SCARY: Economics expert explains what will happen to Americans if our national debt continues to grow



Joe Biden says a lot of crazy things, but perhaps the craziest is his claim that he’s lowered the U.S. deficit, which Stu Burguiere says “couldn’t be farther from the truth.”

Brian Riedl, senior fellow at the Manhattan Institute and an expert in budgeting, taxes, and economic policy, confirms that Biden is indeed lying.

“Last year, the deficit doubled from $1 trillion to $2 trillion – the largest share of the economy in American history, outside of wars and recession,” he tells Stu, adding that despite what Biden says, “the deficit is growing enormously.”

“The president has already added $5 trillion to 10-year deficits if you add up all the legislation he's signed. The fact that he claims he's reducing deficits is completely and mathematically absurd,” he continues.

“I assume what [Biden] is trying to do here is just compare it to peak COVID spending,” says Stu, “which of course is spending that he wholeheartedly approved and actually wanted more of.”

“The proper way to measure deficits is how they're doing compared to the baseline that was already expected by budget estimators,” Riedl says. “When the president took office, the Congressional Budget Office said the deficit will automatically fall to $ trillion and stay there for the next couple of years with the pandemic ending. Instead, [Biden] ran a $2 trillion deficit, so he's growing the deficit above the baseline, not reducing it.”

So just how bad is the situation?

According to Stu, “long-term, this gets incredibly ugly, really, really fast” and is “completely unsustainable.”

Riedl confirms this: “Yes, long-term, the numbers are totally unsustainable. If you assume current policies are extended, the budget deficit is going to go to 14% of GDP per year in a couple of decades. Historically, it's been 3% of GDP. The debt could grow to 200%-300% of the economy, depending on interest rates.”

Those are scary numbers. So what does that mean for the average American when the debt gets that big?

“It means that as much as half to two-thirds of your taxes will go into paying interest on the debt within the next couple of decades,” says Riedl, “and in fact, if interest rates keep rising, there's a scenario in which 100% of your taxes will just go into paying interest on the debt, as it becomes the biggest program in the entire budget.”

Further, granted “the path we're on, middle-class taxes will eventually double.”

“That's the danger of having debt go to 200%-300% of GDP. And that's the situation that the president is doing nothing about and in fact is pouring gasoline on the fire,” Riedl warns.


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Don’t Blame Depositors For Bank Failure, Blame Biden And SVB Management

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'De facto bailout of the banking system': Yellen says no bank bailouts, but Big Four reportedly set to grab $210 billion as tech elites get propped up



A California bank that long served tech elites and affluent venture investors collapsed on Friday, amounting to the greatest financial institutional failure since Washington Mutual went bankrupt in 2008.

While Biden officials have suggested that there will not be bailouts comparable to those enjoyed in the late 2000s, the Big Four banks will reportedly see a bailout by another name of roughly $210 billion, while the U.S. government makes wealthy tech workers whole again.

What is the background?

The New York Post reported that Silicon Valley Bank had $209 billion in assets as of Dec. 31, 2022, and was the 16th-biggest bank in the United States. Silicon Valley tech start-ups, venture capital firms, and corporate behemoths deposited at the bank and used its services.

The bank was adversely impacted by the downturn in technology stocks over the past year as well as by the Federal Reserve's endeavor to hike interest rates.

USA Today noted that in recent years, SVB bought billions of dollars' worth of purportedly "risk-free" bonds using depositors' cash. However, the value of these investments has significantly dropped because they now pay lower interest rates as compared to bonds issued today.

Since coastal tech elites and other California customers were hit hard by the downturn, they needed cash. Many began trying to withdraw all at once, prompting SVB to sell off its assets at a loss.

The bank was unable to raise additional capital through outside investors.

Amid liquidity concerns and share losses around $52 billion, regulators shut down the bank Friday, thereby protecting insured deposits and those remaining assets at the bank.

Centralists intervene

Treasury Secretary Janet Yellen claimed Sunday that unlike the big bank bailouts in 2008, Silicon Valley Bank and Signature Bank — a New York financial institution similarly brought to the brink of collapse last week — will not receive similar treatment in the aftermath of their breakdowns. The U.S. government will, however, reportedly be helping their affluent depositors.

Citing "systemic risk" as justification for extraordinary actions, the Treasury Department, Federal Deposit Insurance Corp., and the Federal Reserve have indicated that they will use the FDIC's insurance funds to prevent tech elites and other depositors in the failed banks from losing money, reported Axios.

"Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth," wrote Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin Gruenberg in a joint statement.

According to the trio, depositors will have access to all of their money as of March 13. The trio noted that no losses associated with the "resolution of Silicon Valley Bank will be borne by the taxpayer," but rather will be funded by fees on the banks.

Similar action will be used to bolster Signature Bank.

Whereas depositors, characterized in this case by USA Today as businesses and wealthy tech workers, will be protected up to $250,000 each, shareholders and certain unsecured debt holders are on their own.

Extra to these actions, the Federal Reserve indicated Sunday that it will "make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors."

Accordingly, the Fed has introduced a new lending program called the Bank Term Funding Program, enabling banks to take out advances from the Fed for up to a year.
Ben Eisen, writing the Wall Street Journal, noted that in exchange for these advances, banks must pledge "Treasurys, mortgage-backed bonds and other debt as collateral. By allowing banks to pledge their bonds, they can meet customer withdrawals without having to sell their bonds at a loss, which is what Silicon Valley Bank did last week, sparking a run on the bank."

"The biggest draw of this facility is that banks can borrow funds equal to the par value of the collateral they pledge," wrote Eisen. "This means that the Fed won't look to the market value of the collateral, which in many cases reflect big unrealized losses due to the jump in interest rates."

"That is a boon for banks, who were sitting on some $620 billion in unrealized losses on securities at the end of last year," added Eisen.

Should the banks fail to repay their advances, the Treasury Department, with President Joe Biden's blessing, is promising $25 billion in credit protection to the Fed just in case.

'De facto bailout'

ZeroHedge reported that contrary to Yellen's suggestion, the Big Four banks are effectively getting a $210 billion bailout.

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The editorial board at the Wall Street Journal concurred, writing that the guarantees for wealthy California tech magnates' uninsured deposits and the Fed's loans to big banks are together "a de facto bailout of the banking system, even as regulators and Biden officials have been telling us that the economy is great and there was nothing to worry about."

The board noted that the legality of the depositor end of the alleged bailout is unclear, since "Congress set the $250,000 insured limit to protect average Americans, not venture investors in Silicon Valley."

As for the one-year advances, the "Fed is essentially guaranteeing bank assets that are taking losses because banks took duration risk that Fed policies encouraged. This too is a bailout."

"Democrats and the press corps may try to pin the problem on bankers or the Trump Administration, but these are political diversions. You can’t run the most reckless monetary and fiscal experiment in history without the bill eventually coming due," added the board.

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The Russian central bank takes steps to stabilize the ruble as it plummets in value



The Bank of Russia is proceeding with emergency measures to stabilize its economy and to prevent the Russian ruble from losing further value.

For the first time, the Russian central bank said that it will intervene in the foreign exchange market and expand its Lombard list of securities that it will accept as collateral, Bloomberg reported.

The central bank did not mention whether or not it would raise interest rates but it did proceed with agreeing to provide Russian banks with additional liquidity. It is preparing to offer banks 1 trillion rubles — roughly $11.5 billion —in an overnight repo auction.

On Thursday, Russian President Vladimir Putin, ordered Russian forces to launch their invasion of Ukraine and strike strategic targets to demilitarize the country. Upon doing so, the ruble fell to a record low in value.

In response to Russia’s invasion of Ukraine, leaders of Western nations are implementing a wide array of sanctions to weaken the Russian economy.

Less than a day after the Russian invasion of Ukraine began, President Joe Biden announced that the United States would target Russia’s largest financial institutions, Sherbank and VTB, to prevent them from using the American financial system to conduct transactions. These sanctions are fairly comprehensive and will restrict nearly 80% of Russian banking assets.

Previously, Biden stopped short of calling for Russia’s removal from the Society of Worldwide Interbank Financial Telecommunication (SWIFT).

Biden said, “It is always an option, but right now it’s not the position the rest of Europe wishes to take.”

Kicking Russia out of SWIFT would greatly damage the Russian economy in the short term and make recovery incredibly difficult in the long term. It could prevent Russia from engaging in international transactions and would cripple their ability to export oil and gas.

On Saturday, the allied leaders of several Western countries — including the Untied States — expressed their support for preventing Russia from being able to access and utilize the SWIFT network.

The Western leaders agreed to target specific Russian banks for removal from the SWIFT system, to prevent the Russian central bank from manipulating its monetary policy, and to take aggressive steps to sanction and financially punish Russian individuals involved in the invasion of Ukraine.

By preventing Russia from using the SWIFT network, the West will effectively isolate them and inhibit them from conducting trade with some of its largest trade partners.

At the time of writing, a Russian ruble is worth about 0.012 U.S. dollars. The in-game currency for the popular children’s videogame “Roblox” – aptly named Robux – is worth about 0.0125 U.S. dollars per unit.

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'This is how you DESTROY an economy': Mark Levin torches Democrats' massive infrastructure bill



This week, Mark Levin launched a brand new series called "Mark's Short Takes" exclusively on BlazeTV. Mark's first short take is on the Democrats' love affair with the mighty U.S. dollar — they've never met one they didn't want to spend.

Last week, Democrats confiscated $1.9 trillion of your children's and grandchildren's money on a partisan COVID-19 "stimulus" package. Last year, they piled on $4.1 trillion in debt to prevent the economy from collapsing as blue state governors shuttered their businesses. Now, as an infrastructure stimulus looms, Mark is sounding the alarm, saying our nation faces "fiscal suicide" at the hands of the Democratic Party.

"In 18 months' time, we have spent, or have obligated for spending, $16.5 trillion," Mark exclaimed. "And what's coming next? Two more trillion, we're told, in infrastructure. And the Republicans are saying the Democrats are going to spend a tiny percent on infrastructure and load it up with yet more new entitlements, new programs, [and] new spending ... and they pretend they're going to pay for it. How are they going to pay for it? Massive tax increases on corporations, which means everything you buy is going to go up. Which also means, if they can't turn a profit they're going to fire people. Incredible."

"What will happen, we know from the past, is that those things will go overseas," he added. "Over and over again, we learn the hard way as a result of the Democrat Party, don't we? Massive tax increases on the productive sector, massive tax increases on capital investment and research, massive redistribution of wealth to the lowest levels of our economy. This is how you destroy an economy. This is how you destroy opportunity and wealth. This is how you create massive inflation."

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Biden Hauls in $200K From Goldman Sachs Exec Who ‘Screwed America’s Economy’

The former Goldman Sachs executive who devised the "Big Short" and told colleagues they would make "serious money" off the housing market collapse has poured $200,000 into Joe Biden's victory fund, filings show.

The post Biden Hauls in $200K From Goldman Sachs Exec Who ‘Screwed America’s Economy’ appeared first on Washington Free Beacon.