America wins:
The Leviticus 25 Plan will rebuild America’s economic foundation. It will return control and responsibility for allocating financial resources back to individual American citizens, rather than allowing government to allocate resources.
Government allocation of resources inevitably leads to loss of freedom (F.A. Hayek). It replaces individual economic choice with government dictate. It is inefficient, it distorts cost structures, and it creates artificial imbalances in the free market system.
The Leviticus 25 Plan will substantially decrease, and in many cases eliminate, house-hold debt levels in America. It will generate meaningful gains in Real Median Household Income. It will provide financial security for American families and restore economic liberty. And it will free millions of Americans from big-government oppression and control over their daily lives.
The Plan will make it possible for Americans at all levels to avoid home loan foreclosures, provide for their family’s daily needs, and start small business enterprises on their own – without government involvement.
Small business will not need to depend upon government-directed stimulus programs and tax incentives. They will instead benefit from financially secure customers walking in their doors.
State governments will benefit enormously from decreased costs for on-going social programs (unemployment benefits, food stamp (SNAP) benefits, heating-rental-phone assistance, partial off-sets to monthly Medicaid spending obligations, partial off-sets to penal institution funding, etc). State tax revenues would also grow significantly with the improving economic climate.
The housing market would stabilize, foreclosures should slow dramatically. Distressed properties would be more efficiently ‘moved’ in the marketplace.
Derivatives: There is a potentially dangerous $718.2 trillion global derivatives overhang which could destabilize global economic systems in the event of sporadic counterparty defaults, according to the Bank for International Settlements June 2024 report (https://www.bis.org/publ/otc_hy2411.htm )
The Office of the Comptroller of the Currency noted in its September 2021 report: “Counterparty credit risk is a significant risk in bank derivative trading activities…. The credit risk in a derivative contract is a function of a number of variables, such as whether counterparties exchange notional principal, the volatility of the underlying market factors (interest rate, currency, commodity, equity, or corporate reference entity), the maturity and liquidity of the contract, and the creditworthiness of the counterparty.
Because the credit exposure is a function of movements in market factors, banks do not know, and can only estimate, how much the value of the derivative contract might be at various points in the future.”
Major exposure among America’s top four banks, in terms of Credit Equivalent Exposures 1Q2024: Goldman Sachs ($55.680 trillion), J.P. Morgan ($54.018 trillion), Citibank ($49.865 trillion), Bank of America ($20.966 trillion). These levels happen to be down significantly from the Great Financial Crisis.
The Bank for International Settlements (BIS) has previously advised that if only 1% of large U.S. commercial bank derivatives are “at risk” and “10% of that ‘at risk’ money is lost you will wipe out up to 1/3 of those commercial banks’ equity.
The stabilization of certain asset classes, particularly housing and credit markets, would forestall, or substantially neutralize, potentially severe damages from future credit default events and failed risk management strategies.
The elimination of debt at the family level, along with stabilization of the U.S. Dollar would allow the Federal Reserve to reverse course and gradually move onto a rate normalization path, allowing for realistic, market-based price discovery and minimizing distortion in the credit markets. Slightly higher interest rates would also encourage and benefit savings by American families – as well as major business sectors such as investment/pension funds, insurance companies.
The Leviticus 25 Plan will lower healthcare costs for American families by eliminating layers of bureaucracy, oversight, and administrative costs. It will re-incentivize wise decision-making in the allocation of healthcare spending at the family level. Those families with increased healthcare funding needs would continue to have access to normal benefits from Medicare and Medicaid after a monthly off-set from their Medical Savings Account.
Federal Regulators seized 157 banks in 2010 “in the wake of economic distress and soured loans.” 92 banks were taken over in 2011, 51 were seized in 2012, 24 in 2013, and 18 in 2014. The U.S. cannot afford a return to those days financially stressed borrowers and the resulting structural problems that would again adversely impact America’s banking system.
The Plan will reignite economic growth, strengthen Main Street America, and strengthen the banking system with increased cash reserves, reduced exposure to at-risk loans, and enhanced collateral quality.
The Leviticus 25 Plan is America’s winning solution.
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