US Budget Deficit Triples To Record $3.1 Trillion In 2020 As US Spends 90% More Than It Collects

ZeroHedge, Oct 16, 2020 – Excerpts:

Those who have been following the record surge in US public debt (excluding the roughly $100 trillion in off-balance sheet obligations), which exploded by $3 trillion in the three months following the covid shutdowns and which just hit an all time high $27.1 trillion this week, will be all too aware that the US budget deficit this year – and every year after – will be staggering.

What all this means, is that for the full 2020 which ended on Sept 30, the US spent $6.552 trillion and collected just $3.420 trillion, which also means that outlays were a record $3.1 trillion, 91% higher than receipts, which also includes the $9.7BN received last month and $81.9BN YTD in deposits of earnings by the Fed.

And since outlays equal receipts plus the deficit, this means that for the fiscal 2020, the US budget deficit more than tripled to a record $3.1 trillion (compared to “just” $984 billion in 2019), higher than at any other time in US history and unfortunately due to “helicopter money” it is unlikely that the exploding deficit will ever shrink again until the monetary system is overhauled… or collapses.

At some point the market will realize that this insanity is simply unsustainable, something which the CBO pointed out in its latest long-term debt forecast.

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There is a simple, yet astoundingly powerful economic acceleration plan that can solve our debt-plagued dilemma.

It is centered upon eliminating a massive expanse of ground level debt, reducing dependence on government by citizens and businesses, generating massive new flows of tax revenue (with out raising taxes), reestablishing a citizen-centered health care system, and restoring free-market dynamics and economic liberty in America.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2021 (3852 downloads)

America will benefit principally from a ‘Powerful Economic Recovery.’ Much less from an ‘Equitable Post-Covid Recovery.’

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An Equitable Post-Covid Recovery – WSJ

Oct 7, 2020 – Excerpts:

How to help women and minorities, who have been suffering most in the downturn.

Meanwhile, the number of workers unemployed for 27 weeks or longer rose by 781,000 in September, to 2.4 million. Unless job creation speeds up, this number will continue to rise. A lesson from the 2007-09 recession: The longer workers remain jobless, the more likely they are to stop looking and drop out of the labor force altogether.

[snip]

The Bureau of Labor Statistics predicts that the U.S. labor force will grow over the next decade by only 0.5% a year. The workforce is aging, which means employment is likely to grow more slowly. This is why the BLS and the Congressional Budget Office are predicting annual economic growth of less than 2% between now and 2030. If the pandemic dropouts aren’t brought back into the labor force, this gloomy picture will darken.

Because low-wage workers are disproportionately racial and ethnic minorities, the uneven recovery is bound to exacerbate inequality. Black employment has declined by more than 11% since February, versus about 6% for whites, 7.2% for Asians, and 9.5% for Hispanics. Blacks have recovered only 35% of the jobs they lost during the pandemic, compared with 47% for Asians, 51% for Hispanics and 58% for whites.

Then there’s inequality of the sexes. Since February, employment has declined more for black women than black men and for white women than for white men. The labor-force participation rate for women has declined by 3.6 points since the start of the pandemic, double the decline for men. Of the nearly 1.1 million people who stopped working or looking for work in September, the Washington Post reports, almost 80% were women.

The next president will face this daunting set of problems, which the pandemic exacerbated but didn’t create. Absent a coordinated and vigorous policy response, these issues will outlive the pandemic. Here’s what the next president should do:

• Keep the economic recovery on track.  

• Reabsorb displaced workers and the long-term unemployed into the labor force as quickly as possible.  

• Reduce employment gaps between white Americans and minorities.  

• Acknowledge that help for working women is a necessity if the U.S. is to have an adequate labor force in coming decades.  

These steps should be the starting point in January—no matter who is president.

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No. The ‘starting point’ is….

America needs a powerful round of ‘ground level’ liquidity infusion – to effect a massive ‘debt elimination’ event.

THIS will benefit U.S. citizens across the board – and set America on course for long-tern economic growth, federal debt reduction, and economic liberty.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2021 (3834 downloads)

There is a clean and powerful path out of this dismal debt swamp – and America needs to get moving soon…

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Budget Office Releases Terrifying Long-Term Debt Forecast

ZeroHedge, Sep 22, 2020 – Excerpt:

Debt as a percentage of GDP is projected to increase in most years as the government incurs budget deficits that are large relative to the growth of the economy. If current laws generally remained unchanged, federal budget deficits would be substantially larger over the next 30 years than they were over the past 50 years. In CBO’s projections, deficits rise after 2030 as mandatory spending—in particular, outlays for the major health care programs—and interest payments on federal debt grow faster than revenues.  That growth in deficits causes projected debt to rise as a percentage of GDP over the 2030–2050 period.

Finally, here is the most terrifying chart in the latest CBO forecast – and of all CBO forecasts released yet – which as hinted in the title, is the one which projects US debt for the next 30 years, and shows that over the next three decades nothing short of hyperinflation, or war, can save the US.

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The Leviticus 25 Plan is the most powerful, debt-busting economic acceleration plan on the planet:

* Massive debt elimination for U.S. citizens (mortgages debt, credit card debt, student loan debt, car loan debt)

* Federal deficits in the trillion dollar range converted to $237 billion budget surpluses over each of the first five years of activation (2021-2025).

* State and Local government drowning in red ink converted to powerful new growth trends in revenue and reductions in outlays.

* Medicare Trust Fund restored to solvency.

* Social Security Trust Fund – massive new inflows from robust long-term economic growth.

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 2021 (3810 downloads)

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

Note – during the Great Financial Crisis 2007-2010, AAA-rated paper (Mortgage Backed Securities) were getting quietly loaded up with sewage grade mortgages. It was hailed as an advance in ‘financial innovation.’ And the system eventually collapsed when the defaults started ‘rolling in.’

Global Creditworthiness is deteriorating. Defaults will be ‘on a roll’ again. It is just a matter of time.

The Daily Shot, Sep 14, 2020 – Credit: The global corporate debt market credit quality has been deteriorating over the past few decades.

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The world is drowning in DEBT. Economic chaos awaits all who dawdle. Millions of citizens will experience a violent ‘whiplash’ again, when the next crisis ensues. It is time to insulate those millions of people at ‘ground level’ – by granting direct liquidity extensions to citizens – the same direct liquidity extensions that were provided to global banking elites: Morgan Stanley, Citigroup, Bank of America, JP Morgan, Goldman Sachs, Wells Fargo, Merrill Lynch, RBS, State Street, Barclays, UBS, Deutsche Bank, Credit Suisse, PNP Paribas, and numerous others..

The U.S. has a plan – the most powerful economic acceleration plan of modern times.

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 2021 (3796 downloads)

Banks foreclosed on 804,000 homes in 2011…

That works out to a rate of over 2,200 per day.  Every day in 2011.

While foreclosures eased slightly in March 2012 vs March 2011, “RealtyTrac … banks will repossess close to 1 million homes this year.”

For 2012, that would work out to over 2,700 per day. Every day.  For the next 365 days.

The Leviticus 25 Plan, on the other hand, would ‘power up’ liquidity at the family level, providing debt relief and a strong dose of financial security to American citizens.  These benefits have been utterly lacking throughout the government’s orchestrated (‘central planning’) response to the ongoing, 3-year financial crisis.

The debt relief benefits of the Leviticus 25 Plan would provide the equivalent of what is known in the ‘derivatives’ world as direct “support of the underlying assets.”  Namely housing (with additional support for any other form of pledged collateral).

Daily American News – Apr 12, 2012 :  “At the end of last year [2011], some 1.5 million U.S. homes had mortgages that had gone unpaid at least 90 days, according to Mortgage Bankers Association data.

First-time foreclosure notices, such as warnings of initial default, are the first step in the process that can potentially result in a home being foreclosed upon. Homes can exit the process if the overdue payments are paid. Sometimes, a bank will allow that the home be sold for less than what the borrower owes on their mortgage, a so-called short sale.

All told, 101,939 U.S. homes received a first-time notice in March, the biggest monthly increase since October, RealtyTrac said.

Thirty-one states posted a monthly increase in homes with a first-time foreclosure notice. Nevada led the pack with an increase of 153 percent.

Even so, foreclosure activity overall — as measured by the number of properties receiving a notice of default, scheduled for auction or repossessed by lenders — sank in March to the lowest level since July 2007, the firm said.

In all, 198,853 homes received a foreclosure-related notice last month, down 4 percent from February, and down 17 percent from March last year.

Banks took back 55,075 homes in March 2012, down 14 percent from the previous month, and down 25 percent from March 2011.

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The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2021 (3792 downloads)

CDC Emergency Powers overreach – Landlords ‘screwed.’

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WSJ: CDC “Housing Seizure”

By WSJ Editorial Board, Sept. 3, 2020 – Excerpts:

The CDC decides it can abrogate rental contracts nationwide.

Governments during the pandemic have arrogated to themselves vast emergency powers, but the rule of law still matters. The Centers for Disease Control and Prevention’s sweeping ban on evictions this week tests the legal limits of emergency powers and sets a bad precedent.

The CDC order that takes effect Friday bans landlords from evicting tenants who claim they can’t afford to pay rent due to the pandemic. Congress in March banned evictions in federally subsidized housing through the end of July. But the CDC order encompasses all housing and extends through the end of this year.

Tenants who expect to earn less than $99,000 ($198,000 for couples) this year must merely sign an attestation that they lost income, have sought all available federal rental assistance, and would be homeless or forced to move in with someone if evicted. Landlords who want to remove nonpaying tenants would have to prove tenants are lying. Good luck.

The order covers millions who aren’t destitute but don’t want to find less expensive housing. Most Americans are honest and won’t exploit the moratorium to live rent-free, not least because the order would require them to make up payments (assuming government doesn’t absolve them). But some will take advantage of the forbearance.

Thousands of landlords around the country have accommodated struggling tenants by reducing or deferring payments….

About half of the 48 million rental units in the U.S. are owned by small businesses, many of which could be foreclosed on if they don’t pay their mortgages. Some might have to raise rents on other tenants to cover costs. There’s no free rent.

The legality of the CDC order is also dubious. It relies on Section 361 of the Public Health Service Act, which allows the agency to take measures to prevent the spread of communicable diseases between states. The agency’s rationale is that people who get evicted will move in with family or friends and spread the disease.

This is by far the biggest emergency-power overreach…  It abrogates private contracts and expropriates private property, which warrants a legal challenge by landlords under the Constitution’s takings clause….

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There is a better way – where everybody wins…

The Leviticus 25 Plan grants U.S. citizens a robust liquidity extension which is fully capable of restoring ‘financial order’ in their personal lives.

It will provide citizens with the wherewithal to honor their rent payment obligations, consumer credit obligations, and keep their mortgage contracts ‘current.’

It will reduce their dependence on government ’emergency powers,’ government entitle programs, and solve the problem of food insecurity.

It will allow Americans to eliminate massive amounts of household debt, and thereby provide a surging boost to the U.S. economy with vigorously rising tax revenues.

The Leviticus 25 Plan will pay for itself entirely over a period of 10-15 years, and it will generate a $237 billion federal budget surplus over the first five years of activation (2021-25).

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 2021 (3791 downloads)

Global Bankruptcies Soar Despite Trillions In Liquidity

ZeroHedge, 8-24-20 – Excerpts:

Authored by Daniel Lacalle,

Misguided lockdowns have destroyed the global economy and the impact is likely to last for years.

One of the most alarming facts about this crisis is the pace at which bankruptcies are rising. Despite an $11 trillion liquidity injection and government aid in 2020, stocks and bonds at all-time highs and sovereign as well as corporate yields at all-time lows, companies are going bust at the fastest pace since the Great Depression. Why? Because a solvency crisis cannot be disguised by liquidity.

Trillions of liquidity are giving investors and governments a false sense of security because yields are low and valuations are high, but it is a mirage driven by central bank purchases that cannot disguise how quickly companies are entering into long-term solvency issues. This is important because soaring bankruptcies and the rise in zombie companies means less employment, less investment and lower growth in the future.

Liquidity only disguises risk, it does not resolve solvency issues driven by collapsing cash flows while costs remain elevated.

According to the FT, large US corporate bankruptcy filings are now running at a record pace and are set to surpass levels reached during the financial crisis in 2009. As of August 17, a record 45 companies each with assets of more than $1bn have filed for Chapter 11 bankruptcy.

In Germany, about 500,000 companies are considered insolvent and have been zombified by a pointless “insolvency law” that simply extends the pain of businesses that are technically bankrupt. In Spain, the Bank Of Spain alerted that 25% of all companies are on the verge of closing due to insolvency. According to Moody’s estimates, more than 10% of businesses in the leading economies are in severe financial stress, many in technical bankruptcy.

How could this happen? Since the 2008 crisis all policy actions have been aimed at keeping sovereign bond yields low, bailing out bloated government spending and deficits and the massive liquidity injections have benefitted the large quoted companies that have used the money to shield their valuations through buy-backs and cheap debt. However, cheap money has also triggered malinvestment, poor capital allocation and higher-than-normal levels of debt. Small businesses did not see the alleged benefits of the massive liquidity and deficit programs, while large companies became too comfortable with elevated levels of dent, poor return on capital employed and solvency ratios that were simply too low in a growing economy.

Cheap money and massive bailouts have planted the seeds of a solvency crisis that was triggered by the irresponsible decision of some governments of shutting down entire economies. If you have an economy that is highly leveraged and with weak productivity and solvency ratios, shutting down the economy for two months is the last nail in the coffin. And the ramifications will last for years.

Bailing out zombie firms will only make things worse, and new lockdowns could be lethal. The solution is what no government wants to do because it does not grab large headlines or give the impression that politicians are saving the world: Supply-side measures that activate the mechanisms of refinancing, re-structuring and efficiency improvement.

More demand-side policies, pointless stimulus plans driven at building anything at any cost, and more liquidity injections will only make things worse and drive the economy to a stagflation crisis where the next problem will be to enter into a financial crisis as bankruptcies soar and banks’ asset valuations fall as non-performing loans balloon despite massive central bank action..

To end the zombie firm problem and the risk of even more bailouts we need more open market, less red tape, and more flexible re-structuring mechanisms. Anything else will simply deliver stagnation.

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America needs a powerful new plan to reach the goals of “Supply-side measures…more open market… less red tape… restructuring and efficiency improvement,” and that plan must include a dynamic mechanism to effect massive debt elimination for Main Street America.

There is one plan in the world with the raw power to deliver massive debt elimination, and generate substantial government budget surpluses, and reignite economic growth and drive small business success.

America needs an economic acceleration plan that promises to secure economic health for all citizens – and restore economic liberty.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2021 (3770 downloads)

The U.S. Congress and the U.S. Federal Reserve have been stringing Americans along with a succession of ‘little fixes’ for millions of financially distressed families to help ‘pay the bills’ for a for ‘the next few months.’ But their stimulus checks, and Payroll Protection Plans, and rent/mortgage forbearance mandates are doing nothing whatsoever to ‘fix’ any of the major complications underlying our current economic crisis.

American families and small businesses are struggling mightily to hang on…

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ZeroHedge headlines – August 2020

Delinquent FHA Mortgages Soar By Record 60% To All Time High, As Homeowner Budgets Implode

If only they had bought the dip…  Aug 17, 2020

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Dramatic Photos: Desperate For Provisions, Thousands Of Cars Line Up At Texas Food Bank

“If it wasn’t for this, we’d probably go hungry. If it wasn’t for church, and food giveaways, the kids would be going hungry.”  Aug 14, 2020

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Food Bank Strains Emerge As Economy Falls Off Fiscal Cliff 

“We’ve definitely already seen food-security needs increase, just in a week, since the extra unemployment has ended.”   Aug 11, 2020 

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“Disastrous Economic Situation” – Small Firm Bust Goes Unnoticed As Economy Flounders  

A combination of firms going bust and depressionary unemployment levels have tremendous spillover effects…   Aug 12, 2020

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‘Little fixes’ will now longer do. Time is running out…

America needs a plan featuring massive debt elimination, starting at ‘ground level’ for Main Street America.

The Federal Reserve, through various ‘credit facilities,’ have provided trillions of dollars to global banks in the form of direct liquidity infusions, credit guarantees, the transfer of illiquid (often low grade) assets from the balance sheets of banks onto the Fed’s balance sheet, and other creative ‘extraordinary’ measures.

The Federal Reserve, through the creation of a new ‘Citizens Credit Facility,’ can now grant U.S. citizens the same direct access to effectual liquidity infusions that will have the power to get America up and running again.

The Leviticus 25 Plan will restore financial security for American families. It will eliminate massive debt burdens and generate enormous amounts of fresh capital flowing into the U.S. economy.

It will generate powerful new tax revenue flows and payroll tax flows for both the federal government and state governments – producing a $237 billion surplus at the federal level over each of the first five years of activation (2021-2025).

It will save the federal government and state governments hundreds of billions of dollars in entitlement outlays.

It will vastly improve the capital reserve ratios across the banking sector.

It will lead to long-term strength for the U.S. Dollar.

II will restore economic liberty in America.

Finally, America needs a plan that will pay for itself entirely over a period of 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.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2021 (3763 downloads)

It is time for America to move on eliminating massive amounts of ‘ground level’ debt, and ‘power up’ America’s economic engine, and provide a clear path to financial security for American families.

If ‘bankrupt companies’ can ‘unfile’ to get more bailout money … and Chinese-owned companies can get PPP loans…

And if major banks, including foreign banks can get massive amounts of direct liquidity transfusions from the Fed’s ‘lending facilities’…

Then U.S. citizens deserve nothing less than to be granted the same direct access to liquidity extensions that have been provided to the likes of Goldman Sachs, Bank of America, Citigroup, JP Morgan, Morgan Stanley, UBS, RBS, Barclays, and others.

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The Circle Of Death: Bankrupt Companies “Unfile” To Receive Government Bailouts, Then Immediately File Again

Some companies “unfile” for bankruptcy, arrange a PPP bailout loan, and then almost immediately refile for bankruptcy.   Aug 4, 2020 

Millions Worth of PPP Loans Went to Chinese-Owned Companies, Report Finds

“Loans went to affiliates of three Chinese companies that featured on a Pentagon list of 20 firms that are owned or controlled by the Chinese military.”  Aug 5, 2020

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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 2021 (3757 downloads)

Mailed 7.27.20 to: The White House, 1600 Pennsylvania Ave. NW, Washington, DC 20500

July 27, 2020

Dear President Trump –              

I am writing to you today to update you on an ‘election-winning’ economic plan for America: The Leviticus 25 Plan (https://leviticus25plan.org/ )

Several months ago, the Wall Street Journal analyzed “Big-Government Contagion” (Mar 27, 2020), which highlighted many of the pitfalls and longer-term dangers involved with governmental entities appropriating large sums of money, either as a matter of ongoing operations or in response to crises, on behalf of citizens – rather than allowing citizens to allocate funds directly, in ways that best meet their individual needs and interests, and more fully support free market dynamics.

The Wall Street Journal also proposed a type of blue print for citizen-driven economics in health care three years ago:  “Give Medicaid Dollars Directly to Patients” (Apr 12, 2017).

To that end, The Leviticus 25 Plan provides for America a dynamic, comprehensive economic acceleration plan which will breathe new efficiencies into our U.S. health care system and revive free market dynamics and economic liberty for individual U.S. citizens and main street America.

The American people are the foundation of our Republic, and we must have a healthy and financially sound foundation to set America on course for a bright and promising future.

There is an economic acceleration plan that will deliver on that promise, one that yields massive ‘ground level’ debt elimination, citizen-centered health care, fundamentally sound economic growth trends, and extraordinary budget benefits for Federal, State, and Local governments – with $237 billion Federal budget surpluses in each of the first five years of activation (2021-2025):  The Leviticus 25 Plan.

This powerhouse economic plan for America is a “winning plan” for U.S. citizens.

Respectfully,

Bernie Hendricks, Brookings, SD