News & Current Affairs

July 15, 2009

Price of habit chokes US smoker

Filed under: Business News, Latest, Politics News — Tags: , , , , , , , , , , , , , — expressyoureself @ 6:06 pm

Price of habit chokes US smoker

Josh Muszynski

Josh Muszynski: ‘I thought someone had bought Europe’

A man in the United States popped out to his local petrol station to buy a pack of cigarettes – only to find his card charged $23,148,855,308,184,500.

That is $23 quadrillion (£14 quadrillion) – many times the US national debt.

“I thought somebody had bought Europe with my credit card,” said Josh Muszynski, from New Hampshire.

He says his appeals to his bank first met with little understanding, though it eventually corrected the error.

It also waived the usual $15 overdraft fee.

“It was all back to normal,” Mr Muszynski told his local television station, WMUR. “They reversed the negative balance fee, which was nice.”

Debt crisis

His nightmare began when he checked his online bank account a few hours after buying the cigarettes.

He thought he would be a couple of hundred dollars in the black. But his overdraft had pushed him into the red – by an amount equivalent to many times the entire US national debt.

“It is a lot of money in the negative,” he said. “Something I could never, ever, afford to pay back.

A copy of Josh Muszynski's bill

The 17-digit amount on his online bill shocked Mr Muszynski

“My children could not afford it, grandchildren, nothing like that.”

In panic, Mr Muszynski rushed back to the petrol station, but they were unable to help. He says he then spent two hours on the phone with the Bank of America.

Eventually, it assured him it would be fixed – and the next morning, it had been.

But no-one has yet explained to Mr Muszynski how such a astonishing error could have been made.

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September 13, 2008

‘Catastrophic’ storm hits Texas

‘Catastrophic’ storm hits Texas

Hurricane Ike has made landfall on the Gulf coast of Texas, where it is expected to cause “potentially catastrophic” flooding and damage.

It hit land at Galveston at 0710 GMT, with winds of up to 110 mph (175km/h).

Much of the city, which in 1900 was the scene of the country’s deadliest hurricane, was already under water after a 12ft (3.7m) storm surge.

The eye of the storm, which has since weakened to a Category One, is turning away from Houston, towards Arkansas.

Outside walls and ceilings have collapsed, the glass atrium in the lobby [of our hotel] shattered

Mandatory evacuation orders affected more than one million people, but there are fears for up to 90,000 people across Texas who officials say decided to brave out the storm.

In Galveston, an estimated 23,000 residents stayed behind.

President George W Bush, who earlier declared a federal emergency in Texas, said the federal and state authorities would conduct the recovery effort together, bringing in generators and ensuring water and ice supplies.

US Homeland Security Secretary Michael Chertoff is due to arrive in Texas on Saturday, weather conditions permitting, he added, speaking at the White House.

The US Environmental Protection Agency has waived federal clean air regulations for petrol sold in states affected by the storm, in an effort to reduce fuel disruption.

Ike has halted more than a fifth of US oil production, forcing 17 refineries in the Gulf of Mexico to shut down as a precaution.

Rain and debris

Jessica Willey, a journalist based in Galveston which lies on a small island off the coast of Texas, told it was the worst storm she had ever seen:

See the likely path of Hurricane Ike through the US

“The rain is coming sideways. Debris is flying through the air. Things are getting ripped off buildings every second, and flying through the air.

All emergency workers have been pulled off the streets until daybreak when a curfew will be lifted.

“We hope we will find the people who are left here alive and well,” said Galveston mayor Lynda Ann Thomas.

There is widespread flooding, and a hospital there is under at least 9.8ft (3 meters of water). The city has lost power and a number of houses are reported to be on fire.

Residents of low-lying homes were warned they faced “certain death” if they stayed.

Haitian appeal

At 1300 GMT, Hurricane Ike was about 20 miles (30km) south-southeast of Huntsville, Texas, with top sustained winds of nearly 90mph (145km/h).

It was due to pass through eastern Texas during the day, reaching western Arkansas on Saturday night, according to US National Hurricane Center.

US officials have warned as many as 100,000 homes in Texas could be affected by flooding.

Nearly 4.5 million people in the Houston-Galveston area are without electricity, a spokesman for power company CenterPoint Energy said.

Ferocious winds and rain have been lashing at his hotel for 10 hours.

“We are largely trapped here,” he said. “The power went out five hours ago, the lowest floor is submerged. Outside walls and ceilings have collapsed, the glass atrium in the lobby shattered.

“With the threat of rising seas, hotel guests have been ushered into the concrete stairwell, the sturdiest part of the building, and urged to climb to higher floors.”

The massive system is causing flooding along the Louisiana coast, still recovering from Hurricane Gustav earlier this month.

1900 GALVESTON HURRICANE
Men carry out bodies from the wreckage after a hurricane in Galveston, Texas, in 1900
Thought to be worst natural disaster in US history
8,000 people killed
130mph (209km/h) winds and 15ft (4.6m) waves swept homes away

Authorities are trying to avoid a repeat of 2005, when some 110 people died in Houston during a chaotic evacuation in the face of Hurricane Rita.

Mr Chertoff said Ike was a “potentially catastrophic hurricane”.

Earlier, it caused devastation in Cuba and Haiti, where hundreds of people have died in several tropical storms over the last month.

The Haitian Prime Minister, Michele Pierre-Louis, believes one million people may be homeless, and has called for international help.

The UN says more than $100m (£55.8m) is needed.


Are you in the areas affected? Are preparing to evacuate or are you staying in your home? Send us your comments and experiences

September 9, 2008

Economic battle is joined in US race

Economic battle is joined in US race

Jobseekers at a jobs fair in California. File photo

Unemployment is rising in the US as the credit crunch hits home

With just two months to go before the US presidential election, the state of the economy is far and away the biggest concern for most US voters.

The credit crunch has inflicted severe damage on Wall Street, left millions at risk of losing their homes, and millions more in negative equity.

Unemployment has risen above 6% while high petrol prices and rising inflation have squeezed household budgets to the limit.

Things are unlikely to get any better soon. Most economic forecasts suggest that the economy will slow sharply in the rest of 2008. The first official figures will be published in late October – on the very eve of the election.

TOP ISSUES
Economy: 39%
Iraq: 14%
Gas prices: 4%
Source: Washington Post/ABC News telephone poll, 19-22 August 2008, sample size 1108, margin of error +/- 3%

This is the background for a battle over economic policy that has so far been dominated by two issues – energy prices and taxes.Senator McCain made headlines by calling for a temporary suspension of federal gasoline taxes over the summer. He favors a major expansion of nuclear power and further drilling for oil on the US continental shelf. His running mate Sarah Palin, meanwhile, is a strong advocate of further development of Alaskan oil and gas reserves.

Mr Obama has called Mr McCain’s proposals “the same old gimmicks” though he has recently softened his outright opposition to drilling.

His energy plan calls for a big effort to shift the US towards cleaner energy, a windfall tax on oil companies, and a $50bn government investment plan to promote “energy independence”.

Tax cuts

To boost the economy, Senator Obama and many Democrats in Congress would like another stimulus package, worth around $50bn – following on from the $168bn package already put into effect – and more aid to help people at risk of foreclosure to stay in their homes.

But the growing size of the government’s budget deficit, which is expected to more than double to $400bn next year, limits the scope for further action of this kind.

It’s the size of that deficit that has put taxes at the heart of the economic debate between the two candidates.

Mr Obama wants to repeal the “tax cuts for the rich” of the Bush administration, and use the money to give further tax breaks to the “middle class” (all taxpayers earning less than $250,000), including special tax relief for college education.

He also has ambitious plans to use the tax system to boost jobs, provide subsidies for healthcare, and help redistribute income to the working poor.

PORK- BARREL POLITICS
Commerce: $9bn
Defence: $9bn
Military construction: $6.6bn
Energy: $4.6bn
Transportation: $3.2bn
Foreign aid and exports: $14bn
Congressional earmarks in FY 2005. Source: Congressional Research Service

Senator McCain, however, reversing his earlier position, wants to keep the Bush tax cuts, which he argues will help small businessmen and lead to more job creation, while balancing the federal budget by eliminating wasteful spending.He has attacked “earmarks”, the system of “pork-barrel” politics where individual Congressmen and Senators get extra spending projects for their districts by attaching riders to important bills.

The most infamous of these pork-barrel projects was the $400m “bridge to nowhere” – which would have linked the 7,000 people in Ketchikan , Alaska, with their airport on Gravina island, replacing a three-minute ferry ride – promoted by the now-disgraced Alaska Republican Senator Ted Stevens.

It was Sarah Palin’s role as governor of Alaska in ultimately blocking this project which first brought her to the attention of Senator McCain.

But earmarks make up only $50bn of the $2,000bn Federal budget, according to the Congressional Research Service, and two-thirds of them relate to military spending or foreign aid, which Mr McCain has pledged to preserve.

Balancing acts

The ability of both candidates to project bold economic policy initiatives has been limited by disagreement within their own camps.

Manhattan street scene - file image

Wall Street wants a fiscal conservative – but small businessmen want tax cuts

Mr Obama’s economic instincts appear to lie with the moderate wing of the Democratic party, to judge from his appointment of Jason Furman, a close associate of former US Treasury Secretary Robert Rubin as his economic advisor.These “Rubin” Democrats persuaded the last Democratic president, Bill Clinton, that balancing the budget was more important for long-term economic growth than new spending programs.

Senator Obama has emphasized “nudge” economics, where the government tries to encourage individuals to take out private pensions and healthcare, rather than big new government programs.

But he faces pressure from the Democratic base, which is expecting him to tackle the lack of healthcare coverage for one in six Americans, and from the unions, which want him to do more to protect American jobs from “unfair” foreign competition.

Expanding health coverage to all children, as he has proposed, could cost at least $100bn a year.

And his support for renegotiating trade talks to include clauses recognising workers’ rights has worried businessmen.

Senator McCain, meanwhile, also has to appease two conflicting constituencies.

Many traditional Republicans share Mr McCain’s original beliefs in small government, low taxes and a balanced budget – as, mostly, does Wall Street, the US financial centre.

However, the Republican Party in power increased spending, especially on defence, while cutting taxes, leading to growing deficits.

Mr McCain backs higher defense spending, and in recent months he has increasingly leaned to the “supply-siders”, Republicans who believe that tax cuts are more important than balancing budgets – a view many small businessmen on Main Street, struggling in the economic downturn, would endorse.

Empathy

Both parties are also divided on how far the government should go in bailing out homeowners and banks who are the victims of the credit crunch.

Many Main Street Republicans are outraged by the idea that people who undertook irresponsible home loans, when they knew they could not afford them, should be bailed out – a view Mr McCain sometimes reflects.

And many left-leaning Democrats believe that the big banks and their shareholders who irresponsibly promoted sub-prime lending should be allowed to fail, rather than being bailed out by the US Treasury – as happened with Wall Street investment bank Bear Stearns and now the government-sponsored giant mortgage lenders Fannie Mae and Freddie Mac.

The policy solutions so far put forward to ease the credit crunch have been agreed on a bipartisan basis between Congress and the Bush administration.

WHO DO YOU TRUST MORE TO HANDLE THE ECONOMY?
Barack Obama: 50%
John McCain: 39%
Neither/None: 9%
Source: Washington Post/ABC News telephone poll, 19-22 August 2008, sample size 1108, margin of error +/- 3%

But voters have consistently expressed more confidence in the Democrats’ ability to handle the economy than the Republicans’ – so it’s a puzzle why this has not translated into a decisive poll lead for Senator Obama.

This may be because the battle is really over perception – which candidate has more empathy for the economic plight of ordinary Americans.

The choice of Sarah Palin as Mr McCain’s vice-presidential candidate was partly an attempt to put an “ordinary hockey mom” at the heart of his campaign.

Senator Obama, for his part, devoted much of his speech at the Democratic convention to the difficulties faced by hard-working Americans – perhaps hoping to banish the memory of his comments in March about “bitter” small-townspeople.

“It’s not because John McCain doesn’t care – it’s because John McCain doesn’t get it,” he said.

If Americans are persuaded that one candidate both understands their problems and can fix them, that could be the key to an election victory.

So far there is still everything to play for.

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