So Much For Billionaires: Joe Biden’s IRS Is Now Coming For Waiters And Waitresses’ Tips

ZeroHedge, Feb 10, 2023 – Excerpts:

The Biden administration’s lip service about new IRS enforcement only being targeted toward the country’s wealthiest appears to be just that: lip service.

Instead, while we have been distracted with rhetoric about billionaires paying their fair share, the Biden Administration’s IRS is actually looking to stock its coffers with the tips of waiters and waitresses across the country. This newly planned targeting of middle-class Americans was proposed this week.

Earlier this week the IRS proposed a new procedure to “improve tip reporting compliance”, as they so brilliantly put it. Fox News reported:

As part of the program, which wouldn’t go into effect until after a multi-month public comment period, the IRS could withdraw liability protection related to “rules that define tips as part of an employee’s pay” from employers that don’t cooperate.

The program can’t go into effect until it makes it through a multi-month comment period, Fox News reported. 

Rep. Mike Kelly, R-Pa., the chairman of the Ways and Means Subcommittee on Tax, told Fox this week: “Washington has a spending problem, not a revenue problem. Now, the IRS is going after middle-income families and working moms and dads who are just trying to make ends meet and put food on the table.” 

“My colleagues and I have warned for months that the IRS would start targeting hardworking Americans in the Biden administration’s quest for more taxpayer dollars. Now, we’re starting to see some of these concerns come to fruition,” he continued….

[Rep. Adrian Smith, R-Neb]: “Bank surveillance efforts, 1099-Ks, 87,000 new IRS agents to target taxpayers, and now a new program to go after service industry workers’ tips are all a direct result of the Biden administration’s desire to tax working families and small businesses as much as possible.”

Smith continued: “Make no mistake: the administration’s many attempts at raising revenue are because they are unwilling to come to the table to address the debt crisis, which would require curbing their spending addiction.” 

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While is is admirable that House Republicans have pledged to resist the Biden IRS crusade to tighten the noose on service workers’ tips, Washington Republicans do not have a politically feasible plan to curb Washington’s “spending addiction.”

Washington Republicans, in fact, are fully complicit in our federal government’s ‘spending addiction” – as the Wall Street Journal pointed out recently:

The Back End of an Omnibus – WSJ – Dec 22, 2022 — “Republicans… haven’t shown a whiff of interest in fiscal restraint since the early days of Paul Ryan’s tenure as House speaker. Their majorities broke the bank during the Trump administration, enabling Democrats to point to deficits as reason to resist further tax reform. They held hands with the left to partake in five Covid bailouts in 2020 alone. They joined again to pass Mr. Biden’s infrastructure bill and the semiconductor slush fund. Members of the new, supposedly responsible Republican House majority weeks ago voted to keep the earmark gravy flowing.”

Washington Republicans have a golden opportunity to get on board and support the most powerful economic acceleration plan on the face of the earth – a plan that will obliterate our big government “spending addiction,” generate massive, ongoing budget surpluses, and help lift millions of Americans up out of poverty.

And, I might add, winning over millions of new working class voters.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5785 downloads)

WSJ: Food Stamp Program in Political Crosshairs as Pandemic-Era Changes End

Lawmakers clash over tightening work rules heading into farm bill negotiations

By Kristina Peterson | Feb. 19, 2023 9:00 am ET – Excerpts: 

WASHINGTON—The ending of the Covid-19 public-health emergency means a reset for the country’s food stamps program, which aids more than 41 million Americans, as lawmakers weigh whether to make more far-reaching changes as part of the next farm bill. 

An extra boost in the food assistance for low-income households that Congress authorized at the start of the pandemic will wind down this month, and additional leeway afforded to states around some of the program’s rules will end in May. 

“As that temporary help and flexibility now ends, we will return to a new normal,” Stacy Dean, deputy undersecretary for food and nutrition at the Agriculture Department, told lawmakers last week.

But even as the program returns to its prepandemic operations in some ways, Republicans are sounding alarms over its eligibility guidelines and price tag. 

The nonpartisan Congressional Budget Office estimated this month that the program will cost $1.2 trillion over 10 years. Officially known as the Supplemental Nutrition Assistance Program, or SNAP, food stamps are funded through the farm bill, typically a five-year bill that yokes together support for farmers with the food stamp program. The current farm bill expires in October….

Democrats generally support the existing work requirements, but said they would resist efforts to further restrict access to food stamps.

Passing a new farm bill will require bipartisan support, since Republicans control the House and Democrats hold the Senate and White House. And with a razor-thin majority in the House, Republicans are unlikely to be successful if they attempt to pass a GOP-crafted farm bill just relying on their own votes. Republicans have splintered over the farm bill in the past, stymieing their efforts to demand more stringent work requirements.  

Earlier this month, five House Republicans sent a letter to Mr. Biden pushing for an overhaul to the food stamp program as part of negotiations over raising the federal debt limit.

“All we’re asking is to put SNAP on the table,” and in particular its work requirements, as part of the discussions, Rep. Ralph Norman (R., S.C.), one of the five lawmakers to sign the letter, said in an interview.

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Reducing Fraud in SNAP Needs Attention Too – AEI

Mar 18, 2022 – Excerpt:

Improper payments are not the only problem in SNAP — some retailers and recipients “traffic” their benefits as well. According to the GAO, trafficking is “a practice in which retailers exchange recipients’ benefits for cash instead of food, often taking a fraudulent profit.” A report from September 2021 found that trafficking of SNAP benefits has also increased in recent years. Using a consistent definition of trafficking, the average annual amount trafficked has increased from $241 million in 2002–2005 to $1.2 billion by 2015–2017.

In practice, trafficking happens when a retailer charges an EBT card (a restricted-use debit card carrying SNAP benefits) an amount such as $100, but gives the individual a lesser amount of cash (say, $50) instead. The individual gets unrestricted cash and the retailer charges the federal government for the full $100, making a profit. Sometimes, retailers will also purchase an EBT card from an individual, use it to purchase items from a bulk store, and sell the items in their store for a profit.

Federal law requires the USDA to investigate retailers for trafficking and researchers extrapolate the extent of the problem from their analysis of EBT data. According to the most recent report and using a consistent definition, in 2015–2017, “$1.271 billion in SNAP benefits annually were trafficked and thereby diverted from their intended purpose.” This accounted for between 1.6 and 2 percent of total SNAP benefits in 2015–2017.

Dramatic SNAP expansions throughout the pandemic have prompted an equally significant increase in SNAP purchases at retailers — which jumped by more than $20 billion in FY 2020, according to the USDA. More benefits flowing through retailers will mean more SNAP benefits trafficked.

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Once again, the political ‘cards’ are stacked against them, and Washington Republicans are simply playing out a ‘losing hand.’

Washington Republicans will get ‘tarred and feathered’ on this issue. And rightfully so, since: 1) Not one Washington Republican will lose any meals when their food stamp belt gets tightened; 2) The economy is so royally ‘screwed’ that even members of the U.S. military rely on SNAP benefits to help make ends meet; 3) In the big picture, chiseling away at the Food Stamp program will do nothing meaningful to help bring the massive budget deficits back under control, nor will it do anything to reign in Food Stamp fraud and abuse; and, most importantly, 4) Washington Republicans should have a politically feasible ‘big picture’ plan to help lift Americans up out of poverty and privation, so they won’t need to rely upon government handouts – and they have nothing whatsoever to offer.

It is thoroughly bewildering to watch.

Main Street Republicans do have a dynamic plan, one that will: 1) Raise all boats and lift millions of Americans up out of poverty; 2) Substantially reduce overall dependence on government; 3) Eliminate the need for military personnel to on Food Stamps; 4) Restore citizen-centered health care in America; 5) Generate massive, $619.5 billion. budget surpluses (2024-2028); and 6) Pay for itself entirely over a 10-15 year period.

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 – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5769 downloads)

Credit Suisse: What Exactly Is Going On At The … – Forbes

Oct 12, 2022 – Over the past year, Credit Suisse’s stock value has plummeted, with the company’s market capitalization dropping over 50%. This has happened due to a series of scandals that began in 2021.

Scandal after scandal…

• Greensill Capital: British financial services company focused on supply chain and accounts receivable financing. It originated loans, securitized them and sold them to investors. Credit Suisse had $10 billion invested in the company’s products. In March 2021, Greensill Capital failed, causing Credit Suisse’s clients to lose as much as $3 billion on their investments.
• Archegos Capital: This private company primarily managed the assets of Bill Hwang, an American trader and investor. Credit Suisse provided brokerage services to Archegos Capital, including lending. Archegos Capital reportedly experienced losses of as much as $20 billion in just a few days. A month after the Greensill losses, Credit Suisse lost $4.7 billion due to its involvement with Archegos Capital, and at least seven Credit Suisse executives were removed from their jobs.
• Drug-related money laundering: In February 2022, Credit Suisse was charged with being involved in money laundering by a Bulgarian cocaine trafficking gang. It was the first criminal trial of a major bank to occur in Switzerland. In June, the bank was found guilty, fined 1.7 million euros, and ordered to pay 15 million euros to the Swiss government. Credit Suisse announced plans to appeal.
• Information leaks: In the same month, the details of 30,000 customer accounts holding more than 100 billion Swiss francs in accounts at Credit Suisse were leaked to Süddeutsche Zeitung, a major German newspaper. Included in the leak were accounts held by people involved in human trafficking, drug trafficking and torture. One account was also allegedly associated with the Vatican and fraudulently invested in 350 million euros worth of property in London.
• Ukraine invasion: Following the Russian invasion of Ukraine, Switzerland placed sanctions on Russia. In response, Credit Suisse requested hedge funds and other investors to destroy documents that linked Russian oligarchs to things like loans. This led to probes into the bank’s compliance with sanction requirements.

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More recently…

Credit Suisse Craters After “Staggering” Bank Run And Warning Of Continued Losses

ZeroHedge, Feb 09, 2023 – Excerpts

Back in late 2022, when Credit Suisse stock cratered to never before seen levels after a series of dismal earnings reports and regulatory “missteps” sparked a staggering bank run, amounting to some $88 billion forcing the bank to seek emergency liquidity from the Fed via SNB swap lines, and which also led to a historic corporate restructuring which included the de facto closure of the bank’s investment bank coupled with mass layoffs and bonus cuts, many thought that would be as bad as it gets as the (rapidly changing) management had finally thrown out the kitchen sink….

The second-largest Swiss bank (although it’s probably far smaller now) posted a fifth-straight quarterly loss of 1.39 billion Swiss francs ($1.5 billion), worse than consensus estimates of a 1.14 billion loss as revenue of 3.06 billion Swiss francs also handily missed expectations of 3.35 billion. But while the operating loss was hardly a shock for a bank which has been in a constant state of chaos and turmoil, what stunned analysts was what KBW analysts called a “quite staggering” level of customer capital outflows which hit a record 110.5 billion francs in the quarter, and although the bank said that some money has been coming back, it also concedes it’s now at a worse starting point for 2023.

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Credit Suisse: This is the very same Credit Suisse that the U.S. Federal Reserve so generously infused with massive liquidity injections during the height of the great financial crisis of 2007-2010.

Bloomberg  Nov 28, 2011 – Excerpts:

“Credit Suisse Group AG, Switzerland’s second-biggest bank by assets, was the biggest user of the Fed’s single-tranche open market operations, or ST OMO, borrowing $45 billion in August 2008. Under ST OMO, securities firms swapped eligible mortgage bonds for cash.

The Zurich-based bank’s U.S. brokerage also used the Term Securities Lending Facility, which allowed firms to swap certain debt securities for Treasuries that could be loaned out or sold for cash. Credit Suisse took no part in any central bank’s collateralized funding facilities in the crisis, said Steven Vames, a bank spokesman in New York. TSLF doesn’t count because it involved no cash transfers, he said, and the bank borrowed from ST OMO only as a so-called primary dealer. Primary dealers weren’t required to bid in ST OMO.”

Peak Amount of Debt on 8/27/2008:  $60.8B

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ST OMO’s were a unique form of liquidity infusions that provided “term funding” to the (big bank) Primary Dealers, primarily benefiting major European (Primary Dealer) banks. –  for the purpose of “mitigating heightened stress in funding markets.”

These ST OMO “secretive bailout operation” pumped out $855 billion between “March and December 2008.”

“These operations were conducted by the Federal Reserve Bank of New York with primary dealers as counterparties through an auction process under the standard legal authority for conducting temporary open market operations. In these transactions, primary dealers could deliver any of the types of securities–Treasuries, agency debt, or agency MBS–that are accepted in regular open market operations. By providing term funding to primary dealers, this program helped to address liquidity pressures evident across a number of financing markets and supported the flow of credit to U.S. households and business.”

“Well, not really. As the chart below shows the banks, pardon, primary dealers, that benefited the most from this secret iteration of Fed generosity were once again foreign banks, with the Top 5 borrowers being Credit Suisse, Deutsche Bank, BNP Paribas, RBS and Barclays. Together these five accounted for $593 billion of total borrowings, or 70% of the total.”

Below is a summary of who borrowed how much in total from the Fed’s ST-OMO program.

Source:  https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1113&context=journal-of-financial-crises

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Update:  The U.S. Federal Reserve provided a cool $6.3 billion to ‘rescue’ Credit Suisse via SNB swap lines, as recently as last October.

Instead of continuing to prop up inept and corrupt global banks, it is time for the Fed to re-target their liquidity flows.

U.S. citizens deserve the same access to liquidity and credit guarantees that the Fed pumped out to rescue the banking system during the crisis period (2007 – 2010) when high-risk sub-prime debt took on ‘junk’ status, and fairly well ‘froze’ the system.

Certain Fed operations, like single-tranche open market operations, heavily favored major European banks – designed to mitigate “heightened stress.”

It is now time for the Fed to activate a U.S. Citizens Credit Facility to grant direct liquidity access to U.S. citizens – to eliminate debt and help relieve “heightened stress” at the family level in America.

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 – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5757 downloads)

“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.”

Milton Friedman (1912 – 2006), American economist, Nobel Prize in Economic Sciences 1976

The Leviticus 25 Plan has undergone its annual economic scoring update. For each of the first five years of activation (2024-2028), The Plan will generate a per annum budget surplus of $619.5 billion.

Part 1: Overview, CBO Deficit Forecast 2024-2028

The Leviticus 25 Plan – Each participating U.S. citizen will receive a $60,000 deposit into a Family Account (FA) and a $30,000 deposit into a Medical Savings Account (MSA).

All U.S. citizens are eligible to participate, contingent upon agreement to specified recapture provisions.

These general provisions include:

   – Federal income tax refunds waived for a period of 5 years.

   – Waive Economic Security Program benefits, select means-tested welfare program benefits, and SSI / SSDI benefits for a period of 5 years.

   – Participants enrolled in Medicare, Medicaid, VA Healthcare system, Federal Employees Health Benefits (FEHB), and TRICARE subject to a $6,000 deductible for primary care and outpatient services annually for a period of 5 years.  

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2.  Federal Budget Deficit Projections – Congressional Budget Office

The Budget and Economic Outlook: 2022-2033 projects budget deficits ranging from $984 billion in 2023, up to $1.725 trillion in 2028, and on up to $2.253 trillion by 2032.

Actual deficits for the out years are likely to be higher than CBO projections, based upon history (“actual” versus “projected”).

Congressional Budget Office (CBO) Deficit Projections 2023-2032

CBO deficit projections for target period (2024-2028)

2022:  $1.036 trillion

2023: $984 billion

2024:  $1.056 trillion

2025:  $1.318 trillion

2026:  $1.364 trillion

2027:  $1.409 trillion

2028:  $1.725 trillion

Total deficits projected 2024-2028:  $6.872 trillion 

Source:  CBO 10-Year Budget Projections (2022-2032) https://www.cbo.gov/publication/58147

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Note 1:  Projected budget surpluses for 2024-2028 do not factor in the additional government tax revenue gains that would accrue from the massive shift in capital away from debt service and into productive economic activity.

Note 2:  Projected budget surpluses for 2024-2028 do not factor in the additional government tax revenue gains that would accrue from significantly lower levels of debt deductibility on individual income tax filings. 

Note 3:  Projected budget surpluses from the Medicaid / CHIP recapture do not take into account the likelihood of fewer citizens actually qualifying for Medicaid / CHIP benefits.

Note 4:  The Plan’s funding of individual Medical Savings Accounts (MSAs) with the $6,000 deductible provision per year would result in an enormous drop in the number of claims each year for Medicare reimbursement. Medicare payroll taxes would generate a growing revenue stream, due to stronger economic growth, while outlays would drop significantly from the reduced claims numbers – thereby providing the Fed with a powerful tool to recapitalize the Medicare Trust Fund, vis the Citizen’s Credit Facility.

The Leviticus 25 Plan 2022 will generate $619.5 billion budget surpluses during each of its first five years of activation.

3.  Federal Income Tax Recapture

The scoring model assumes that 80% of U.S. citizens will participate in The Leviticus 25 Plan.

Participants must give up their tax refunds through the Plan’s recapture provisions for the 5-year target period (2024-2028).

According to 2022 IRS Filing season statistics, through Dec 30, 2022: 110,567,000 total refunds were paid out for a total of $359.534 billion. 

Refund totals have increased by ~$44 billion over the past five years, from $303.761 billion (2018) to a current (estimated) $359.534 billion (2022), representing an average increase of $11.152 billion per year. 

A conservative estimated average of $10 billion per year (2024-2028) will be used for this recapture calculation.

2022: $359.5 billion

2023: $369.5 billion

2024: $379.5 billion

2025: $389.5 billion

2026: $399.5 billion

2027: $409.5 billion

2028: $419.5 billion

Total: $1.998 trillion

Total recapture X 80%:  $1.990 trillion X .8 = $1.598 trillion

Total recapture per annum (2024-2028): $1.598 / 5 = $319.6 billion

Source(s): https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-december-30-2022

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4.  Means-tested welfare / Economic Security Programs – Recapture

Participants in the Plan will forego Economic Security Program benefits and select means-tested welfare benefits for the period 2024-2028.

Economic security programs: About 11 percent (or $665 billion) of the federal budget in 2022 supports programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship. Economic security programs include: the refundable portions of the Earned Income Tax Credit and Child Tax Credit, which assist low- and moderate-income working families; programs that provide cash payments to eligible individuals or households, including unemployment insurance and Supplemental Security Income for low-income people who are elderly or disabled; various forms of in-kind assistance for low-income people, including the Supplemental Nutrition Assistance Program (formerly known as food stamps), school meals, low-income housing assistance, child care assistance, and help meeting home energy bills; and other programs such as those that aid abused or neglected children.¹

Source:  https://www.cbpp.org/research/federal-budget/where-do-our-federal-tax-dollars-go

Assuming 2% growth / year

2022:  $665 billion

2023:  $665.0 billion + $13.3 billion = $678.3 billion

2024:  $678.3 billion + $13.566 billion    = $691.866 billion

2025:  $691.866 billion + $13.837 billion = $705.703 billion

2026:  $705.703 billion + $14.114 billion = $719.817 billion

2027:  $719.817 billion + $14.396 billion = $734.213 billion

2028:  $734.213 billion + $14.684 billion = $748.897 billion

Total economic security program outlays 2024-2028 = $3.6 trillion

Assuming 80% participation: $3.6 trillion x .8 = $2.88 trillion

Total:  Economic Security Program / select Means-tested Welfare recapture during the 5-year target period (2024-2028):  $2.88 trillion 

Source(s):  1. https://www.cbpp.org/research/federal-budget/where-do-our-federal-tax-dollars-go

Center for Budget and Policy Priorities (Updated July 2022):  https://www.cbpp.org/research/federal-budget/where0do-our-federal-tax-dollars-go

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The Leviticus 25 Plan – the most powerful economic acceleration plan in the world: economic scoring summary.

10.  Interest expense on projected deficits 2024-2028

Federal debt held by the public increased from $22.1 trillion in 2020 to $31.38 trillion as of Jan 19, 2023. The government also reported approximately $6.9 trillion of intra-governmental debt outstanding, which arises when one part of the government borrows from another.  This intra-governmental debt interest expense will be omitted from this calculation, since those dollars are not expensed directly.

Interest expense on the public debt during FY 2023 is projected to come in at $576 billion on approximately $31.38 trillion in debt, which calculates out as an effective 1.84% interest rate on Debt Held by the Public.

This projection does not take into account the Fed’s 2022 interest rate increases and the consequent  higher interest financing costs for new debt issuance and maturing debt rollover.  This projection also assumes a relatively stable interest rate structure and further assumes that annual federal budget deficits will be funded through Treasury Issuance as a conservative 78.0% Debt Held by the Public.

Year     Annual Deficit/2 

2023:  $964 billion/2 X .78 X .0184 = $6.918 billion

2024:  $1.056 trillion/2 X .78 X .0184 = $7.578 billion

2025:  $1.318 trillion/2 X .78 X .0184 = $9.458 billion

2026:  $1.364 trillion/2 X .78 X .0184 = $9.788 billion

2027:  $1.409 trillion/2 X .78 X .0184 = $10.110 billion

2028:  $1.725 trillion/2 X .78 X .0184 = $12.378 billion

Recapture: Total interest expense eliminated by projected operating surpluses: $49.312 billion

Source(s): Dec 2022 Average Interest Rate on U.S. Treasury Securities 1.89% https://fiscaldata.treasury.gov/

National Debt, as of Jan 19, 2023 – $31.38 trillion.  In the first quarter of this 2023 fiscal year, “gross interest on the national debt hit $210 billion—or $144 billion in net interest, excluding interest on Treasury securities held in government trust accounts. That’s $840 billion gross and $576 billion net on an annualized basis, up dramatically from $580 billion gross and $383 billion net in the 12 months before the economic shutdown in March 2020. This escalation doesn’t even reflect the full-year impact of the Fed’s 2022 interest-rate increases. Effective interest rate:  1.836% net; 2.677% gross.

Source: https://fred.stlouisfed.org/series/FYGFDPUN  |  Debt held by the public: 78%

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The Leviticus 25 Plan budget surplus (2024-2028) – Summary:

5-year projected deficit: $6.872 trillion

5-year projected recapture (subtotal):  $9.920 trillion

5-year projected interest expense savings: $49.312 billion

Budget surplus (projected) 2024-2028:

$9.920 trillion – $6.872 trillion = $3.048 trillion

Budget surplus (projected) 2024-2028 with interest expense savings:

$3.048 trillion + $49.312 billion:  $3.097 trillion

Average annual budget surplus (projected) 2024-2028:

$3.097 trillion / 5 years: $619.5 billion per year

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Note 1:  Projected budget surpluses for 2024-2028 do not factor in the additional government tax revenue gains that would accrue from the massive shift in capital away from debt service and into productive economic activity.

Note 2:  Projected budget surpluses for 2024-2028 do not factor in the additional government tax revenue gains that would accrue from significantly lower levels of debt deductibility on individual income tax filings. 

Note 3:  Projected budget surpluses from the Medicaid / CHIP recapture do not take into account the likelihood of fewer citizens actually qualifying for Medicaid / CHIP benefits.

Note 4:  The Plan’s funding of individual Medical Savings Accounts (MSAs) with the $6,000 deductible provision per year would result in an enormous drop in the number of claims each year for Medicare reimbursement. Medicare payroll taxes would generate a growing revenue stream, due to stronger economic growth, while outlays would drop significantly from the reduced claims numbers – thereby providing the Fed with a powerful tool to recapitalize the Medicare Trust Fund, vis the Citizen’s Credit Facility.

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A look back…

2008: Secret Fed Loans – Largest Bailout in U.S. History                                             Nov. 28 (Bloomberg) — Bloomberg Markets magazine’s January issue examines how the Federal Reserve and big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. And how bankers failed to mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. (Source: Bloomberg)

Nov. 28 (Bloomberg) — The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. No one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.  Betty Liu reports on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

Kenneth D. Lewis Former CEO of Bank of America Corp.                                            On Nov. 26, 2008, then-Bank of America Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his firm owed the central bank $86 billion that day. Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.

The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort — and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.

$7.77 Trillion – The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.”  It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP.  Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”

Bloomberg.com:  http://164.67.163.139/Documents/areas/adm/loeb/12_177.pdf

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It is time to take action and get America back on track for economic growth and economic liberty.

It is now time for the Federal Reserve re-target liquidity flows – to grant U.S. citizens the same access to liquidity that was provided to global financial markets during the last Great Financial Crisis.

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 – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5748 downloads)

‘Huge, Missing and Growing:’ $65 Trillion in Dollar Debt Sparks Concern

Greg Ritchie – Bloomberg | Mon, December 5, 2022

(Bloomberg) — Institutions outside the US are holding an estimated $65 trillion in “missing” dollar debt off their balance sheets through currency derivatives, making it harder for global policymakers to anticipate the next financial crisis.

According to a paper from the Bank for International Settlements, this very short-term hidden borrowing forms part of a “huge, missing and growing” debt that the likes of pension funds owe through foreign-exchange swaps and other derivatives transactions.

This is a problem, the BIS noted, because FX swaps were flash-points during both the global financial crisis and the early days of the pandemic, when dollar funding stress forced central banks to step in to help struggling borrowers.

“It is not even clear how many analysts are aware of the existence of the large off-balance sheet obligations,” said researchers Claudio Borio, Robert McCauley and Patrick McGuire, noting that the lack of information into this form of dollar borrowing puts policymakers on the back foot.

“Thus in times of crises, policies to restore the smooth flow of short-term dollars in the financial system — for instance, central bank swap lines — are set in a fog,” the report said.

The $65 Trillion Hidden Global Debt Bomb: Paul J. Davies

The findings, based on data from a triennial survey of global currency markets earlier this year, offer a rare insight into the scale of hidden leverage. The total amount of dollar debt from the derivatives stands at more than $80 trillion, exceeding the combined value of dollar Treasury bills, repurchase agreements and commercial paper, BIS said.

Banks headquartered outside the US carry $39 trillion of this debt — more than double their on-balance sheet obligations and ten times their capital, the paper said.

In an FX swap, a Dutch pension fund might borrow dollars and lend euros, and then later repays the dollars and receive euros. This is conceptually similar to a repo agreement except currencies are exchanged instead of collateral such as bonds, the BIS paper noted. Much of the dollar debt is very short-term and can create dollar funding squeezes, the researchers said.

Separately, another BIS paper found an estimated $2.2 trillion of daily FX turnover was subject to settlement risk. That refers to the possibility that one party to a trade fails to deliver the currency owed, which can “result in significant losses for market participants, sometimes with systemic consequences.”

This infamously happened when Germany’s Bankhaus Herstatt failed in 1974 leading regulators to set up the Basel Committee. The risk remains because payment-versus-payment arrangements — where transfers are co-ordinated so that neither party in a trade is left holding a claim after it has discharged its obligations — are unavailable, unsuitable or too expensive for certain trades, the BIS paper said.

“There is a staggering volume of off-balance sheet dollar debt that is partly hidden, and FX risk settlement remains stubbornly high,” said Borio, head of the monetary and economic department at the BIS.

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Again… “Banks headquartered outside the US carry $39 trillion of this debt — more than double their on-balance sheet obligations and ten times their capital…”

A look back to the 2008-2010 Great Financial Crisis (Investopedia):

“The 2008 financial crisis was primarily caused by derivatives in the mortgage market. The issues with derivatives arise when investors hold too many, being overleveraged, and are not able to meet margin calls if the value of the derivative moves against them.”

“A number of banks went under, others had to be bailed out by governments and still others were forced into mergers with stronger partners. The common stocks of banks got crushed, their preferred stocks were also crushed, dividends were slashed and lots of investors lost part or all of their money.”

As the Fed bailed out the Wall Street financial sector through various credit facilities, graciously preserving the financial health and creature comforts of the principals managing and directing those too-big-to-fail financial institutions, the over 6 million Americans lost their homes through foreclosure. Over 9 millions Americans lost their jobs.

It is now time for preemptive action to prevent another catastrophic fall-out that would again be certain to hit millions of hard-working, tax-paying U.S. citizens.

It is time to grant U.S. citizens the same direct access to liquidity extensions that were provided to the likes of Morgan Stanley, Citigroup, Bank of America, JP Morgan, Goldman Sachs, Wells Fargo, Deutsche Bank, UBS, Royal Bank of Scotland, Barclays and scores of other major financial institutions.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5744 downloads)

Certainly one of the primary reasons the Fed has been in full scale ‘rate-hike mode’ in recent months has been to jack rates up to a high enough, attractive enough level, to create strong demand for government debt at the monthly Treasury auctions.

The Fed has stopped buying Treasuries (through back door Primary Dealer channels) and is now actually selling Treasuries from their portfolio – to shrink their balance sheet (announced months ago with their QT initiative). So, somebody (indirect bidders) would be needed to pick up the slack and ‘buy government paper.’

Robust private sector demand would therein be critical for allowing Treasury auctions to proceed in an orderly fashion, ‘allowing’ big government, specifically the Executive branch and its various agencies and the U.S. Congress, to continue happily digging America ever deeper into debt.

So far, so good:

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A stellar 3Y auction on Tuesday, a record-breaking 5Y auction yesterday and moments ago: a blowout 7Y auction completes a sequence of three monster auctions which have seen an absolute flood of demand mostly by foreign buyers.  JAN 26, 2023

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The looming problem: higher net interest costs are now getting ‘baked in’ to our ever-ballooning federal budget deficits, which will inevitably lead into a period of U.S. Dollar instability, chaos in the foreign exchange markets and complete disorder in the credit markets.

There is a solution, a powerhouse economic initiative, to solve America’s debt crisis and keep America’s financial affairs in good order. Re-targeting liquidity flows key to a dynamic resolution of this crisis.

It is now time to grant U.S. citizens with the same direct access to liquidity extensions that was so generously extended, through various credit facilities, to scores of ‘too big to fail’ financial institutions during the great financial crisis of 2007-2010, including the likes of: Morgan Stanley, JP Morgan, Goldman Sachs, Citigroup, Bank of America, Wells Fargo, State Street, Deutsche Bank, RBS, Barclays, UBS AG, BNP Paribas, and multiple others…

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5689 downloads)