Milton Friedman on ‘forced equality’ vs true freedom

Milton Friedman, Nobel Prize winning economist:

“A society that puts equality — in the sense of equality of outcome — ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.

On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality. Though a by-product of freedom, greater equality is not an accident.  A free society releases the energies and abilities of people to pursue their own objectives.

It prevents some people from arbitrarily suppressing others.  It does not prevent some people from achieving position of privilege, but so long as freedom is maintained, it prevents those positions of privilege from becoming institutionalized; they are subject to continued attack from other able, ambitious people.  Freedom means diversity but also mobility.  It preserves the opportunity for today’s disadvantaged to become tomorrow’s privileged and, in the process, enables almost everyone, from top to bottom, to enjoy a fuller and richer life.”

Friedman also wrote:                                                                                                    “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
“They think that the cure to big government is to have bigger government… the only effective cure is to reduce the scope of government – get government out of the business.”

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And this is what The Leviticus 25 Plan is all about.

 

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BNP Paribas – #18 recipient of Fed’s “secret liquidity lifelines.”

BNP Paribas was recently ranked the 4th largest bank in the world (2012).  The French bank is headquartered in Paris, with global headquarters in London.  It owns subsidiaries all over the world, including BankWest in the U.S..

“BNP Paribas escaped the 2007–09 credit crisis relatively unscathed reporting a €3 billion net profit for the year of 2008, and €5.8 billion for 2009.” (Source: Wikipedia)

Thanks in no small part to U.S. taxpayers…

Background – Exhibit A:                                                                                                             Zero Hedge  Feb 13, 2014:  US Taxpayer “Bailed Out” BNP Paribas Probed By DoJ & Fed

“TARP Recipient BNP Paribas got $4.9bn of bailouts from the U.S. Taxpayer – Today, as the WSJ reports we learn BNP Paribas has been funding transactions in Iran, Syria and other countries subject to U.S. Sanctions since 2002. The bank set aside $1.1 billion to settle investigations by the Department of Justice and the Federal Reserve but as the NY Times reports, investigations are playing out on multiple fronts – centering on whether the firm did “a significant amount” of business in “blacklisted” countires (and routed the deals through the US financial system).”

Via WSJ,  –  “…an internal probe conducted over the past few years “a significant volume of transactions” between 2002 and 2009 that could be “considered impermissible under U.S. laws and regulations...” “involving entities that were doing business in U.S.-sanctioned countries, such as Iran, Cuba, Sudan and Libya during the 2002 to 2009 period.

BNP Paribas SA on Thursday became the latest bank to disclose the extent of its litigation problems in the U.S., saying it has set aside $1.1 billion against potential penalties related to transactions in countries under sanctions...

…………………………………                                                                                       Background – Exhibit B:                                                                                                             BNP Paribas Sued by US Over Banker’s Alleged Role in Fraud 

Oct. 19, 2011 (Bloomberg) — “BNP Paribas SA was sued by the U.S. over allegations the Paris-based bank aided a grain export fraud scheme involving commodity payment guarantees provided by the Department of Agriculture.

A corporate banker in BNP’s Houston office allegedly helped a scheme that defrauded the Agriculture Department of at least $78 million through deals he made with four U.S. grain exporters, according to a complaint filed yesterday in federal court in Houston.”

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Bloomberg  Nov 28, 2011  –  #18 recipient of Fed’s “secret liquidity lifelines”

The credit crisis accelerated after BNP Paribas SA, France’s biggest bank, announced in August 2007 that it would halt withdrawals from three funds because mortgage-market turmoil “made it impossible” to value certain assets. BNP began taking Federal Reserve loans in December 2007 when the Term Auction Facility opened.

By April 2008, its Fed debt reached $29.3 billion. In 2009, BNP became the euro region’s largest bank by deposits, purchasing Brussels-based Fortis’s units in Belgium and Luxembourg for 10.4 billion euros ($15.2 billion). It issued 5.1 billion euros of preference shares to the French government in March 2009, and reimbursed the state by October. In December 2010, when the Fed disclosed the loans, BNP said it used the TAF “to assist in recycling and facilitating liquidity.”

Peak Amount of Debt on 4/18/2008:  $29.3B

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BNP Paribas received $4.9 billion in TARP funds from the U.S…. They also raked in a tidy $29.3 billion credit extension from the Fed via the Term Auction Facility… “to assist in recycling and facilitating liquidity.”

They were meanwhile funding significant transactions (Bloomberg) “involving entities that were doing business in U.S.-sanctioned countries, such as Iran, Cuba, Sudan and Libya during the 2002 to 2009 period.”  And they ran a “grain export fraud scheme” which ‘cooked’ the U.S. Department of Agriculture for a cool $78 million.

The $64,000 question:                                                                                                                     If BNP Paribas is deserving of direct cash infusions from the U.S. government and the Fed, then certainly U.S. citizens should qualify for direct credit extensions “to assist in recycling and facilitating liquidity” at the family level.

The Leviticus 25 Plan provides for a “Citizens Credit Facility” to channel the credit extensions – and a full repayment mechanism.

Participating U.S. citizens will repay… just like BNP Paribas repayed.

The Leviticus 25 Plan – An Economic Acceleration Plan for America 2014 (322)         $64,000 per U.S. citizen.

U.S. Government “High-Error Programs” vs The Leviticus 25 Plan

Government allocation of resources is a recipe for waste, fraud, inefficiency, price distortions…. and “improper payments.”

The U.S. Government Office of Management and Budget (OMB) “High-Error Programs Report” revealed improper welfare-related payments of $100 billion for the year 2012.

These improper payments go on year after year.  The tally for a 10-year period would reach the $1 trillion mark.

“OMB has designated 13 programs as “high-error”. The criteria for determining when a program is high-error are found in OMB guidance . The high-error programs are those programs that reported roughly $750 million or more in improper payments in a given year, did not report an error amount in the current reporting year but previously reported an error amount over the threshold, or have not yet established a program error rate and have measured components that were above the threshold.”

Select a program from the list below to view program details:

Program

Agency

Total Payments (outlays)

Improper Payment Amounts

Improper Payment Rates

Medicare Fee-for-Service

Department of Health and Human Services

$357.4B

$36.0B

10.1%

Earned Income Tax Credit (EITC)

Department of the Treasury

$60.3B

$14.5B

24.0%

Medicaid

Department of Health and Human Services

$246.9B

$14.4B

5.8%

Medicare Advantage (Part C)

Department of Health and Human Services

$123.7B

$11.8B

9.5%

Unemployment Insurance (UI)

Department of Labor

$66.8B

$6.2B

9.3%

Supplemental Security Income (SSI)

Social Security Administration

$53.4B

$4.3B

8.1%

Supplemental Nutrition Assistance Program (SNAP)

Department of Agriculture

$74.6B

$2.6B

3.4%

Retirement, Survivors, and Disability Insurance (RSDI)

Social Security Administration

$770.3B

$2.4B

0.3%

Medicare Prescription Drug Benefit (Part D)

Department of Health and Human Services

$57.1B

$2.1B

3.7%

National School Lunch Program (NSLP)

Department of Agriculture

$11.3B

$1.8B

15.7%

Rental Housing Assistance Programs

Department of Housing and Urban Development

$30.9B

$1.3B

4.3%

Pell Grants

Department of Education

$32.3B

$0.7B

2.3%

Children’s Health Insurance Program (CHIP)

Department of Health and Human Services

$9.1B

$0.6B

7.1%

NR: No data has been reported for the current period

Note: All amounts are in billions of dollars

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Nobel economist Fredrick A. von Hayek steadfastly opposed central planning and the government allocation of resources.  This approach to government restricts economic liberty among citizens, distorts markets, and, over time, leads to a severe erosion of most basic freedoms.  The freedom of speech is one prime casualty, as Hayek explained in a chapter entitled, “The End of Truth,” in his classic book, The Road to Serfdom.

The Leviticus 25 Plan places the allocation of resources back in the hands of citizens.   It restores economic liberty in America.                                                                                  It employes a powerful debt-reducing dynamic for working families.                                 And it provides the poor with a helping ‘hand-up,’ instead of meager monthly ‘hand-outs.’

The Leviticus 25 Plan pays for itself over a 10-15 year period.                                        No other plan in the world can match any of these benefits – for so many.

 

 

Bear Stearns – #17 recipient of Fed’s “secret liquidity lifelines”

Background – Bear Stearns:

The Atlantic – Jan 25, 2011:                                                                                        Emails Suggest that Bear Stearns Cheated Clients out of Billions  

“Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear.

Last week a lawsuit filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JPMorgan was unsealed. The lawsuit’s supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a “sack of [sh#%].”

[snip]

According to the lawsuit, the Bear traders would sell toxic mortgage securities to investors and then sell back the bad loans with early payment defaults to the banks that originated them at a discount. The traders would pocket the refund, and would not pass it on to the mortgage trust, which was where it should have gone to be distributed to the investors who owned the bonds.

It’s this blatant internal awareness inside the Bear mortgage trading division that the Ambac suits says led Bear to implement an across-the-board strategy to disregard its contractual promises and conceal the defective loans….

In 2007, when Ambac started to realize something was very wrong with its high-rated bonds, it demanded Bear provide loan-level detail and reviewed 695 non-performing loans in its portfolio. Ambac’s audit concluded that 80 percent of the loans showed an early payment default….

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 Bloomberg  Nov 28, 2011:                                                                                                Bear Stearns Cos. Chairman James “Jimmy” Cayne told the Financial Crisis Inquiry Commission that the Federal Reserve’s Primary Dealer Credit Facility, set up in March 2008 to supply emergency funding to brokerage firms, came “just about 45 minutes” too late. Without access to liquidity from the central bank, New York-based Bear Stearns had to sell itself to JPMorgan Chase & Co., ending 85 years as an independent firm. To prop up Bear Stearns while the deal could be negotiated, the Fed extended a $12.9 billion emergency loan to the firm through JPMorgan. After the deal was inked, the Fed supplied as much as $30 billion to Bear Stearns through the PDCF and single-tranche open market operations to float the firm while the takeover was pending.

Peak Amount of Debt on 3/28/2008:  $30B

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U.S. citizens, who did not lie and defraud and sell toxic securities to anyone – deserve nothing less than the same access to liquidity that major banks and financials received from the Federal Reserve during 2007 – 2010.

The mechanism for this access – a Citizens Credit Facility as outlined in                         The Leviticus 25 Plan.

9/10 top occupations in America “pay an average of less than $35,000 a year”

Michael Snyder – The Economic Collapse blog:  9 of the Top 10 Occupations in America Pay an Average of Less than $35,000 a Year  –  Excerpts: 

“According to stunning new numbers just released by the federal government… nine of the top ten most commonly held jobs in the United States pay an average wage of less than $35,000 a year.  When you break that down, that means that most of these workers are making less than $3,000 a month before taxes.

And once you consider how we are being taxed into oblivion, things become even more frightening.  Can you pay a mortgage and support a family on just a couple grand a month?  Of course not.

[snip]

In 2014, both parents are expected to work, and in many cases both of them have to get multiple jobs just in order to break even at the end of the month.  The decline in the quality of our jobs is a huge reason for the implosion of the middle class in this country.  You can’t have a middle class without middle class jobs, and we have witnessed a multi-decade decline in middle class jobs in the United States.  As long as this trend continues, the middle class is going to continue to shrink.

The following is a list of the most commonly held jobs in America according to the federal government.  As you can see, 9 of the top 10 most commonly held occupations pay an average wage of less than $35,000 a year

  1. Retail salespersons, 4.48 million workers earning  $25,370
  2. Cashiers  3.34 million workers earning $20,420
  3. Food prep and serving staff, 3.02 million workers earning $18,880
  4. General office clerk, 2.83 million working earning $29,990
  5. Registered nurses, 2.66 million workers earning $68,910
  6. Waiters and waitresses, 2.40 million workers earning $20,880
  7. Customer service representatives, 2.39 million workers earning $33,370
  8. Laborers, and freight and material movers, 2.28 million workers earning $26,690
  9. Secretaries and admins (not legal or medical),  2.16 million workers earning $34,000
  10. Janitors and cleaners (not maids),  2.10 million workers earning, $25,140

Overall, an astounding 59 percent of all American workers bring home less than $35,000 a year in wages.                                                                   ………………………………………

There is one economic plan that will “raise all boats” and deliver dynamic benefits for all working Americans.

The Leviticus 25 Plan 2014 – The $64,000 Solution                                              December 2013 – Updated versionThe Leviticus 25 Plan – An Economic Acceleration Plan for America 2014 (334)

Wells Fargo – #16 recipient of Fed’s “secret liquidity lifelines”

Bloomberg  Nov 28, 2011 Excerpts:

“Wells Fargo & Co. became the largest U.S. home lender and fourth-biggest bank after purchasing Wachovia Corp. in 2008 as that bank was teetering near collapse. Wells Fargo, based in San Francisco, borrowed as much as $45 billion in February 2009, a day after regulators released details of how they would conduct stress tests on the nation’s 19 largest banks.

The Fed’s Term Auction Facility was “one of several programs offered by the government that Wells Fargo and other financial institutions were encouraged or required to participate in,” said Ancel Martinez, a spokesman for the bank.”

Peak amount of debt on 2/26/2009:  $45B                                             ……………………………..

U.S. citizens deserve the same access to liquidity that the Fed provided to major banks during the height of the financial crisis.

The Leviticus 25 Plan

Fed admission: Policies benefit the rich

DrudgeReport 04/09/2014: Fed Admits Policies Benefit Rich, Fears For “Nation’s Democratic Heritage”

                                                                                                                             Fed Governor Daniel Tarullo recently acknowledged that Fed policies have led to a negative distortion in the share of national income earned by working class. 

These “changes reflect serious challenges not only to the functioning of the American economy over the coming decades, but also to some of the ideals that undergird the nation’s democratic heritage,” according to Tarullo.

Tarullo admits that the Fed-policy-driven recovery has “benefited high-earners disproportionately.”                                                              ………………………………… 

The fix:                                                                                                                                The Leviticus 25 Plan – the only plan anywhere offering dynamic benefits for working Americans.

U.S. taxpayer dollars – ‘to Russia with love’…..

“Ukraine reached a preliminary deal with the International Monetary Fund to unlock $27 billion in international aid as U.S. lawmakers passed bills imposing more sanctions on Russians linked to Crimea’s annexation.”  Source:  Bloomberg, Mar 27, 2014

$18 billion of that aid package is being anted up by the International Monetary Fund.

Note 1:  The U.S. finances 17.7% of the IMF budget, so U.S. taxpayers are kicking in a cool $3.2 billion in the deal – to ‘bail out’ Ukraine.

It was also announced (NY Times, March 27, 2014):  Congress Approves $1 Billion of Aid for Ukraine                                                                                                          WASHINGTON — The House and the Senate voted overwhelmingly on Thursday to approve a $1 billion aid package for Ukraine….

Total from the U.S. – about $4.2 billion

Note 2:  A significant $2.2 billion from these bailout packages will actually go to pay off some Ukrainian debt to……. Russian natural gas giant, Gazprom.                           Gazprom has been playing some ‘hard-ball’ lately when it nearly “doubled the gas price for Ukraine to $485 per 1,000 cubic metres, compared to the $370-$380 it charges Europe on average. Ukraine says the new price is unacceptable and is politically motivated.”  Source:  Ukraine fails to pay for gas on time, debt stands at $2.2-billion: Russia’s Gazprom

U.S. taxpayers to the rescue.  Money to Ukraine.Money to Russia.

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And this raises the question:  How is it that our government will authorize billions of dollars in bailouts to Ukraine to help relieve their Russian debt, while at the same time our government will not consider credit extensions to our own U.S. citizens, providing equally important debt relief for American families?

Wake up, America.

The Leviticus 25 Plan – the equal opportunity plan for American families.

Lehman Brothers Holdings – #15 recipient of Fed’s “secret liquidity lifelines”

In 2007 and 2008, Lehman Brothers Holdings Inc engaged in some old-fashioned, end-of-quarter creative ‘book-cooking” to disguise their quietly snowballing insolvency issues….

Their financial sleight-of-hand involved book-keeping entries as “Repo 105s” – where late-quarter  temporary loans backed by ‘depressed’ assets were booked as ‘sales,’ with the revenues then ‘used’ to pay down debt.  This provided “window dressing” for their quarterly reports to, naturally, make ‘management’ look good.  Lehman would then ‘buy’ the asset back and add the old debt back in early in the new quarter.

Lehman ran up $50 billion worth of ‘Repo 105s’ in 2008.  Auditor Ernst & Young ‘winked’ at the Lehman ‘shell game.’                                                                       ……………………….

The financial crisis blew thing up in the fall of 2008.

Bloomberg  Nov 28, 2011Excerpts:                                                                        “Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15, 2008, after U.S. Treasury Secretary Henry Paulson refused to authorize a government bailout for the New York-based securities firm. By then, the Fed had supplied liquidity to Lehman’s main brokerage unit, Lehman Brothers Inc., for months, reaching $31.1 billion in June 2008.

On the day of the bankruptcy, Lehman’s Fed loans reached $44.8 billion. Barclays Plc took over some of the debt after buying Lehman’s North American securities business, according to court testimony. Lehman Brothers Inc. repaid $38.5 billion on Sept. 18, and Barclays’s Fed borrowings jumped by $49.1 billion to $63.8 billion that day, the data show.”

Peak amount of Debt on 9/15/2008:  $46B                                                  _____________________

In review – ‘book-cooker’ Lehman Brothers receives massive liquidity infusions from the Fed… and Barclays receives massive Fed-generated liquidity access to buy ‘book-cooker’ Lehman.

But U.S. citizens, who did not ‘cook books,’ and whose money was used to transfuse Lehman and Barclays, are not allowed access to liquidity…?                                             Are you kidding me…….?

It’s time to level the playing field.                                                                                        The Leviticus 25 Plan.

Private debt crisis… could lead to next economic collapse

If you thought America’s government debt ($17.5 trillion) was a drag on the economic growth, consider America’s private debt…. crisis.

The Daily Ticker, March 28, 2014 excerpts:

“As of March 2014, American consumers owe $11.52 trillion in debt, an increase of 1.6% from last year. The average household owes $7,115 on their credit cards and the average indebted household owes $15,252.

Americans owe $8.05 trillion in mortgages (the average mortgage debt being $152,209) and $1.08 trillion in student loan debt.

When combined with corporate debts the U.S. collectively owes about $28 trillion in private debt.

 “Every major crisis of our lifetime has been caused by a rapid increase of our private debt,” says Richard Vague, chair of the Governor’s Woods Foundation. “They all were a function of runaway private lending.”

People focus too much on government debt, argues Vague, when they should be attempting to quell private debt.

“There’s reputed to be 10 million mortgages that are still underwater,” he says. “There’s perhaps a half or ¾ of a trillion in second-lean loans that are still a problem and haven’t been dealt with. Those to us are logical candidates for restructuring programs.”

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Vague goes on to recommend “restructuring” private loans, spreading them out over 30 years… to “clean things up.”

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Vague did not explain why it was acceptable for major banks and money centers (domestic and foreign), submerged by their own self-induced liquidity emergencies, to receive trillions of dollars in credit extensions and cash transfusions from various Fed-created credit facilities ….. but U.S. citizens should not be provided with the same access to liquidity.

Vague’s plan is a timid approach that deserves to be categorically dismissed.

America needs a bold, fresh, dynamic plan to eliminate debt at the family level – not “spread it out over 30 years.”

America needs The Leviticus 25 Plan.

The Leviticus 25 Plan 2014 – The $64,000 Solution                                              December 2013 – Updated version:                                                                                  The Leviticus 25 Plan – An Economic Acceleration Plan for America 2014 (318)