does

reducing waste spending on people that don't need it how much should that be on the table does it matter. look go ahead with regard to waste fraud and abuse you're going to have that you know that comes with government the same way a coke and fries comes with a happy meal and you know one person's waste is another person's job creating a project and the dirty secret again with this millionaires and billionaires collecting subsidies is people who want big government want more people depending on it because the more people depend on it it increases the demand in the support and it gives these people in washington the justification for their lives there you go we're going to continue the conversation because there's so much more we want to get to with you i'll have more with had behaved and budget analyst at the cato institute that's after the break.

all right time now for word of the day where i break down a financial term or concept for our very smart your but perhaps not the financial expert in our audience and today the phrase is government sponsored enterprise and it matters because for one i want to talk about it with my guests in the next segment and also also is this blogger in the chicago sun times puts it gigs for political figures have been sweet at freddie mac. and fannie mae the now disgraced government sponsored enterprises supposed to stabilize the mortgage markets and freddie mae or freddie mac. excuse me and fannie mae are really kind of the best examples of government sponsored enterprises so what are these exactly they're better known as g s e's they are privately held corporations with public purposes created by the u.s. congress to reduce the cost of capital first certain borrowing sectors of the economy members of these sectors include students farmers and homeowners so let's look at the case of fannie and freddie because this has to deal with homeowners and

i want to bring up some of the major bullet points so fannie mae was created during the depression as part of the new deal freddie mac. came a little bit later why were they created they were an attempt to raise levels of homeownership and the availability of affordable housing and in the ninety's i just want to remind you under george h.w. bush and the clinton administration's they for the first time had affordable housing goals and pressure to expand loans for low to middle income borrowers so that's kind of the conception but how does it work exactly because this is what it sees favorable interest rates is one and high securities prices due to the government guarantee so the implicit guarantee of government basically allows them to have favorable into. straits and to get a high price for securities because the guarantee is that the government won't let them too well let them default or that sort of thing now this was tested during the

housing crisis which made the fannie and freddie and solvent and alone the whole the us government did bail them out and took them into conservatorship and they became controlled by the treasury the u.s. treasury making them effectively part of the government now this is not according to me this is according to the cvo they view them as part of the government now at the time what are their outstanding guarantees their mortgages look like three point eight trillion dollars that's a lot of money that's as of september two thousand and eight and today along with the f.h.a. they guarantee ninety percent of new mortgages so this all explains why if you're a u.s. taxpayer you spent one hundred seventy billion dollars to rescue these firms and it also explains what makes them a g.s.c. of government sponsored enterprises. now still ahead right now capital house don't go away what does an executive at fannie mae which is it controlled by the u.s. government as you just heard have in common with an n.f.l.

rookie you don't know and look at you the answer in a second but first carrier closing stop the birds. just put a picture of me when i was like nine years old and so she told the truth. i confess and i am in total get over friends that i love dr and hip hop is second to last and first. he was kind of the jester. i'm very proud of the legends you it's played.

you know sometimes you see a story and it seems so bleak you think you understand it and then you live something else here's some other part of it and realized everything you thought you knew you don't know i'm charged welcome to the big picture. what drives the world the fear mongering used by politicians who makes decisions to break through. who can you trust no one. is you know with the global machinery city where we had a state controlled capitalism school sessions when nobody dares to ask what we do our t. question more.

welcome back before the break we asked what does a recently signed pro sports player have in common with an executive at fannie mae well we have the answer how about a signing bonus of more than a million dollars now the only problem here is in the case of fannie mae and freddie mac. they owe taxpayers one hundred forty one billion dollars they are part of the government in the view of the cvo and even though they continue to lose money their executives are doing fantastically i'll show you just how well they're doing so if you look at this chart you can see that exacts at fannie and freddie are raking in millions of dollars and way down at the bottom there is the u.s. president who you know makes a decent salary by a lot of comparisons but it's a lot less than what they are getting if you are an executive at fannie mae or freddie mac. ok eight hundred thousand dollars compared to millions now lawmakers at

a hearing about this on the hill today but we talked about all the issues of politicians we don't want to say what they have to say we want to listen to what ted a haven a budget analyst at the cato institute has to say about it chad i want to bring you back into the conversation to ask if this is really a new level of cronyism where you have executives getting millions of dollars in government sponsored enterprises that they run that the government now controls. there's just no surprise here at least for you know folks like myself who years ago said that fannie and freddie would end this path disastrously and you had a situation where you know it's a nominally private company where the you know the profits went to the owners and the shareholders that the losses would eventually be social and spread across the taxpayers and you know when and when the dust settles in the history books are

written will look back upon painting freddie as one of the more scandalous episodes in the history of the u.s. government and the politicians were in the back pockets of pain and freddie and so now what you have is that you know it's being protected because it's gone under and it needs government support to keep it up but because the you know the various housing that realtors association the mortgage bankers are they are so dependent on the federal government in terms of subsidizing their livelihoods that they can't and will not allow betting frannie to just disappear and so that's the big question going forward is what are we going to do with me and freddie exactly right and that was my biggest question to you know fannie and freddie are just sitting there a look back at the government going to do it that they have all of these you know billions of dollars hundreds of billions of dollars that i'm realizing often. they're waiting for the housing market recover despite all the evidence that hasn't happened and again they're waiting until after november of two thousand and twelve because the administration. doesn't want to touch it since this is

a touchy subject and they're out again and i would say somewhat unfortunately when you have this issue of what these executives are being paid basically being subsidized by the taxpayers that gets the attention of the regular taxpayer but unfortunately taxpayers need to have a deeper understanding of what's going on here and deeper recognition that the federal government's involvement in the housing market is the problem not the collective pay the pay is a byproduct work better government should be involved as that one graphic showed over ninety nine or ninety percent of mortgages in this country are now being originated or backed by the federal government and so talk about not learning your lessons this is like putting your hand on the stove burning it burning it right back on welled up and you bring up a lot of really good points and we've seen a housing administration has really gotten a lot more involved from what i understand since the financial crisis and now there's a fifty percent chance according to i think their audit they don't need a bailout so i think goes back to your question is why is the federal government

still so heavily subsidizing housing this ike the housing crisis despite how bad housing still it. two reasons one when there's a problem in this country the american people turn to government mass consultants or like asking the arsonist to put the fire out but unfortunately that's where we're at in this country number two is the special interest in washington absolutely dominating the issues you and they have dominated for years on it and the folks up on the hill the congressmen but their staffers is also revolving door a lot of these people go in and out of the housing industry fannie and freddie back in the government their staffers that are up in the white house and this is a bipartisan issue and so again the losses are socialized across the american people but all of these facts as including the politicians and their staff and these advisory ministration they're all cashing in on this and the united states continue to for doing that at what point did the three typing point where they can more or you know everybody across the ideological spectrum this is going forward

our budgetary situation is unsustainable the argument is over what to do about you know one side that basically says that when these attacks are way out of it you have another side it nominally says that we need to cut spending but then they put forth no real effort no real specifics on what they cut because they're afraid of just to square with the american people that it's the programs they depend upon the most social security medicare defense and things like that that needs to be cut but again nobody other than a few people like ron paul and speak up and tell the truth and by our stomach and vince the good american people want to hear well i mean you bring up a good point because this is going to the very essence of what many people consider the american dream you know ideas about homeownership and how that should be achieved i really appreciate you being on the show down clearing up a lot of that because i know you crunch the numbers much more heavily than we do at our start had only been that dark out from.

all right we've got you with depressing facts and alice. the u.s. is books essentially the u.s. capital account. now we want to look at some things that are maybe a little bit slightly more uplifting or at least offbeat and i have our producer to make sure i hear in the studio to talk about some of these stories along with shannen donahoe in the control room to also offer her insight because one story that really stuck out to us was this one china has identified eleven professions most likely to leave you single because of course this is the other side of kind of you know jobs in the economy not sort of thing or the social aspect of it so topping the list of who is going to be single are poets secretaries lawyers and i

want lawn journal and numbers and this is so depressing this explains so much. well you know a lot a lot of the the commenters of you tube i've noticed would be interested in knowing . the status of you. and so you know obviously kind of your way or the native with us then because apparently this is a major occupational hazard for us that we are concerned about. are you concerned about this occupational hazard. i'm not as much concerned about the occupational hazard but i think it's more. people to live up to our high expectations and a perfectionist. where you're going to want to go to one of the audience if you're single or not just let. you maybe some eligible you know women want to know your status or is there a list that's true and it probably works in my favor actually right ok there's

a lot of single ladies surrounding you. really the coaches who as i say for ok let's move on to do something slightly less personal so that we don't have to feel so uncomfortable up here. this is kind of person actually people are really into their pets obviously i didn't realize that they can take out life insurance on their pets are excuse me it's pet insurance fraud no no it is life insurance on their pets but now they're committing pet insurance fraud they're killing their animals to get the insurance on them and it's quadrupled in the last year the fraud that's just killing them so then i'm going to exist in the first place so they feel an injury. free can actually move they could pretend that the animal die when it didn't are so there's all sorts of frauds going on with animal insurance i mean this is an incredible story i think it just shows how creative human beings can be with fraud it's a microcosm was going on in the larger society has been in the banking system ok aside from this sickening aspect of maybe killing is not creative because you're

pretending that an animal just who didn't exist have a couple of names and then also you can do that with human hold on whoa i think we're missing a major point here which is why is there life insurance on animals. why can you get life insurance on your pet your pet is not responsible for your livelihood you're not going to go to the poorhouse if your pet dies i'll show you how this organ with him before showing he was going to throw a camera right now and cats are part people's families and pets are very expensive you can buy parts that have and it's not even like cats that are predisposed it is also pets you just got five get a spider bite and have to correct it so if you pay for insurance when you have to get your cat to that it doesn't cost as much of a god that sure it's not life insurance right again why anybody should be compensated because they're. because dying is flat but you get money for the sad if i got money for being sad i could be rich or crazy i mean that's the way that

people get life insurance payouts when people die so why can't they get it when animals die because you get insurance because that person is ok if you're maybe you know you have a spouse that's responsible for your financial well being and they die you'd be in dire straits as a result you need the money you're drawing the responsible for happiness you little fluffy cuddle eat joyous thing you have and you can't make your money unless they're a show dog so i say i can assure you i'm not. going our dog yeah i forget it ok pets can make you look longer ok well whatever so then maybe they should be taking a life insurance policy out on people spending bill and congress this one really quickly allows congress or excuse me it allows tomato paste on pizza to be counted as a vegetable now this is just ridiculous i mean i don't share wherever we are poor. that was caught. right the this is i remember when reagan did this in the movies he made catch a vegetable all right so this is nothing new in my opinion this is

a story yeah we know that ketchup is a vegetable kids you know all the same song and dance you can make anything anything else if you just say so perception is reality and that's it for our show so we have time for thanks for tuning in please feel free to follow me on twitter at lauren lester to give us feedback on the show at youtube dot com slash capital account and lauren lyster until next time have a great. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else here so you saw the part of it and realized everything you thought you knew you don't know i'm sorry blog is a big. culture

is that so much of and there's a huge musician on the market the story is going to be made to his rebound any military operation against syria though this could change in the exchange on the ground. a very warm welcome to you this is your news today protesters on the. streets they have. ladies and gentlemen your chance of a chance to get a glimpse of the status of the human experiment is

a single currency we pursue a local business run supported those lewis libby trial the sense of global economy and it's all changed since us financial temple these are the reasons why ambling to maintain our confidence in markets and taking on the critics wants to be seen trade imbalances recession look even the nation's close to collapsing in sub prime loans to close hull the fail simple a balance again feelable such thing as us crash and i wanted to smash the ceiling team players apply culture to the clubs in athens greece the i.m.f. the problem just programs increase the total economy. if. you.