Debt

Try not to choke on your coffee, but the nonpartisan Congressional Budget Office (CBO) projected that the Obama administration policies would dump $9.7 trillion onto the national debt by 2020. The projected national debt by 2020, according to the CBO, would top $20.3 trillion.

Yeah, that's a lot. Put another way, if you had $9.7 trillion and you wrote me a check for $1 trillion, you'd still have $8.7 trillion and I'd be a brand new trillionaire, thank you.

Suffice to say, this projected national debt -- at the equivalent of around 90% of the American economy -- is unacceptable. There's no conceivable justification for digging a hole that deep and thus leaving our national sovereignty to the whimsy of foreign lenders.

A month of lost workplace productivity officially begins Monday with the start of March Madness.

The brackets for the NCAA men's basketball championship tournament will be picked Sunday, and although the games don't begin until Tuesday, the annual march of not doing much work at work begins Monday when workers will return to work with bracket printouts in hand to join office pools to see if they can pick which of 64 teams will win the tournament.

The global outplacement consultancy firm Challenger, Gray & Christmas estimates that workers distracted by March Madness could cost employers as much as $1.8 billion in unproductive wages during the first week of the tournament, which ends April 5 with the championship game.

And that loss is based on only 20 minutes of wasted time per day. That probably only includes a few peeks at scores throughout the day.

We've been hearing for the past 16 months that consumer debt is going down. Well, it's not because people are paying off their debt more aggressively.

Instead, we've learned it's because credit card companies wrote down $83 billion of the $93 billion in credit card reductions. Consumer credit card debt declined by just $10 billion with most of that pay down in the first quarter of 2009.

That's what Odysseas Papadimitriou, CEO and founder of CardHub.com, concluded after he took a closer look at the data from the Federal Reserve. Papadimitriou worked for eight years at Capital One's credit card division before starting CardHub.com. He has his MBA from Duke University.

While many gambling towns offer minimum table-game bets that are anything but minimal, WalletPop found a few cities that welcome you with open arms and low-end wagering.

Steve Bourie, author of the "2010 American Casino Guide," took WalletPop on a quick tour of the nation's bargain gaming dens, focusing on blackjack with a nod to craps and roulette.

Nevada still offers cheap blackjack, except on the Las Vegas Strip. Downtown Vegas has consistent $2 games with house rules that aren't too disadvantageous, Bourie said. (The fewer the decks and the fewer the alterations, such as allowing the dealer to hit when he holds an ace and a six, the better your chances.)

You can also get a $5 single deck game. Dollar craps and 10-cent roulette also help to compensate for downtown's less-glitzy vibe.

If you have plans for that tax refund check, think again. States from Hawaii to North Carolina are delaying refunds to residents because of massive holes in their budgets. And those refunds will likely be processed on a first-come, first-serve basis. Unless you can wait until the fall to get your money back, get that tax return in asap.

Here, WalletPop experts take on questions about 401 (k) withdrawals, payroll taxes and dependent credit.

Question:
The plant I was working in closed in 2008. In November, they sent me my 401(k). They withheld $3,005 for taxes. I also was getting unemployment of $370 a week. I didn't have taxes taken out. So I was on unemployment for a total of six months. I didn't claim the two months in 2008, but I will claim them this year along with the four months of 2009. How do you think I will do on my taxes? I do own a home and have interest to claim. Are there any breaks for being unemployed? I am also single.
-- Bobby Guerrero

This is enough to make me want to move to Pennsylvania. The state will give you a loan of up to $60,000 to pay your mortgage and taxes to keep your house if you lose your job.

Whoever thought of this program, I am sending you cyber hugs. No, no, actually, I am nominating you for president. You feel the pain of the unemployed, the uninsured with the audacity to get sick, the recently divorced trying to stand on one financial leg in the greatest recession of all time.

If you haven't heard of Prosper.com until now, a $1,000 contest and a new web site might get you interested.

Prosper.com is a peer-to-peer lending site. The idea is that if you're having trouble getting a loan at a bank, or maybe you're feeling a bit anti-bank these days and would rather see someone else profit off your money, you might want to seek out a loan with Prosper.com.

Or conversely, if you'd like to invest a bit of your money and see where your funds are going, you may want to check out this site. You can borrow or lend, from the public, instead of the banks.

Many people seem to be confused about my last post about Sallie Mae and student loans. I am not asking for a hand-out. I am asking that loans with interest rates above 7% (I will even concede to 8%) be deemed illegal.

You heard me: ILLEGAL.

There is absolutely no good reason why any loan taken out from any bank should have an interest rate approaching 10%. The interest rate for my loan should NOT be similar to the current unemployment rate in America. That high interest rate can be described as criminal in today's job market.

Age discrimination comes in all forms. FindLaw.com, a legal information Web site, just came out with a new survey that indicates that the younger you are, the harder it will be to get a loan.

According to their survey, more than one in five (22%) people between the ages of 18 and 34 say that they've been turned down for a mortgage, loan or credit card within the last 12 months. But the percentages start doubling once you get to be 35 years of age or more.

Personal finance can be something like a horror movie. In this case, the slasher is an online payday lending service.

For anyone thinking of signing up and taking out a loan, the Better Business Bureau has just released a press release, warning anyone thinking of using an online payday lending service: Don't.

I'll make it more clear, since they have a certain level of professionalism that they probably like to maintain: For the love of everything good and holy, stay away! Don't do it! Don't! You'll be killed!

OK, maybe not killed -- I went a little too far with my horror movie analogy. These services will let you live -- live to regret ever doing business with these sites.

One of the results of the credit card reform legislation that recently went into effect was a dramatic change in the ability of college students to access credit. Anyone under the age of 21 will now need, according to the bill, "financial information. . . indicating an independent means of repaying any obligation" in order to sign up for a credit card.

What exactly that even means is ambiguous. Ben Woolsey of CreditCards.com tells WalletPOP that "The Federal Reserve hasn't explicitly defined income requirements but rather has left that up to the individual issuers."

Some banks may require a payroll stub or bank statement, and others may ask the applicant for the name of the employer and annual income. According to Woolsey, a full-time student with an annual income of $5,000 could "probably" qualify for a credit card -- but with a limit of no more than $500.

The Federal Reserve recently warned that Oregon was facing a delayed reaction to the recession, with foreclosures tipping upward while housing values fell dramatically during the third quarter of 2009. The findings caused an Internet buzz about whether Oregon is becoming the next California. Horrors!

WalletPop talked to two local experts and came away with dramatically different takes on the depth and longevity of the problem.

By any measure, the so-called Home Affordable Refinance Program has been a dismal flop, with only an estimated 200,000 or so distressed homeowners managing to get a permanent mortgage loan modification from their lenders. Not anywhere near the roughly 5 million homeowners the Obama administration originally said it hoped would be helped by the program.

So, of course, what does the government do? Why, it extends it! The initiative will now last until June 2011. The program was set to wrap up at the end of this June.

Now they like you.

For the longest time, it was common knowledge that credit card companies adored customers who were actually terrible with their money. You know, the person who often paid late and kept a high balance but continued using their card anyway. A customer like, well, what I used to be, when I was mired beneath a mountain of debt.

In a recent post in our Money College series, Fruzsina Eordogh described her personal financial crisis brought about by excessive college debt -- especially private student loans.

According to Eordogh, she borrowed $43,000 from Sallie Mae with an average interest rate of 9.5%. She has already accrued $23,000 in interest. She will have to make monthly payments of $690 for 14 years and 11 months before she is debt free.

In a weak job market, her problems are compounded. WalletPop editors asked me to offer some ideas for how Ms. Eordogh can improve her situation, and here's the bad news: It will not be easy at all. Student loans are the herpes of personal finance: nearly impossible to get of. They are not dischargeable in bankruptcy and, if she misses payments, she could end up in default and owe far, far more money.

Here's the bottom line: if Fruzsina is to have a prayer of a financial life in 15 years, she absolutely must find a way to sock away $690/month to make every single payment without ever being late. Plenty of financial aid experts will suggest that she talk to her lenders about getting a hardship deferment: make no payments while the interest continues to add up. The problem with that idea in her situation is that the interest rates are so high that once she starts playing that game, her debt hole will grow exponentially larger and she'll never get out of it. Here are some other ideas: