BofA: “Central Bank policies have exacerbated the gap between Wall Street and Main Street.” Solution: The Leviticus 25 Plan.

Central bank policies of QE, NIRP, ZIRP have unquestionably exacerbated the gap between Wall St & Main St in past decade.”  – Michael Hartnet, Bank of America

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BofA: Central Banks Have Unquestionably Exacerbated The Gap Between Rich And Poor

 ZeroHedge, Jul 20, 2018 – Excerpts:

In his latest weekly Flow Show, BofA’s Michael Hartnett touches on a familiar topic: the rise of global populism and where it ultimately ends: “the end of central bank independence“, which he calls the ultimately populist policy.

Confirming something we have said since inception and explaining – once again – the advent of such phenomena as Brexit, the European backlash against immigrants, and of course, Donald Trump, the BofA strategist writes that “central bank policies of QE, NIRP, ZIRP have unquestionably exacerbated the gap between Wall St & Main St in past decade.”

Meanwhile, the wealth gap continues and in the latest quarter the US private sector financial assets are now 5.5x greater than US GDP, an all-time high, with the bulk of said financial assets held by a tiny fraction of the population.

https://www.zerohedge.com/sites/default/files/inline-images/US%20financial%20assets%20to%20GDP.jpg?itok=NfrLhdvp

With the great divide between the haves and have nots continuing to grow – despite the election of numerous populist leaders in nations around the globe, most recently Malaysia, Austria, and Mexico – BofA warns that the inability of monetary & fiscal policy, global synchronized recovery, and record corporate profits to create sustained wage growth, investors must discount more protectionism, redistribution & ultimately debt monetization via central banks in coming years… all trends that a recession would dramatically accelerate.

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it is a very simple process to re-stabilize the system and grant citizens the same access to (free money) liquidity that the Fed provided to Wall Street’s financial sector during the economic crisis 2007-2010.

The Leviticus 25 Plan dissolves massive quantities of ground level debt in the U.S., generates $1.057 trillion federal government surpluses each year for the next five years, generates massive tax revenue growth for state and local governments, re-ignites economic growth, stabilizes the banking sector, restores citizen-centered healthcare market dynamics, and restores economic liberty in America.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

Leviticus 25 Plan 2018 (2848 downloads)

 

Central Banks ‘extraordinary policy maneuvers’ have done nothing to restore long term financial health to the global economic system. The is a powerful new plan that will re-energize the system, provide massive global debt relief, and provide long-term health and stability: The Leviticus 25 Plan

Central Banks opened up the liquidity floodgates during the 2007-2010 financial crisis, rescuing scores of major financial institutions and their ‘ultra-wealthy’ executives in the process.

Their efforts unfroze markets, filled massive ‘capital holes’ in the banking system, and provided short-term stability.

Their efforts did nothing, however, to provide longer-term health and stability to global economic systems.  Global debt is snowballing.  Debt service obligations are suffocating economic growth.

It is time for a change…

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‘Unelected Power’ Review: Monetary Mavericks – WSJ

Jun 27, 2018 – Excerpts:

The lesson of the past decade is that this promise is a lie.

The developed world’s four major central banks—the Fed, the Banks of England and Japan, and the European Central Bank—have executed a series of extraordinary policy maneuvers to rescue us from the 2008 financial panic, with debatable success. These include ultralow or negative interest rates; the purchase of sovereign debt in mind-boggling quantities; forays into commercial debt, equity and real-estate markets; and ventures into mortgages, small-business loans and other similar instruments.

Central banks have also taken on vast new supervisory powers over the financial system. Each of these measures has had profound effects on our economies: debtors win, savers lose; large, bond-issuing companies get credit, smaller firms don’t; owners of assets accumulate wealth, wage earners see their salaries endangered by inflation. Such distributional choices are normally left to elected leaders, but no one elects a central bank.

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The Central Banks ‘did what they thought they had to do’... to provide liquidity to rescue the global financial system – and restore global financial institutions to a state of  “financial health.”

In the process Central Bank lifelines bailed out Wall Street Financial institutions that had engaged in reckless leveraged speculation.  In other cases, certain institutions were engaging in rate fixing in the LIBOR and Foreign Exchange (FX) markets, at the same time they were being ‘transfused’ by the Central Banks.  Various institutions were engaged in fraudulent mortgage application filings.

It is now time for the Fed to grant U.S. citizens who did not engage in reckless leveraged speculation, or rate fixing in the LIBOR and Foreign Exchange (FX) markets, or fraudulent mortgage application filings – the same access to liquidity that was granted to Bank of America, Citigroup, Goldman Sachs, JP Morgan, State Street, Morgan Stanley, Wells Fargo, Lehman, Merrill Lynch, and financial behemoths like Deutsche Bank, UBS, Barclays, Royal Bank of Scotland… and many others.

Now is the time. The Leviticus 25 Plan – $75,000 per U.S. citizen.

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

Leviticus 25 Plan 2018 (2844 downloads)

 

 

 

 

Business Insider: Bank for International Settlements “blaring the siren on a new debt crisis”…

Global debt sirens blaring.  This is not going to end well.

Deflation pressures will gradually ‘freeze’ the system up, and eventually the Central Banks are going to have no other choice than to open up the liquidity floodgates and re-transfuse the global financial system with trillions of dollars.

Paper (fiat) currency values worldwide will evaporate.

Stay tuned..

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The bank for central banks is blaring the siren on a new debt crisis that could cause a long and painful recession  –  Business Insider, Jun 24, 2018 – Excerpts:
  • The Bank for International Settlements, nicknamed the bank for central bankers, said in a report that the ballooning levels of public and private debt are creating a “trap” that would be hard to escape.
  • Although higher leverage can boost growth in the short run, it comes at the cost of deeper and longer recessions down the road, the BIS said in its 2018 annual economic report.
  • It identified specific pockets of the market that leverage has made vulnerable, including the US commercial-real-estate market.

Ten years after a credit crisis drowned the global economy, central bankers are worried about debt.

The Bank for International Settlements, dubbed the bank for central bankers, said in its annual economic report for 2018 that the growing levels of government, corporate, and consumer borrowing create a “debt trap” that policy may not easily untangle down the road. Global debt across governments, nonfinancial corporations and households surpassed $160 trillion as at the end of 2017, according to the BIS.

The BIS placed some of the responsibility at the feet of central banks. It’s true that low interest rates and other policies, some unconventional, helped many economies recover after the financial crisis. But therein lies the trap: because growth and borrowing have become dependent on low rates, the economy, and financial valuations, are more sensitive to higher interest rates. This in turn makes it more difficult for central banks to raise rates, encouraging even more borrowing, the BIS said.

The report noted that since the financial crisis, there has been a continuous rise of public and private debt relative to gross domestic product. “Indeed, a growing body of studies documents how higher leverage, in both the private and public sectors, can boost growth in the short run, but at the cost of lower growth on average, including deeper and prolonged recessions, in the future,” the BIS said.

Screen Shot 2018 06 18 at 8.18.06 AM

“In the United States, in particular, corporate leverage today is at its highest level since the beginning of the millennium,” the BIS said, adding that most investment-grade companies are vulnerable to being downgraded.

The BIS also flagged US commercial real estate, where prices have recovered close to pre-crisis highs.

“Values there seem particularly vulnerable to rising long-term yields,” the bank said.

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A global debt crisis… needs a global debt elimination solution

That solution is The Leviticus 25 Plan, and the starting line for this powerful economic acceleration plan is ‘ground level’ debt elimination in the United States of America.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

Leviticus 25 Plan 2018 (2828 downloads)

Rochford: “Dirty Dozen Sectors of Global Debt” – There is only one solution to this crisis: Ground level liquidity. The Leviticus 25 Plan

Global debt loads are ominously compounding. Deflation pressures are mounting.

The world needs a re-targeted liquidity solution…

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The ‘Dirty Dozen’ Sectors Of Global Debt

Authored by Jonathan Rochford via Narrow Road Capital,

ZeroHedge, Jul 2, 2018 – Excerpts:

“This article is a run through of sectors where I’m seeing lax credit standards and increasing risk levels, where the proverbial frog is well on the way to being boiled alive.

Global High Yield Debt

Last month I detailed how the US high yield debt market is larger and riskier than it was before the financial crisis. The same problematic characteristics, increasing leverage ratios and a high proportion of covenant lite debt, also apply to European and Asian high yield debt. Even in Australia, where lenders typically hold the whip hand over borrowers, covenants are slipping in leveraged loans. The nascent Australian high yield bond market includes quite a few turnaround stories where starting interest coverage ratios are close to or below 1.00.

Defined Benefit Plans and Entitlement Claims

For many governments, deficits in defined benefit plans and entitlement claims exceed their explicit debt obligations. The chart below from the seminal Citi GPS report uses somewhat dated statistics, but makes it easy to see that the liabilities accrued for promises to citizens outweigh the explicit debt across almost all of Europe.

In the US, S&P 500 companies are close to $400 billion underfunded on their pension plans. This doesn’t seem enormous compared to their annual earnings of just under $1 trillion, but the deficits aren’t evenly spread with older companies such as GE, Lockheed Martin, Boeing and GM carrying disproportionate burdens.

Latest forecasts have US Medicare on track to be insolvent in 2026. At the State government level Illinois ($236 billon) and New Jersey ($232 billion) both have enormous liabilities, mostly pension and healthcare obligations. If you want to understand how pension and entitlement liabilities have grown so large, my 2017 article on the Dallas Police and Fire Pension fiasco and John Mauldin’s recent article “the Pension Train has no Seatbelts” are both worth your time.

US State and Municipal Debt

Meredith’s Whitney’s big call of 2010 that US state and local government debt would suffer a wave of defaults is generally considered a terrible prediction. However, after the 2013 default of Detroit and the 2016 default of Puerto Rico history might ultimately record her as simply being way too early. Illinois is leading the race to be the first default over $100 billion in this sector, but New Jersey and Kentucky could make a late surge. When the next crisis strikes and drags down asset prices, these states will see their pension deficits further blowout. At that point, there’s no guarantee they will continue to be able to rollover their existing debt.

The key lesson from Detroit’s bankruptcy was that bondholders rank third behind the provision of services and pensioners in the order of priority. Recovery rates of less than 30% should be expected when defaults occur. The key lesson from Puerto Rico was that just because a state or territory isn’t legally allowed to default, doesn’t mean that the Federal Government won’t intervene to allow creditors to suffer losses.

US Mortgage Debt

In the 2003-2007 housing boom, subprime residential lending was largely the domain of private lenders. Fast forward to today and the government guaranteed lenders are busy repeating many of the same mistakes. Borrowers with limited excess income and little or no savings are again getting loan applications approved. Fannie Mae and Freddie Mac remain undercapitalised with their ownership status unresolved, leaving the US government to pick up the tab again when the next wave of mortgage defaults arrives.

Developed Market Housing

It’s not just the US with excessively risky housing debt, Canada, Australia, Hong Kong and the Scandinavian countries are all showing signs of some borrowers taking on too much debt. Canada deserves a special mention as it combines skyrocketing house prices with second lienHELOCs and subprime debt. It’s hard not to make comparisons with the US, Ireland and Spain pre-crisis when you see those factors present.

US Subprime Auto

The occasional articles claiming that US subprime auto debt is this cycle’s version of subprime residential debt are substantially overstating the potential damage that could lie ahead. Cars cost an awful lot less than houses with auto securitisation volumes today running at around 7% of subprime home loan volumes in 2005 and 2006. This isn’t an iceberg big enough to sink the Titanic but it is a warning of the presence of other icebergs.

The quality of subprime auto loans is poor and getting worse with minimal checks on the borrower’s ability to afford the loan. Whilst unemployment has been falling, default rates have been increasing, a clear indication of how bad the underwriting has been. Lengthening loan terms and higher monthly payments are some of the ways lenders have been responding to the rate increases by the Federal Reserve. Some debt investors aren’t too worried though, recent deals have sold tranches down to a “B” rating. In 2017, issuance of “BB” rated tranches were sporadic but as margins on securitisation tranches have fallen investors have pushed further down the capital structure.

US Student Loans

The chart below from the American Enterprise Institute breaks down US CPI into the various components. Textbooks and college tuition are the standout items with childcare and healthcare also notable. Soaring education costs have had to be paid by students, who ramped up their use of student loans. A handful of former students have managed to end up owing over $1 million. Total student debt owing is now $1.49 trillion up from $480 billion in 2006, more than credit card balances and auto loans.

Emerging Market Debt

Whilst the developed market debt to GDP ratio has increased modestly in the last decade, emerging market debt levels have rapidly increased. China certainly skews these ratios with its extraordinary debt binge, but many other emerging markets have followed a similar pathway. The graph below from the IIF shows the combined ratios, but there’s a different make-up for developed and emerging markets. In developed markets the financial crisis led to soaring government debt to GDP ratios as governments ran deficits and bailed out banks and corporations. In emerging markets consumers, corporates, governments and banks have all increased their use of debt.

[snip]

Developed Market Sovereigns

The European debt crisis kicked off in 2009 with frequent flare ups since then. Greece’s default and restructure in 2012 saw private sector lenders take a haircut and contributed to Cyprus’s bailout later that year. The rolling series of ECB and IMF negotiations with Greece show that it’s structural problems are far from resolved and another default is likely in the long term.

Italy recently saw its cost of borrowing spike after the political parties that formed the new government considered asking the ECB for €250 billion of debt forgiveness. Both Greece and Italy have very high government debt to GDP ratios, consistently low or negative GDP growth and precarious banking sectors. Other developed nations most at risk are Japan and Portugal, ranked first and fifth respectively on their government debt to GDP ratios.

European Banks

The link between banks and sovereigns is critical to their solvency. Failing banks are often bailed out by governments, further increasing government debt levels. Failing governments often bring down their banks, as banks typically use government debt for liquidity purposes often treating it as a risk free asset. Europe has both problematic governments (Greece, Italy and Portugal) and problematic banks, mostly in Greece, Italy, Spain and Portugal. Deutsche Bank stands out for its size, high leverage and losses in each of the last three years. Given Deutsche Bank’s market capitalisation is little more than 1% of its asset base and it has shown an inability to generate a decent profit, a bail-in of senior debt and subordinated capital is arguably the only way to rectify its perilous situation.

Chinese Corporate Debt

The rapid growth of debt in China since 2009 is dominated by the corporate sector. The chart below from Ian Mombru shows that China has the highest corporate debt to GDP ratio of any country. Close to half of the debt is owed by property companies and property linked industries. This is a major risk as Chinese property is overpriced relative to incomes and there’s widespread overbuilding, especially in the ghost cities. As with almost all debt in China, there’s several issues that make risk assessment far murkier than it should be.

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Chinese Banks and Shadow Banks

It’s often forgotten that China is still an emerging market in many characteristics, with the quality of credit assessment one of those. Credit assessment in China is often based on connections and the prospective return, rather than a thorough assessment of cash flows and collateral. Whilst the default rate has ticked up this year, it remains unusually low by international standards as weak borrowers are allowed to rollover their debts. Chinese banks continue to lend to marginal state owned entities and the shadow banking sector continues to support speculative private sector borrowers.

[snip]

The Main Driver of Dodgy Debt

It’s frequently noted that recessions in the US typically occur after a series of Federal Reserve rate increases. The standard response is to assume that if rate increases were delayed or occurred at a slower pace then recessions could be avoided. This misguided thinking confuses cause and effect, ignoring the three ways that low interest rates encourage the build-up of dodgy debt;

(i) cheap debt allows a dollar of repayments to support a higher loan amount, allowing projects that wouldn’t normally proceed to receive the go ahead, inflating economic growth;

(ii) cheap debt causes a short term, temporary increase in investment returns (valuations increase in long dated bonds, equities, property and infrastructure) leading some to underestimate investment risks;

(iii) the above two factors combine to drag down prospective long term returns, leading to yield chasing as investors shift from safer assets to riskier assets to meet return targets.

[snip]

Conclusion

In reviewing global debt, twelve sectors standout for their lax credit standards and increasing risk levels. There’s excessive risk taking in developed and emerging debt, as well as in government, corporate, consumer and financial sector debt. This points to global credit being late cycle. Central banks have failed to learn the lessons from the last crisis. By seeking to avoid or lessen the necessary cleansing of malinvestment and excessive debt, this cycle’s economic recovery has been unusually slow. Ultra-low interest rates and quantitative easing have increased the risk of another financial crisis, the opposite of the financial stability target many central bankers have.

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Debt is Deflationary. The massive global debt load presents a potentially crippling liquidity trap. This crisis needs to be attacked with re-targeted ‘ground level liquidity infusions’.

In response to the financial market liquidity crisis during the great financial crisis (2007-2010), the U.S. Treasury and Federal Reserve provided hundreds of billions of dollars in direct liquidity transfusions to global debt issuers/packagers – major banks and insurers like Goldman Sachs, Morgan Stanley, AIG, Bear Sterns, Merrill Lynch, Citigroup,  Bank of America, UBS, Deutsche Bank, and many others.

This ‘response’ did nothing to improve the longer term financial health of citizens, financial markets, small business, or government entities.

It is now time to institute a comprehensive economic plan that will provide liquidity transfusions that will flow to the same debt issuers, but only after flowing first to debt holders – to eliminate significant amounts of ‘ground level’ debt.and improve the financial health of citizens, business, government entities, and… financial institutions.

The time is now.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$75,000 per U.S. citizen.  Leviticus 25 Plan 2018 (2821 downloads)

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

 

 

June 2018: Low Income Worker Housing Crisis. Solution: The Leviticus 25 Plan

America’s central-planning, big-government social welfare net is a cash-guzzling miserable failure in many ways.  Affordable housing for low income workers is one prime example.

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Affordability Crisis: Low-Income Workers Can’t Afford A 2-Bedroom Rental Anywhere In America

ZeroHedge, Jun 16, 2018 – Excerpts: 

The National Low Income Housing Coalition’s (NLIHC) annual report, Out of Reach, reveals the striking gap between wages and the price of housing across the United States. The report’s ‘Housing Wage’ is an estimate of what a full-time worker on a state by state basis must make to afford a one or two-bedroom rental home at the Housing and Urban Development’s (HUD) fair market rent without exceeding 30 percent of income on housing expenses.

With decades of declining wages and widening wealth inequality via the financialization of corporate America, and thanks to the Federal Reserve’s disastrous policies (whose direct outcome is the ascent of Trump), the recent insignificant countertrend in wage growth for low-income workers has not been enough to boost their standard of living.

The report finds that a full-time minimum wage worker, or the average American stuck in the gig economy, cannot afford to rent a two-bedroom apartment anywhere in the U.S.

According to the report, the 2018 national Housing Wage is $22.10 for a two-bedroom rental home and $17.90 for a one-bedroom rental. Across the country, the two-bedroom Housing Wage ranges from $13.84 in Arkansas to $36.13 in Hawaii.

The five cities with the highest two-bedroom Housing Wages are Stamford-Norwalk, CT ($38.19), Honolulu, HI ($39.06), Oakland-Fremont, CA ($44.79), San Jose-Sunnyvale-Santa Clara, CA ($48.50), and San Francisco, CA ($60.02).

For people earning minimum wage, which could be most millennials stuck in the gig economy, the situation is beyond dire. At $7.25 per hour, these hopeless souls would need to work 122 hours per week, or approximately three full-time jobs, to afford a two-bedroom rental at HUD’s fair market rent; for a one-bedroom, these individuals would need to work 99 hours per week, or hold at least two full-time jobs.

The disturbing reality is that many will work until they die to only rent a roof over their head.

The report warns: “in no state, metropolitan area, or county can a worker earning the federal minimum wage or prevailing state minimum wage afford a two-bedroom rental home at fair market rent by working a standard 40-hour week.”

The quest to afford rental homes is not limited to minimum-wage workers. NLIHC calculates that the average renter’s hourly wage is $16.88. The average renter in each county across the U.S. makes enough to afford a two-bedroom in only 11 percent of counties, and a one-bedroom, in just 43% .

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The Federal Reserve graciously provide hundreds of billions of dollars in direct emergency loans (“Fed’s Secret Liquidity Lifelines”)  to major banks and insurers during the Great Financial Crisis, 2007-2010, to include: Morgan Stanley, Citigroup, Bank of America, JP Morgan, Goldman Sachs, AIG, State Street, Merrill Lynch, Lehman, Wells Fargo, Barclays, UBS, Deutsche Bank, and many others.

The Fed bailed out the very institutions that precipitated the crisis with their leveraged speculation, derivative-fueled gambling binge…. some of the very institutions that took the money, and then went on to foreclose on home-owners who lost their jobs during the crisis and could not keep their morgtages current.

It is now time to grant U.S. citizens the same direct liquidity extensions that were provided to Wall Street’s financial sector – and provide citizens with the resources to regain control of their lives and livelihoods.

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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

Leviticus 25 Plan 2018 (2810 downloads)

 

 

 

Debt Slavery – and the Road to Freedom: The Leviticus 25 Plan

America needs an outside-the-box powerhouse economic acceleration plan,  one that will free up disposable income for Americans, generate massive new tax revenue flows, stimulate dynamic, free-market growth, and restore economic liberty.

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Where America’s Debt Slaves Are The Most Vulnerable

Authored by Wolf Richter via WolfStreet.com,

ZeroHedge, May 25, 2018 – Excerpts:

At year-end 2017, the ratio of non-housing debt – revolving credit such as credit card balances, plus auto loans and student loans – to disposable income reached a new record of 26.3%, up from 23% at the end of 2010, and up from 24% in 2007, the peak before it all came apart during the Great Recession:

https://www.zerohedge.com/sites/default/files/inline-images/US-household-debt-non-housing-v-disposable-income-1991_2017-a.png?itok=LGEVTFd6

So the ratio of non-housing consumer debt to disposable income – the burden these consumers carry on the backs in relationship to their incomes – is higher than ever, and only historically low interest rates have kept it manageable.

But interest rates are now rising, and many of these consumer debts have variable rates.

This explains a phenomenon that is already appearing: How this toxic mix – rising interest rates and record high consumer debt in relationship to disposable income – has now started to bite the most vulnerable consumers once again. And for them, debt service is getting very difficult.

In Q1, the delinquency rate on credit card debt at banks other than the largest 100 – so at the 4,788 smaller banks – spiked to 5.9%, higher than at the peak during the Financial Crisis, and the credit-card charge-off rate spiked to 8%. These smaller banks marketed to the most vulnerable consumers that had been rejected by the biggest banks. And now, once again, subprime is calling. Read…  Credit Card Delinquencies Spike Past Financial-Crisis Peak at the 4,788 Smaller US Banks 

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

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

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

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$75,000 per U.S. Citizen  –  Leviticus 25 Plan 2018 (2797 downloads)

The Two Big Reasons “States Are So Strapped For Cash” (WSJ)… and one dynamic solution: The Leviticus 25 Plan

Medicaid costs were projected to grow so fast, according to U.S. Secretary of Health and Human Services Michael Leavitt, that “within 10 years they would ‘crowd out virtually every other category of spending.’  State spending on higher education, infrastructure and safety, he predicted, would all get squeezed.” Source:  Wall Street Journal, March 29, 2018

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Why Are States So Strapped for Cash? There Are Two Big Reasons

WSJ, March 29, 2018 – Excerpts:

“As state and local officials prepare their next budgets, many are finding that spending decisions have already been made for them by two must-fund line items …. Medicaid, the state-federal health insurance program for the poor and disabled, and public-employee health and retirement costs.

Image result for "state budgets face historic squeeze" wsj

These days, they consume about one out of every five tax dollars collected by state and local governments. That is the highest share since Medicaid was created in 1965. Postretirement health benefits, which are harder to quantify, add to that burden and have cumulatively cost states more than $100 billion since 2008, according to government financial disclosures compiled by Merritt Research Services.

Those costs are outpacing growth in tax revenue year after year. In 2016, state and local governments collected about $136 billion more in taxes than they did in 2008, adjusting for inflation. Two-thirds of those additional dollars went to fund pensions and Medicaid, according to a Wall Street Journal analysis of Commerce Department spending data.

“The more we stare at the data, the more we realize all roads lead back to Medicaid and pensions,” says Dan White, a director at Moody’s Analytics who has studied the issue.

The resulting revenue squeeze is making it harder for governments to pay for core services such as education, infrastructure, police and fire protection.

The cash crunch is likely to get worse. Federal actuaries predict that Medicaid’s annual cost, which was $595 billion in 2017, will exceed $1 trillion in 2026. States and many localities pay about 38% of that tab. The remainder is covered by the federal government.”

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The most powerful economic acceleration Plan the modern world has ever seen will restore free market, freedom principles in health care with direct allocation of resources by the citizenry.

More importantly this Plan will offer citizens powerful incentives that will eliminate debt and restore financial stability for millions of American families, while at the same time generating explosive tax revenue growth for state and local governments.

The Leviticus 25 Plan – An Economic Acceleration Plan for America  –  Leviticus 25 Plan 2018 (2727 downloads)

 

Von Hayek: “Independence, self-reliance, the willingness to bear risks..”

Friedrich A. von Hayek, 1974 Nobel Prize, Economic Sciences – The Road to Serfdom:

“It is true that the virtues which are less esteemed and practiced now–independence, self-reliance, and the willingness to bear risks, the readiness to back one’s own conviction against a majority, and the willingness to voluntary cooperation with one’s neighbors–are essentially those on which the of an individualist society rests. Collectivism has nothing to put in their place, and in so far as it already has destroyed then it has left a void filled by nothing but the demand for obedience and the compulsion of the individual to what is collectively decided to be good.”

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The Leviticus 25 Plan is a dynamic economic initiative granting, in form,  the same direct liquidity benefits to citizens that were provided to major banks and insurers during the great financial crisis.  This plan revitalizes the high ideals of independence, self-reliance and freedom from government control over the daily affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens, private enterprise, 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  –  Leviticus 25 Plan 2018 (2725 downloads)

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March 2018 Interest rate hike. Massive Fed IOER payouts to global banks. The new ‘leveler’: The Leviticus 25 Plan

Fed payouts: Big banks win, U.S citizens lose.

It is time for a new, citizen-centered economic plan…

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Today’s Biggest Winner: Banks To Get An Extra $5 Billion In Interest From The Fed

ZeroHedge, Mar 21, 2018 – Excerpts:

Today’s 25bps hike in rates to 1.75% will have little impact on how much interest is paid to the trillions of dollars held in checking and savings accounts across the US (simply because banks continue to drown in over $2 trillion in excess reserves and thus do not really need all those deposits). It will, however, have a notable impact on how much cash the Fed pays out to banks in the form of interest on excess reserves (just don’t call it a subsidy).

As the chart below shows, after today’s rate hike, the Fed will be paying $37 billion in annualized interest to banks, an increase of $5 billion from the last rate hike.

https://www.zerohedge.com/sites/default/files/inline-images/IOER%20paid%20out.jpg?itok=Wwl_eB9c

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And now on to the discomfiting part of this financial tale…

40% Of The Fed’s Interest On Excess Reserves Is Paid To Foreign Banks

ZeroHedge, Jul 13, 2017

Courtesy of the Fed’s H.8 statement, however, we can quickly figure out [the amount of interest paid out to foreign banks].

Recall that as we showed first all the way back in 2011, the total cash on the books of commercial banks with operations in the US tracks the Fed’s excess reserves almost dollar for dollar. More importantly, the number is broken down by small and large domestic banks, as well as international banks. It is the last number that is of biggest interest, because now that Congress is finally scrutinizing the $4.5 trillion elephant in the room, i.e., the Fed’s balance sheet, it may be interested to know that approximately 40%, or $838 billion as of the latest weekly data, in reserves parked at the Fed belongs to foreign banks.

https://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/07/05/fed%20reserves%202.jpg

This is a subsidy from the Fed, supposedly an institution that exists for the benefit of the US population, going directly and without any frictions to foreign banks….

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The Fed will now, following the rate hike this week, pay out $37 billion as interest on excess reserves to major bank.  Since, foreign banks account for approximately 40% of those excess reserves, the U.S Federal Reserve will be paying out $14.8 billion to foreign banks in the coming year..

Again: “This is a subsidy from the Fed, supposedly an institution that exists for the benefit of the US population, going directly and without any frictions to foreign banks….”

This is a Fed-fueled foreign bank funding fiasco – of the highest order.

It is time to grant U.S. citizens the same access to liquidity that the U.S. Federal Reserve is ‘flushing’ through their ‘policy pipes’ to major U.S. and foreign financial institutions.

It all starts here, with the most powerful economic acceleration plan in the world:

The Leviticus 25 Plan – An Economic Acceleration Plan for America   Leviticus 25 Plan 2018 (2695 downloads)

 

U.S. Social Spending Drives Growing Debt Burdens. Answer: Decentralize, via The Leviticus 25 Plan

America’s massive debt burdens are grinding steadily higher, and one of the primary drivers over the past two decades has been increasing growth curve of entitlement spending.

The U.S. Government Accountability Office (GAO) has been warning that the projected forward-looking, 75-year fiscal gap shows us to be on a dangerous, unsustainable fiscal path.

We must make a change…

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Smashing The Myth Of America’s “Stingy” Welfare State

ZeroHedge, Mar 2, 2018 – Excerpts:

According to the 2016 social expenditure database at the Organisation for Economic Co-operation and Development (OECD), public social spending as a percentage of GDP in the US was 19.4 percent:

https://www.zerohedge.com/sites/default/files/inline-images/spending1_1.png?itok=knGZUIT8

One immediate solution is to decentralize the welfare state immediately, and take it out of the hands of the federal government.

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There is a right way to address America’s runaway entitlement spending, and there are wrong ways.

Here is the ONE right way:

The Leviticus 25 Plan – An Economic Acceleration Plan for America – The Leviticus 25 Plan pdf (2677 downloads)