January 2022 – Inflation: Real Wages “Plummet”

Massive government spending initiativesand the law of unintended consequences…

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Real Wages Plummet As Inflation Hits The US Recovery

ZeroHedge, Jan 10, 2022 | Authored by Daniel Lacalle, Excerpt:

The United States December jobs report shows that the labor market remains weak.

The headline 3.9% unemployment rate looks positive, but job creation fell significantly below consensus, at 199,000 in December versus a consensus estimate of 450,000.

The weak jobs figure should be viewed in the context of the largest stimulus plan in recent history. With massive monetary and fiscal support and a government deficit of $2.77 trillion, the second highest on record, job creation falls significantly short of previous recoveries and the employment situation is significantly worse than it was in 2019.

The most alarming datapoint is that real wages are plummeting. Average hourly earnings have risen 4.7% in 2021, but inflation is 6.8%, sending real wages to negative territory and the worst reading since 2011.

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“Government is not the answer,” as Pres. Ronald Reagan once said. “Government is the problem.”

Government, over the long haul, has an individualizing characteristic of complicating social issues and making problems worse.

It is high time to decentralize the system – and allow U.S. citizens to directly allocate resources, on their own behalf, in ways that best serve their personal needs and wishes, and free them from the tentacles of government control over their daily lives.

It is time to decentralize the system in a way that will eliminate massive amounts of ground-level debt in America, generate significant government budget surpluses and reduce long-term debt, and restore economic liberty for all Americans.

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

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F.A. Hayek: The mortal danger of big-government “economic control.”

“Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower — in short, what men should believe and strive for.”  ― Friedrich Hayek

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The Leviticus 25 Plan – the most powerful economic acceleration plan in the world – the road to Economic Liberty. Leviticus 25 Plan 2022 (3913 downloads)

OpenTheBooks: Message to Taxpayers on BBB.

Wall Street Journal: Dear Mr. and Ms. Taxpayer

December 17, 2021 09:14 AM

Dear Mr. and Ms. Taxpayer:

In January, Democrats plan to bring back the so-called Build Back Better Bill. If your Congressman, your Senator vote for it, that vote says everything you need to know about who she/he represents. And it is not you.

Here is what your Congressmen and Senators say the bill costs: $1,750,000,000,000.

However, the permanent cost—as estimated by the Congressional Budget Office—to fund this pork-filled so-called Build Back Better Bill is up to $4,730,000,000,000.

So much for the president’s claim that this bill is “free” or “costs nothing.” Do the politicians really think we are that stupid?

Try to even imagine what $1 trillion—$1,000,000,000,000—is. We all know what a day is, what a year is. Instead of dollars, let’s think in terms of trillions of days. How many years are one trillion days?

2.7 billion years. 2,700,000,000. That is a lot of lifetimes!

If your trillion-touting Congressman and Senator vote for this bill, here is how they want to spend your present and future tax dollars.

This bill gives tax breaks to reporters, the media, unions, and trial attorneys. The bill-voting Congressman and Senators, obviously, believe it is more important to give tax breaks to reporters, the media, unions, trial attorneys than to plumbers, truck drivers, etc.—than to you, than to cut your tax dollars. This is a clear statement of who they really represent. And Mr. and Ms. Taxpayer Voter—it is not you.

If your Congressman, if your Senator vote for this bill, they have voted to give rich taxpayers in states like California, Illinois, and New York a big tax break. Again, not you.

If your Congressman, if your Senator vote for this bill, they are targeting small businesses. The bill increasing the occupational safety penalties (this is hard to believe) 10 times to $700,000 per violation. $700,000? It would break many businesses. If you, Mr. and Ms. Small Business Owner, do not follow the vaccine regulations you’re bankrupt.

Ronald Reagan stated, “The nine most terrifying words in the English language are: I’m from the government, and I’m here to help.”

This bill brings those terrifying words into reality. With this bill, your Congressman, your Senator voted to give the EPA $7 billion to employ a “climate corps.” Really? $7,000,000,000. That’s enough to fund an army of climate corps cops. If this bill passes, be prepared. That $7 billion climate corps army has to have something to do. The local climate cop will be on your doorstep surveying your carbon footprint.

Items as irresponsible as the above fill every page of this 2,466-page bill. All with lots of zeros. 2,466 pages… when is the last time you read 10 books?

Think of the price pain you are already feeling at the gas pump, in the grocery store. If this bill passes, that price pain will become more painful. Wait until you receive your heating bill this winter. This bill will accelerate the inflation price pain for a long time.

Your vote counts. Call, e-mail your Congressman. Call, e-mail your Senator. Ask why they voted for the bill. Will they vote for the bill? Ask them if they read this 2,466-page, 10-book bill. In all likelihood, few, if any, Congressmen or Senators read this bill, especially those who voted for the bill or will vote for it. To find your Congressman’s or Senator’s phone number and e-mail address, go to www.house.gov or www.senate.gov.

If your Congressman, your Senator vote for this bill, that vote says everything you need to know about whether they represent you. About whether they are qualified to remain in office. About whether you should ever vote for them again.

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Our Washington-based Democrat and Republican members of Congress should consider the one and only plan that favors individual citizens, rather than special interest groups… and that will actually reduce government deficits, rather than grow them precipitously… and that reduces dependence on government and restores economic liberty for all Americans

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.

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Hubbard: “Bailouts Shouldn’t Be Only for Banks.”

Glenn Hubbard, dean of the Columbia Business School and former chairman of the Council of Economic Advisers during the George W. Bush presidency,. recently urged that financial crisis interventions should not be limited to banks.

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*Bailouts Shouldn’t Be Only for Banks – WSJ

Wall Street Journal, 9-14-18 – Excerpts:

“To be sure, recapitalizing financial institutions was an important element of the policy response. The depletion of capital buffers before the crisis reduced loan supply and exacerbated fire sales of distressed assets once the market collapsed. Cash infusions by the Treasury under the Troubled Asset Relief Program, in concert with the Fed’s bold lender-of-last-resort interventions, blunted the impact of the crisis.

That said, the perceived lack of attention to “Main Street” fed public suspicion of the bailouts. The government appeared to be more interested in addressing the decline in bank capital than the decline in home values. Millions of homeowners who were current in their mortgage payments were unable to refinance at lower interest rates because they were underwater. Yet many of these mortgages were already guaranteed by Fannie Mae and Freddie Mac , meaning taxpayers held the credit risk. Banks and investors holding the mortgages would never receive less than par.

The government should have directed a mass refinancing of mortgages for primary homes in which the borrower was current in payments. This would have led to an increase in disposable income and in home prices totaling more than $100 billion, according to a proposal Christopher Mayer and I offered at the time. The Treasury instead offered a tepid version of this with the Home Affordable Modification Program and the Home Affordable Refinance Program. These initiatives lacked the boldness of the bank bailouts, and Americans noticed…”

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Hubbard concluded, “Ten years on, the U.S. still lacks a detailed plan for postcrisis intervention…”

What America really needs, to restore financial health to working families and ‘power up’ economic vitality throughout Main Street America – is a detailed plan for ‘pre-crisis’ intervention.

America needs a comprehensive economic plan that will insulate Main Street America from the next financial crisis and generate massive new tax revenue flows with a powerful, sustainable reduction in government deficits.

America’s new economic plan is currently loaded up and ready to go…

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Six Major Wall Street Banks Go On 1998-2020 “Crime Spree” While Raking in Billions from U.S Treasury and Federal Reserve. Time to ‘Reload’ America with Powerful New Economic Plan..

The six major Wall Street Banks highlighted below received highly preferential ‘targeted’ liquidity flows from the U.S. Treasury and the Federal Reserve over the past two decades, while at the same time engaging in a long list of criminal activities and lawless practices, including:

• money laundering;
• bribery;
• massive fraud in the sale of mortgage-backed securities;
• credit card and checking account abuses;
• foreclosure and debt collection violations;
• breaches of fiduciary duty;
• antitrust violations;
• market manipulation;
• enabling Ponzi schemes; and
• even violations of election law.

The Special Report below further highlights these details. The $195 billion in sanctions that were levied against these six megabanks were a mere ‘slap on the wrist’ in comparison to the TARP funding, Federal Reserve ‘Secret Liquidity Lifelines’ funding, and access to the Fed’s discount window that they received.  Source: bettermarkets.org

WALL STREET’S RAP SHEET
Illegal Activity at the Nation’s Six Largest Megabanks Has Continued
Since the 2008 Crash

Accessed from:  https://www.bettermarkets.org/sites/default/files/documents/Details_Report_Wall_Street%27s_Six_Biggest_Bailed-Out_Banks_2021.pdf

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WSJ: Fan and Fred set to “buy mortgages up to $1 million”…

The Housing Gang Is Getting Back Together For Another Bust

Fan and Fred will buy mortgages up to $1 million, repeating the mistakes that led to the 2008 crash.

By Peter J. Wallison

Wall Street Journal, 11-25-21 – Excerpts:

The Federal Housing Finance Agency’s headquarters in Washington, March 20, 2019.

When the Supreme Court ruled last year that President Trump’s director of the Federal Housing Finance Agency could be removed without cause, many of us who follow housing policy knew what was coming. The next day, the Biden administration replaced the FHFA director, Mark Calabria, with a temporary appointment. Get ready for another housing boom—and bust.

FHFA is the regulator of the two government-backed housing lenders Fannie Mae and Freddie Mac. Mr. Calabria had been working to spin off Fannie and Freddie, hoping to reduce the harm they could do to the economy. But the Biden administration’s replacement immediately reversed course. “There is a widespread lack of affordable housing and access to credit, especially in communities of color,” said Acting Director Sandra Thompson. “It is FHFA’s duty through our regulated entities to ensure that all Americans have equal access to safe, decent, and affordable housing.”

This was no surprise. In an earlier pursuit of affordable housing, begun during the Clinton administration, Fannie and Freddie had brought down the U.S. housing market by reducing down payments and loosening underwriting standards.

By June 2008, the two government-backed housing lenders had acquired 16.5 million subprime or otherwise risky mortgages, with a principal amount of $2.5 trillion, and created an unprecedented housing bubble. When that bubble burst, it caused the 2008 financial crisis, the worst since the Great Depression.

With a Democratic president now in charge, it seems clear that the GSEs will once again be deployed—as they were before 2008—as instruments of the government’s efforts to increase affordable housing.

But this time there’s a more ominous twist. This newspaper has reported that the GSEs will also intervene in a market that doesn’t need any help—homes priced up to $1 million. The problem the administration sees is that housing and rental prices are too high. The fact that the administration’s own policies have caused an inflationary trend in housing along with food, energy and gasoline, among others, is no deterrent……

But the government’s lower underwriting standards drive down standards for private lenders, too. Banks and other mortgage lenders—if they want to stay in the business—have to offer their mortgages on similar terms. People who own homes then dive into the market to take advantage of the low down payments, and housing prices rise even faster. This encourages cash-out mortgages, in which homeowners reduce the equity in their homes, sometimes to buy a boat.

The process goes on for years until prices are so high that sales growth falls and homeowners can’t sell their homes to pay off their mortgages. Housing prices then collapse, mortgages go unpaid. Banks, other lenders, and even Fannie and Freddie incur losses and another financial crisis begins.

Americans would know all of this if Democrats in Congress, the media, and the Obama administration had not blamed the 2008 crisis on insufficient regulation. Instead of fixing housing finance, and privatizing or eliminating Fannie and Freddie, Democrats gave us the Dodd-Frank Act and a more intrusive government. Those who refused to acknowledge the true cause of the 2008 financial crisis are now on the way to repeating it.

Mr. Wallison is a senior fellow emeritus at the American Enterprise Institute and author of “Hidden In Plain Sight: What Really Caused the World’s Worst Financial Crisis and Why It Could Happen Again.”

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“Government is not the solution. Government is the problem.” – President Ronald Reagan, Inaugural Address, January 20, 1981

Rather than re-instituting failed policies, that continually ‘grow government,’ America needs policies that will reduce our government’s footprint, and scale back dependence on government largess, particularly when that generosity in bestowing money targets already wealthy Americans.

America doesn’t need another round of GSEs underwriting mountains of risky debt. It needs a plan that will improve the financial wherewithal of American families, and raise the quality of debt that flows within the structure of a free market economy.

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.

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Hayek: “Envy the most anti-social and evil of all passions.”

However human, envy is certainly not one of the sources of discontent that a free society can eliminate. It is probably one of the essential conditions for the preservation of such a society that we do not countenance envy, not sanction its demands by camouflaging it as social justice, but treat it, in the words of John Stuart Mill, as ‘the most anti-social and evil of all passions.’”  –  Friedrich von Hayek, 1974 Nobel Prize, Economic Sciences

WSJ: Biden’s $4.6 Trillion Bill, “The Most Dishonest Spending Bill in American History”

Washington Republicans do not have a counter-plan.

America’s hard-working, tax-paying, values-oriented citizens, the backbone of our Republic, do have a counter-plan. This plan is the most powerful and dynamic economic acceleration plan in the world – The Leviticus 25 Plan.

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WSJ: The Real Biden Bill: At Least $4.6 Trillion    

Program by program, here’s how Democrats disguise the real cost of their entitlement blowout.

By The Wall Street Journal Editorial Staff

Updated Nov. 18, 2021 9:50 pm ET   /  https://www.wsj.com/articles/the-real-biden-bill-at-least-4-6-trillion-congressional-budget-office-score-congress-democrats-11637275848

The Congressional Budget Office on Thursday released its “official” cost estimates for the House tax and entitlement bill, but don’t believe it. The CBO gnomes aren’t lying about a 10-year deficit estimate of $367 billion. They’re obliged to score the bill under rules that Democrats have rigged with multiple tricks that disguise the real cost by trillions of dollars.

Democrats phase out the biggest programs in the bill while paying for them with 10 years of tax increases. They phase-in other programs and off-load costs to the states. The Penn Wharton Budget Model estimates the House bill would cost nearly $4.6 trillion over 10 years if temporary provisions are made permanent, as most will be.

The Committee for a Responsible Federal Budget (CRFB) pegs the cost at $4.9 trillion if temporary tax credits and programs are made permanent through 2031. This would add $1.5 trillion to deficits over the next five years without additional tax offsets. Let’s take a tour of this budget deception.

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Enhanced child allowances ($3,600 for children under age 6 and $3,000 up to age 17). This is the bill’s most expensive provision at about $130 billion a year, which is why Democrats limit it to one year. Does anyone doubt they’ll extend it in the future?

They may get help from Republicans, who won’t want to be attacked for raising taxes on families. CRFB says making the allowances permanent would cost $1.13 trillion. Based on current law, it would cost $1.5 trillion since the $2,000 tax credit from the 2017 GOP tax reform is set to drop back to $1,000 after 2025. So that’s nearly $1.4 trillion in hidden costs alone.

Earned income tax credit expansion. The bill nearly triples the maximum EITC value for childless adults—but only for one year. Its $15 billion annual cost would be $135 billion if extended over the decade. The kicker: Individuals can qualify based on their previous year’s earnings, so they technically don’t have to work to get it.

ObamaCare premium subsidies. Democrats in March extended eligibility to Americans making more than 400% of the poverty line and capped their premium payments for benchmark plans at 8.5% of income. Subsidies for lower earners were also increased so people making 150% of the poverty line don’t have to pay a penny toward their premiums, compared to 4.1% before the change.

These sweetened subsidies are set to expire after next year, but the bill extends them through 2025 while also allowing lower-income adults in states that opted out of the ObamaCare Medicaid expansion to qualify. CRFB says these subsidies will cost $530 billion if they are made permanent.

A new child-care entitlement. Households making up to 250% of their state’s median income would qualify for child-care vouchers, and their payments would be capped at 7% of income—less for lower earners. The bill appropriates about $100 billion through 2024 to states and “such sums as may be necessary” from 2025 to 2027.

Spending on this entitlement like all others can be expected to increase on autopilot, especially as providers raise prices to capture more subsidies. States will have to pick up 5% of the cost from 2025 to 2027, which somewhat reduces federal spending but could lead to state tax hikes down the road.

Universal pre-K. The bill appropriates about $18 billion to states for universal pre-K through 2024 and then “such sums as may be necessary” through 2027. States would be on the hook for about 5% of the cost starting in 2025 and 37% in 2027.

The pre-K and child care entitlements are estimated to cost only $380 billion because they phase in gradually and expire after six years. But there’s zero chance they will expire in 2027. Once the middle-class gets hooked, the entitlements will be impossible to repeal. CRFB estimates the two programs would cost $800 billion if made permanent.

The current $10,000 limit on the state-and-local tax (SALT) deduction increases to $80,000 through 2030. In 2031 it would return to $10,000. Penn Wharton says this gimmick would lead to $65 billion in additional tax revenue through 2031 though it would cost about $300 billion through 2025. Confused?

Under current law, the $10,000 SALT cap is set to expire in 2025 with most of the 2017 GOP tax cuts. So raising the cap to $80,000 would add to the deficit through 2025 but subtract from it through 2031. This gimmick will make it harder to extend the other expiring provisions of the 2017 tax reform, such as bonus depreciation for business. CRFB says that if the 2017 tax reforms are extended separately, any savings on paper would be erased and replaced with an additional $340 billion in costs.

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In sum, the House bill will cost $2 trillion to $3 trillion more than CBO is estimating because Democrats have camouflaged the costs. Penn Wharton estimates the bill’s tax increases and other revenue will yield about $1.8 trillion, but this doesn’t account for how the tax hikes will change the incentives to work and invest.

Keep in mind that CBO this summer projected that annual deficits will already exceed $1 trillion on average through 2030, causing U.S. debt to swell by $12.8 trillion—and that’s before the infrastructure bill or this House bill. When the spending all kicks in, and the rich are all taxed out, the middle class will be hit with a huge tax increase. This is the most dishonest spending bill in American history.

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The Leviticus 25 Plan expands U.S. citizens’ freedoms in allocating resources in ways that best meet their needs and desires. It provides massive debt elimination at the family level, while massively reducing dependence on government.

The Leviticus 25 Plan shrinks government and generates $383 billion budget surpluses during each of its first five years of activation. And it pays for itself entirely over the following 10-15 years.

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.

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Q1 2021: “Richest Americans have never owned a greater share of US household income than they do, largely thanks to the Fed”

Household Net Worth Hits Record $142 Trillion, Up $31 Trillion Since COVID, But There Is A Catch…

“The biggest wealth redistribution in history continues..”. 

ZeroHedge, Sep 23, 2021 – Excerpts:

Indeed, the latest data as of Q1 shows that the top 1% accounts for over $41.5 trillion of total household net worth, with the number rising to over $90 trillion for just the top 10%. Meanwhile, the bottom half of the US population has virtually no assets at all. On a percentage basis, just the Top 1% now own a record 32.1% share of total US net worth, or $45.6 trillion. In other words, the richest Americans have never owned a greater share of US household income than they do, largely thanks to the Fed. Meanwhile, the bottom 50% own just 2% of all net worth, or a paltry $2.8 trillion. They do own most of the debt though…

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And the saddest chart of all: the wealth of the bottom 50% is virtually unchanged since 2006, while the net worth of the Top 1% has risen by 132% from $17.9 trillion to $41.5 trillion.

Bottom line: the data underscore how the government’s fiscal scramble to speed up the “economic recovery” paired with the Fed’s continued ultra easy monetary policy have helped to protect and grow the wealth of the richest Americans: those who own assets, and who have seen their net worth hit an all time high… unlike the bottom 50% of Americans who mostly “own” debt. 

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The Fed’s massive liquidity transfusions into the Wall Street financial sector during the great financial crisis (2007-2010) ‘lined the pockets’ and… ‘lathered up’ the top officers and Board of Director members of Wall Street’s financial sector, including: Morgan Stanley, JPMorgan, Goldman Sachs, Bank of America, Citigroup, State Street, Wells Fargo, AIG, Merrill Lynch, along with multi-national foreign banking interests like Deutsche Bank, UBS AG, BNP Paribas, Barclays, Royal Bank of Scotland, Credit Suisse, and numerous others.

The average working class American received ‘crumbs’ during the big scramble to rescue the financial system.

Again, “… the wealth of the bottom 50% is virtually unchanged since 2006, while the net worth of the Top 1% has risen by 132% from $17.9 trillion to $41.5 trillion.”

It is time to ‘re-balance’ the system and grant the same opportunity for direct liquidity extensions to U.S. citizens that was so generously provided by the Fed to Wall Street’s financial sector over a decade ago.

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.

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Fraser Institute: Economic Freedom Most Important Factor Among Nations…

2015 Fraser Institute study highlights the vital benefits of economic freedom.

New study: Economic freedom makes you happier than age, employment, income     

By Jason Russell – Wall Street Examiner, Aug 5, 2015 – Excerpts:

Government size, property rights and trade are among factors used to determine a country’s economic freedom.

Countries with more economic freedom have happier people, according to a study published Tuesday by the Fraser Institute.

Economic freedom determines how much control someone feels they have over their life, which can affect happiness levels.

The happiness benefit is seen even when other factors that might increase happiness and also are prevalent in economically-free countries are held equal. These include higher levels of health, income, trust and employment. Economic freedom actually makes people happier than their income, age, political system or job status, the study says.

“Clearly, living in an economically free society has an important impact on the average citizen,” said Fred McMahon, the Fraser Institute’s Research Chair in Economic Freedom. “Past research concluded that economic freedom spurs prosperity, income, employment and better public institutions.”

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The Leviticus 25 Plan is America’s premier economic acceleration plan, and the only plan in America with the power to relight the fires of economic freedom.

The Leviticus 25 Plan restores economic liberty for all Americans, breaks the government dependency cycle for struggling U.S. citizens, eliminates massive debt burdens – public and private, and generates $383 billion government budget surpluses for each of its first five years of activation. It pays 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 2022 (3874 downloads)