The Fed Prints Trillions to Stimulate the Economy; IRS Says Scam to Take Tax Incomes, Stimulus Checks Increasing
LEMON: In case you're just tuning in, here's a quick roundup of the stories that we're covering for you today on</s>CNN: 218 million dollars, Connecticut's attorney general says that's how much AIG paid out in employee bonuses, 53 million more than what it earlier reported. Seventy three employees received at least one million dollars. Seven of them received over four million dollars each. That's according to those documents. AIG says it reported everything. We'll dig deeper into the story tonight, 7:00 p.m. Don't miss that. Sixteen tons of toxic acid have spilled in a town in eastern Pennsylvania. The tanker truck carrying it tipped over in that accident; 5,000 people were told to get out of Dodge until it was all cleaned up. More money, more problems. That's what we hear. The government is doing all sorts of things to try to get the economy moving again. This week, they've printed a trillion more dollars. How exactly does that help out in all of this? Let's turn now to Josh Levs, to help us get through it. Josh, how does it? Just print more money?</s>JOSH LEVS, CNN NEWS CORRESPONDENT: Doesn't it feel like trillion is the new million?</s>LEMON: I was talking -- I was doing radio and saying trillion is like the new, you know, 100. Can wee just keep rolling in out? A trillion, yes.</s>LEVS: A trillion. In two years, we'll be like, oh, yeah, another quadrillion. What are we going to do? I'm just kidding. That's not going to happen</s>LEMON: There's truth to that.</s>LEVS: Yes, I know. Let's not depress everyone. We don't have reason to believe it will happen. The Fed did do this. they did print a trillion dollars during the week. It's cool to look at the video and see the dollars rolling out. Some people find it cool. But here's the thing. I want everyone to understand where the money is going. What the whole point of it is. Let's go to the graphic that will break it down for you. We have a pie chart. This is a basic idea. You can see where it's going. Don, you have $750 billion going to mortgage-backed securities and $300 billion to treasury securities. The goal of those two things basically is two-fold. One is to lower mortgage rates. The other is to make it easier for the government to borrow money. By putting all the money out there, by buying up those things, it should be able to do those two things, lower mortgage interest rates and make it easier for the government to borrow money. There's one more thing, Don, also. That is they are pushing for a little bit of inflation.</s>LEMON: Wow. What?</s>LEVS: Yeah.</s>LEMON: Inflation is a bad thing. I think we just did a poll recently that said it's a top economic concern that Americans have. They're worried about inflation.</s>LEVS: It's one of the top ones. Here's the thing. Let me show you a quote. This comes from Investor Guide. A lot of people don't realize. "Some inflation is good. But it's essential the organizations like the Fed keep a close eye on the status and make the necessary adjustments." One more quote from the Fed saying they're worried inflation is isn't high enough. They say is "could persist for a while below the rates that would best foster economic growth and price stability in the longer term." But, yes, long term, lots of inflation is a bad thing. It can hurt the economy. But when there's growth, there's always some inflation, so they need a level of inflation.</s>LEMON: So why is some inflation -- is good, just because it's normal? Why is that?</s>LEVS: It's incredibly complicated, but the basic idea is that if you're going to have some growth, it will automatically mean there's some level of inflation going on. It still doesn't feel good when you see the prices going up.</s>LEMON: OK. OK. What about the trillion dollars we've been talking about? Does it work? Do we know so far?</s>LEVS: Here's what we know. It caused mortgage rates to go down a little bit. And it has caused some inflation. In fact, you know what I can show you, the figures that show what happened with the mortgage rates. Let's see what Ali Velshi reports.</s>ALI VELSHI, CNN ECONOMIC ANALYST: So a dramatic effect. A lot of people thinking that the Fed has done something the White House hasn't been able to do. It's been a big deal even amongst all of the other business news that we've been talking about.</s>LEVS: That was what happened there. It dropped from the 5 percent down to 4.68 percent. So, so far, yes, some things are happening they did plan for. But the truth is long term, could this hurt the economy? Yeah, it could, depending what happens.</s>LEMON: All right, Josh. Thank you very much. We appreciate that, your reporting. Also, you saw Ali Velshi there. Join him at 8:00 tonight. There's a big special coming up called "AIG, Facts and Fury," 8:00 p.m. eastern. Our money team on top of all of it for you. Josh Lev's here doing fact checking as well. Thousands of Americans were promised stimulus checks and tax refunds. In some cases, criminals are the one who are cashing in. It's a scam. The IRS says it's on the rise and could affect any one of us. Special investigations unit correspondent, Abbie Boudreau, has a story for you.</s>ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice-over): Brenton King is a 25-year-old father and husband. He says he was only 17 when someone stole his wallet and his identity.</s>BRENTON KING, IDENTITY THEFT VICTIM: I started receiving letters from the IRS. And the letters were asking me to pay taxes for a lot of income.</s>BOUDREAU: King says for years at least five people used his Social Security number. Since the criminals earned income on his number and never paid their taxes, the Kings can't get any tax refunds from the IRS or government stimulus check.</s>KING: We want to put that in the bank. We want to be able to put money down on a home.</s>BOUDREAU: The Federal Trade Commission says more than 50,000 Americans have fallen victim to this type of identity theft. It's a way for criminals to file false tax returns so they can get refunds or evade taxes all together.</s>KING: From before we file our taxes, we know we're not going to get anything back. It's frustrating.</s>BOUDREAU: King says when he went to the IRS to report the problem, no one believed that he was the real Brenton King. Senator Chuck Grassley says he feels the IRS is not doing enough.</s>SEN. CHUCK GRESSLEY, (R), IOWA: They aren't going to prosecute. And that's not very helpful. It sends a signal that you get a free pass if you're doing identity theft, using IRS instruments.</s>BOUFROU: National taxpayer advocate, Nina Olson, helps taxpayers resolve problems through the</s>IRS. NINA OLSON, TAXPAYER ADVOCATE: We see a lot of activity now. Clearly, folks who are trying to perpetrate a fraud have to get claims in early before the true taxpayer files their return.</s>BOUDREAU: Olson says there is help for the Kings through her office. Brenton King says he just wants his life back, and that stimulus check.</s>KING: The fear is that it will happen for the rest of our lives.</s>BOUDREAU: Abbie Boudreau, CNN, Atlanta.</s>LEMON: An IRS spokesman tells us preventing identity theft is a top priority. and the agency has set up a special unit to crack it down, to crack down on that. But when we asked how many people have been prosecuted, he wasn't able to give us an exact number. The IRS is now sending out letters to taxpayers who may have had their identities stolen. Good luck with that. One way our identity can be stolen is through a bogus e-mail alert that appears to be from the IRS. Pay attention to this. A lot of people are being scammed by it and you don't know. It looks legitimate. Recently, I spoke with a scam buster Christine Durst about how this works. Here's the information that you should hear.</s>CHRISTINE DURST, CEO, STAFFCENTRIX: Right now, people are getting e-mails, Don, that say that we're IRS representatives, we've had a chance to review your tax return and you've made errors. You're eligible for a refund or tax stimulus check. We just need some information from you. If you look at the information they're gathering, the Social Security number, bank account numbers, passports, pin numbers, that type of information could only mean one thing and that is they want in your bank accounts to clean them out.</s>LEMON: Does the IRS send e-mails at all or will they not just send e-mails just requesting personal information? Clarify for us.</s>DURST: They rarely send e-mails. When they do, they will never request personal information. If you do receive an e-mail from the IRS requesting personal information, forward it to phishing@irs.gov. That's phishing with a p-h, because they're going to want to be able to trace it to the originator. It's not from then.</s>LEMON: I found an interesting one here that I actually printed off the page. It's from proofofemployment.com. It's really disturbing. Talk to us about the web site. It goes on and says you can create your own -- I don't know, in my ways, your own tax refund and receipts and basically do what you want.</s>DURST: Exactly. You can print out your own paystubs, W-2s, your own 1099 for $49.95. You can essentially print out anything you want, which means, of course, you can apply for loans you may not be eligible for. You can get loan modifications. You can file tax returns that are bogus. It means an awful lot of terrible things.</s>LEMON: Here's the interesting thing. The way they stay on the internet is they have a disclaimer that says all sales are final, and then it tells you what happens, and that at the end it says, it's not legal, don't do it. But you don't see that when you're online.</s>DURST: There's a lot of white space at the bottom of the page. There doesn't appear to be anything on that page. But if you mouse over, in other words, click and hold your mouse and drag over that white space, you're going to see a bunch of information telling you what not to do. They put white text on a white background intentionally so you don't see it.</s>LEMON: That's really sneaky of them so you really have to be really careful if you get something in the mail like that. Most times, don't even click on it. My conversation with Christine Durst from Staffcentrix. She's going to join us from time to time here to expose the latest scams for you so you don't get ripped off. Information that we think you need to know, especially in these times. People are taking advantage of people whoa re in tough times. Getting back to business -- funeral business in Baghdad. We'll talk to the guy who makes the headstones. He's making more and more, sadly, every day.