Biden’s War on Banks

So the Biden administration has just guaranteed all depositors of the SVB bank. Now that he has taken this step, this has effectively nationalized all of the deposits of all banks in the country. Now banks are free to take all of the risks that they want, because they aren’t risking their own, or even their depositors’ money. It’s more free money from Uncle Sugar’s printing press.

The thing is, those who owned stock in the bank are getting screwed out of their money. The bank has declared bankruptcy, and anyone who owned stock in the bank can’t even sell it. In fact, those who were selling the bank short have also lost all of their money. The billionaire depositors are being bailed out, but the bank’s stockholders are not.

The government has removed risk from the banking sector, now it doesn’t matter if you are a good bank manager or not, you are gonna get paid by the taxpayers. There are those calling this a failure of capitalism, but they are wrong. In a free market system, well run businesses are rewarded, poorly run businesses fail. That is how the market stays healthy- the poorly run businesses are eliminated.

Not so in our system. In this system, poorly run businesses that are favored by government are continually bailed out, thus avoiding all consequences of their poor decision making. This is the government picking winners and losers. So let’s look ahead and see the consequences:

Stocks in small banks just became a whole lot riskier, while keeping huge balances in them are now without risk. Banks will have gigantic pools of money that they are now able to use to make risky loans and investments. If the risks don’t pan out, the depositors will be made whole, and the stockholders left holding the bag. A larger bank will then buy out those risky investments for pennies on the dollar. It’s a system begging for abuse and fraud. The ultimate consequence is the destruction of small banks, concentrating all banking in the realm of banks that the government has deemed “too big to fail.”

I wonder who paid one of the Biden clan to make this happen, and how much did it cost?

Free Welfare House

Substitute teachers in Highland county make $119 a day. It’s a part time job, where they only work when there is a classroom needing a teacher for the day. They are only needed on days that there are students in the school in need of supervision, so at most they can work 180 days per year. That maxes out their earning potential at less than $25,000 a year.

One of those substitutes, Lashawn Kinsey, bought a house in Highlands County, Florida on January 13, 2021. She did it by getting a mortgage for $127,645, meaning that she made a down payment of $2,355. At the time of the mortgage, she had three kids, which placed her below the Federal poverty level of $26,500 for a family of four. I can’t confirm this, but she is almost certainly on public assistance. On top of that, she is a college student, meaning that we are likely paying for her education with Pell grants, because she is a black single mother.

It’s no surprise then that she was soon unable to make the payments, and had to seek assistance from the Florida homeowner assistance fund to avoid foreclosure. The state has been picking up the tab for her mortgage and utility payments, or at least they were until an administrative screw up caused payments to stop back in October.

I don’t feel sorry for anyone in this story, except the US taxpayer. As all of you know, I am shopping for a new home. In order to do so, I had to allow the bank to do a net worth audit, income verification, and credit check. How could a bank loan money to someone with a part time job and no assets? This sounds like the stuff that was going on in the early part of the 2000s that caused the mortgage collapse.

The fact that I had to work a full time and a part time job while going to school, so I could afford to pay tuition, then had to save money and build credit in order to be able to buy a house, while some black woman gets a free one at taxpayer expense must be all of that white privilege I keep hearing about.

No Money for White People

Wells Fargo was sued in April 2022 for not loaning money to enough black people. On December 21, the bank reached a settlement agreement where they agreed to pay $3.7 billion in damages and civil penalties.

The bank has decided to take the only path that makes sense from a business standpoint. They are not going to lend any more money to white people. The noose tightens. If you are a white person with a job, you aren’t wanted in this society.

The Scope of the Problem

According to figures from the Congressional Budget Office (CBO), the US government spent a total of $6.8 trillion in 2021. Of that amount, $4.8 trillion was mandatory spending, otherwise known as entitlements. In other words, money that has to be paid out by law: Social Security, Medicare, Medicaid, Unemployment Compensation, Refundable Tax Credits, Paycheck Protection Program (PPP), and other mandatory spending. Another $350 billion was interest on the debt that we already owe, bringing the total outlay for mandatory spending to $5.2 trillion. The government only collected $4 trillion in taxes. So without spending a dime on the rest of the things that the government must do: defense, courts, prisons, and all of the alphabet agencies, the government is already running a deficit of $1.2 trillion. Add in all of those expenditures, and the deficit rises to $2.8 trillion. Compare that to my post on this topic from a decade earlier.

What is most alarming is the deficit as a percentage of our GDP, which right now is 12.4%. Over the past 50 years, the deficit has averaged 3.5% of GDP. Think about how much spending has risen to expand the deficit to this point. The national debt is now 100% of our gross domestic product. A decade ago, it was 34% of GDP. Three years ago, it was 80% of GDP. That’s without accounting for the money we owe the Social Security trust fund. Add in that amount, and the debt to GDP ratio rises to 128%.

The US isn’t even in the worst shape. Take a look at the debt to GDP ratios of the world’s top 10 debtor nations:

  1. Venezuela — 350%
  2. Japan — 266%
  3. Sudan — 259%
  4. Greece — 206%
  5. Lebanon — 172%
  6. Italy — 156%
  7. Libya — 155%
  8. Portugal — 134%
  9. Singapore — 131%
  10. Bahrain & the United States (tie) — 128%

In contrast, here are the ten countries with the lowest debt to GDP ratios.

  1. Brunei — 3.2%
  2. Afghanistan — 7.8%
  3. Kuwait — 11.5%
  4. Democratic Republic of the Congo — 15.2%
  5. Eswatini — 15.5%
  6. Burundi — 15.9%
  7. Palestine — 16.4%
  8. Russia — 17.8%
  9. Botswana — 18.2%
  10. Estonia — 18.2%

Note that Russia is the only large, first world country in the bottom ten. The suspicious side of me wonders if that is why the Democrats are so keen on starting a war with Russia.

What we are seeing here is that the entire world is on the verge of an economic collapse caused by profligate spending and loose fiscal policy.

Gas tax

During October, gas prices in Florida were 25 cents lower, thanks to a “tax holiday” signed by Governor DeSantis. That tax expires this morning. I’m sure the headlines from the MSM will be how it is DeSantis’ fault that Florida gas prices just went up by 25 cents a gallon.

Meanwhile, Joe Biden is slamming oil companies for making “record profits” while “price gouging” the American public.

Exxon Chevron made a combined profit of $29 billion for the second quarter for all sales of everything they sell, worldwide. During that same quarter, Americans used about 35 billion gallons of gasoline, meaning that the Federal government collected $7 billion in profits from the sales of gasoline. Then there are the taxes on other Exxon products: oil, natural gas, diesel, propane, and more. Who is making the record profits here?

Ronald Reagan summed it up nicely: Tax and spend.

Meanwhile, the US has less than a three week supply of diesel fuel, which is less than half of the normal amount. That doesn’t mean we won’t have any diesel in three weeks. What it means is that supply is short. That means that the law of supply and demand dictates a rise in diesel prices. Farmers rely on tractors, and our supply lines rely on trains and trucking, all of which depend on diesel. This will mean that the prices on everything will soon begin to climb. Right now, diesel stands at $5.25 a gallon in my area. Let’s see how that goes.

Buy Backs

Not those buybacks. Nope, after selling all of our oil reserves to the Chinese, the US is now planning to buy back 60 million barrels of oil at a future date.

The call for bids on the initial 60 million barrels “will take place in the fall of 2022 to secure delivery in future years when prices are anticipated to be significantly lower than they are today,” according to the press release.

I wonder if the press will investigate just who is making money on this deal. We already know that Hunter Biden is an investor in the company that is buying US oil, and I am wondering if he is an investor in the company that will be selling it back. I would also be interested to know if the deal is still “ten percent for the big guy.”

Can you imagine what the press would have done if Trump had been involved in a deal like this?

Social Security Means Tested

A new idea is being floated for Social Security. Read on:

Workers today are on the hook for Social Security taxes with the promise that they’ll be entitled to benefits down the line. Now, imagine someone who’s a higher earner pays those taxes for 45 years, only to then be told, come retirement, that they’re not getting benefits, or their benefits are getting reduced, because they also happened to save really well and have a large amount of nest egg-produced income.

So you will pay the tax and save like you are supposed to. Because your retirement savings are paying interest, you get nothing. Meanwhile, some low life 30 year old drug addict claims that he hurt his back and collects disability for the rest of his life after getting his student loan forgiven.

How is that for fairness?