Anemic U.S. economic growth – with potential for a recession-driven ‘blow out’ in the federal budget..

America is at a critical fiscal juncture.

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These 2 Charts Show the Next Recession Will Blow Out the US Budget

March 30, 2016  /   BY JOHN MAULDIN – Maudlin Economics                            Excerpts:

The weakest recovery in modern history has stretched on for 69 months.

By 2017, it will be the third-longest recovery without a recession since the Great Depression. By 2018, it will be the second longest.

[snip]

The US’ fiscal reality

Next year, the US national debt will top $20 trillion. The deficit is running close to $500 billion, and the Congressional Budget Office projects that figure to rise.

Add another $3 trillion or so in state and local debt. As you may imagine, the interest on that debt is beginning to add up, even at the extraordinarily low rates we have today.

Sometime in 2019, entitlement spending, defense, and interest will consume all the tax revenues collected by the US government. That means all spending for everything else will have to be borrowed.

The CBO projects the deficit will rise to over $1 trillion by 2023. By that point, entitlement spending and net interest will be consuming almost all tax revenues, and we will be borrowing to pay for our defense.

Let’s look at the following chart, which comes from CBO data:

These_2_Charts_Show_the_Next_Recession_Will_Blow_Out_the_US_Budget

What a budget might look like if we have a recession

[snip]

Here’s a chart of what a recession in 2018 would do:

These_2_Charts_Show_the_Next_Recession_Will_Blow_Out_the_US_Budget

Entitlement spending and interest would greatly exceed revenue.

The deficit would balloon to $1.3 trillion. And if the recovery occurs along the lines of our last (ongoing) recovery, we will not see deficits below $1 trillion over the following 10 years—unless we reduce spending or raise revenues.

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We need to get America moving again – now.

We need to unleash the power of a free-market, citizen-directed economy, with massive debt elimination at ground level.

We need decentralization – and economic liberty.

And we need to get moving, and we need the right plan to make it happen.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                              The Leviticus 25 Plan 2017 (1415)

 

Bank of America – #3 recipient of Fed’s ‘secret liquidity lifelines’

Bank of America –  At the height of the financial crisis, Bank of America found itself with a gaping $50 billion capital hole in its balance sheet. The U.S. Treasury Department forwarded a $45 billion TARP loan (‘the people’s money’) to Bank of America, and the U.S. Federal Reserve stepped up to the plate and kindly dished out billions of dollars (the ‘people’s money’) to keep the big dog afloat.

To recap (Source: Bloomberg Nov 28, 2011 ):                                                                Morgan Stanley was the #1 recipient of Fed secret loans at $107 billion (peak loan amount – 9/29/2008).                                                                                                 Citigroup was the #2 recipient of the Fed’s secret lifelines $99.5 billion (peak loan amount – 1/20/2009).                                                                                                        Bank of America was the #3 recipient with $91.4 billion (peak loan amount –  2/26/2009).

Bloomberg November 2011:  “Bank of America Corp., which got two rounds of U.S. Treasury Department capital injections totaling $45 billion to stay afloat during the credit crisis, borrowed twice that amount in secret from the Federal Reserve. On Feb. 26, 2009, the Charlotte, North Carolina-based bank held $78 billion of loans from the Fed’s Term Auction Facility, $8.65 billion from the Primary Dealer Credit Facility, $4.75 billion from the Term Securities Lending Facility. The financing helped bolster the largest U.S. bank by assets as investors worried its 2008 acquisitions of Merrill Lynch & Co. and Countrywide Financial Corp. might lead to nationalization.”

One final question:

Is there economic or moral legitimacy in the Federal Reserve juicing Wall Street’s financial sector with hundreds of billions of dollars in direct liquidity infusions (at taxpayer expense) to rescue them from their bizarre, greed-driven, dead-end investment failures and hollowed-out derivative hedging strategies….

..but it is not acceptable for U.S. citizens to be granted the same direct access to liquidity?

Correct.  There is no economic or moral legitimacy in that arrangement.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1406)

 

 

 

 

 

 

 

Gross: World needs growth now, or “markets and the capitalistic business models based upon them and priced for them will begin to go south”

Central Bank policies have done little, if anything, to scale back public/private debt levels in their respective countries. They have done nothing to advance the cause of ground-level, free market economics with the attendant benefits of gross efficiency and productivity gains and positive economic growth.

The world is starved for liquidity.  The world needs economic growth rejuvenation.

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Global economics analysisBill Gross:

The reality is this. Central bank polices consisting of QE’s and negative/artificially low interest rates must successfully reflate global economies or else. They are running out of time. To me, in the U.S. for instance, that means nominal GDP growth rates of 4–5% by 2017 – or else. They are now at 3.0%. In Euroland 2–3% – or else. In Japan 1–2% – or else. In China 5–6% – or else. Or else what? Or else markets and the capitalistic business models based upon them and priced for them will begin to go south.

Capital gains and the expectations for future gains will become Giant Pandas – very rare and sort of inefficient at reproduction. I’m not saying this will happen. I’m saying that developed and emerging economies are flying at stall speed, and they’ve got to bump up nominal GDP growth rates or else.

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The Leviticus 25 Plan will decentralize global economics and unleash the power of debt elimination and free market dynamics.

There is no other comprehensive economic acceleration plan – anywhere.

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“He who will not apply new remedies must expect new evils.” – Sir Francis Bacon

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1405)

 

Does America need more government-directed economic solutions..?

That distort free-market economics… destroy jobs… and provide no fundamental, long-term benefits to citizens…

Like this one…?

ZeroHedge 04/01/2016:                                                                                                      New York Follows California, Will Raise Minimum Wage To $15/Hour

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 Or does American need citizen-directed economic solutions

That deliver real, debt-eliminating benefits, direct to U.S. citizens…

Re-ignite economic growth…

Reduce government control over the daily affairs of citizens…

And generate massive government budget surpluses…

Like this one..?

 The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                 The Leviticus 25 Plan 2017 (1403)