- The Richest 1% Will Own Two-Thirds Of Global Wealth By 2030, Report Finds
Back in November, Credit Suisse highlighted an alarming – yet altogether unsurprising – milestone in the increasing concentration of global wealth that has been perhaps the most influential force behind the populist revolts that rocked the US in 2016 and have continued to unfurl across Europe. According to the Swiss bank’s annual “global wealth pyramid,” for the first time, the wealthiest 1% of the world’s population had accumulated more than half of its aggregate household wealth.
Credit Suisse’s researchers describe in stark terms how global wealth inequality had actually improved somewhat in the years between the start of the new millennium and the financial crisis – but in the years after, the gap between the world’s richest and poorest individuals widened dramatically, one of the most pernicious aspects of the Fed and the global cabal of central banks pumping easy money into the global financial system.
The researchers said that “our calculations show that the top 1% of global wealth holders started the millennium with 45.5% of all household wealth. This share was about the same until 2006, then fell to 42.5% two years later. The downward trend reversed after 2008 and the share of the top one percent has been on an upward path ever since, passing the 2000 level in 2013 and achieving new peaks every year thereafter. According to our latest estimates, the top one percent own 50.1 percent of all household wealth in the world.”
But while CS’s report was unequivocally dire, a recent report published by the UK Parliament is even more harrowing.
According to the Guardian, projections produced by the House of Commons library suggest that the top 1% of the world’s wealthiest individuals will own roughly 64% of the planet’s wealth by 2030.
An alarming projection produced by the House of Commons library suggests that if trends seen since the 2008 financial crash were to continue, then the top 1% will hold 64% of the world’s wealth by 2030. Even taking the financial crash into account, and measuring their assets over a longer period, they would still hold more than half of all wealth.
Since 2008, the wealth of the richest 1% has been growing at an average of 6% a year – much faster than the 3% growth in wealth of the remaining 99% of the world’s population. Should that continue, the top 1% would hold wealth equating to $305tn (£216.5tn) – up from $140tn today.
Analysts suggest wealth has become concentrated at the top because of recent income inequality, higher rates of saving among the wealthy, and the accumulation of assets. The wealthy also invested a large amount of equity in businesses, stocks and other financial assets, which have handed them disproportionate benefits.
The study was the brainchild of Liam Byrne, a former Labour cabinet minister, who hopes it will factor into the discussion when the financial chiefs of the world’s largest countries meet in Buenos Aires late this year for a G-20 summit.
“If we don’t take steps to rewrite the rules of how our economies work, then we condemn ourselves to a future that remains unequal for good,” he said. “That’s morally bad, and economically disastrous, risking a new explosion in instability, corruption and poverty.”
Unfortunately, the public is extremely sensitive to growing wealth disparity, and polls show most people in the UK are growing increasingly cynical about the prospects for change. Already a plurality of Britons believe the superrich have more influence and power than national governments.
New polling by Opinium suggests that voters perceive a major problem with the influence exerted by the very wealthy. Asked to select a group that would have the most power in 2030, most (34%) said the super-rich, while 28% opted for national governments. In a sign of falling levels of trust, those surveyed said they feared the consequences of wealth inequality would be rising levels of corruption (41%) or the “super-rich enjoying unfair influence on government policy” (43%).
Indeed, even if the incomes of the wealthiest individuals were frozen at 2017 levels, their share of the world’s wealth would still expand thanks to returns on their investments, according to Danny Dorling, a professor at Oxford.
“Even if the income of the wealthiest people in the world stops rising dramatically in the future, their wealth will still grow for some time,” he said. “The last peak of income inequality was in 1913. We are near that again, but even if we reduce inequality now it will continue to grow for one to two more decades.”
One Tory MP quoted by the Guardian pointed out that while wealth inequality remains a problem, liberal capitalism has lifted more people out of poverty than any other system of government. Though this overlooks the fact that, while this holds true in most of the biggest developing countries, in the developed world, the working and middle class are at risk of seeing their standard of living decline vs. that of their parents’ generation.
George Freeman, the Tory MP and former head of the prime minister’s policy board, said: “While mankind has never seen such income inequality, it is also true that mankind has never experienced such rapid increases in living standards. Around the world billions of people are being lifted out of poverty at a pace never seen before. But the extraordinary concentration of global wealth today – fuelled by the pace of technological innovation and globalisation – poses serious challenges.
“If the system of capitalist liberal democracy which has triumphed in the west is to pass the big test of globalisation – and the assault from radical Islam as well as its own internal pressures from post-crash austerity – we need some new thinking on ways to widen opportunity, share ownership and philanthropy. Fast.”
Demands for action from the group include improving productivity to ensure wages rise and reform of capital markets to promote greater equality.
While this sounds like a plausible plan, the obstacles to it being put into practice are myriad – including opposition from corporations and the wealthy, who might prove reluctant to part with what they’ve gained. And even once central banks retract their stimulus and securities valuations inevitably fall, it remains unclear whether this trend can ever be reversed.
One thing’s for sure: While pundits have been eager to call the end of the populist wave, as long as the wealth divide continues to widen, anger toward the status quo will continue to metastasize.
- UK: Funding Textbooks That Teach Children To Blow Themselves Up
Authored by Douglas Murray via The Gatestone Institute,
In 2016, a study carried out by the Organisation for Economic Co-Operation and Development (OECD) found that for literacy in the developed world, England ranks dead last. The same study also stated that for numeracy in the developed world, England ranks second-to-last. Even among graduates from English universities, the OECD study found, one in ten had literacy or numeracy skills that were classified as “low”.
These results are astonishing, not to mention shaming. They reflect decades of misdirection in British education, including the misdirection of resources. Understandably, successive governments complain about a lack of resources. But all of those laments only serve to highlight the strangeness of Britain’s latest priorities in funding education.
This past weekend it emerged that last year the British government funnelled £20 million to Palestinian schools. A review by the Institute for Monitoring Peace and Cultural Tolerance in School Education (IMPACT-se) found that these revenues go towards funding a curriculum which omits teaching peace, promotes the use of violence — specifically jihad — and encourages martyrdom. An analysis of the textbooks used in Palestinian schools funded by the UK government — using UK taxpayers’ money — found that these textbooks, which come from the Palestinian Authority (PA), “exerts pressure over young Palestinians to acts of violence.”
A science textbook intended for 12-year-olds, for example, claims to teach them Newton’s second law of motion in the following way:
“During the first Palestinian uprising, Palestinian youths used slingshots to confront the soldiers of the Zionist Occupation and defend themselves from their treacherous bullets. What is the relationship between the elongation of the slingshot’s rubber and the tensile strength affecting it?”
Another textbook, which is meant to be used for teaching arithmetic to 9-year-olds takes a highly local approach to the matter. Math lessons as provided by the PA — courtesy of the UK government — teach Palestinian children addition by asking them to calculate the number of “martyrs” in various Palestinian uprisings.
Elsewhere, the study found that social studies books included images of children in their school rooms with an empty desk fitted with a sign reading “martyr”. Repeatedly the textbooks refer to the “Occupation”, to “Zionist Occupation”, “Zionists” and much more, all of which perpetuates the notion that Israelis are “invaders” and “oppressors”. In other words, these textbooks are clearly and consistently intended to indoctrinate a new generation of Palestinian children to hatred of their neighbours. Any government genuinely interested in promoting peace would withdraw funding from any entity — wherever in the world it was — which taught violence as such a core part of its curriculum.
The British government, however, has long been strangely shameless when it comes to funding the Palestinian Authority. The British government, for instance, hides behind the claim that the PA’s authorised textbooks for use in Palestinian schools have got better in recent years. In fact, this IMPACT-se report find precisely the opposite. Last year, the PA launched a much-vaunted new school curriculum for children in grades 5-11. Just last week the Minister of State for International Development, Alistair Burt, stated that “all of their [the PA’s] schools in the West Bank are using the revised 2017 PA curriculum.”
The IMPACT-se investigation revealed, however, that “radicalization is pervasive across this new curriculum.” And not just pervasive, but pervasive “to a greater extent than before.” The study found that in textbooks which pretend to be teaching “equal rights'”, girls are encouraged to sacrifice their lives. A textbook aimed at 5th grade children (that is, children aged 10) teaches that “drinking the cup of bitterness with glory is much sweeter than a pleasant long life accompanied by humiliation.” Another textbook urges that “Giving one’s life, sacrifice, fight, jihad and struggle are the most important meanings of life.”
In a statement, in response to the Sunday Times (UK), which broke the story, Alistair Burt, MP, and Minister of State for the Middle East at the Foreign and Commonwealth Office and Minister of State at the Department for International Development, revealed that the UK taxpayer continues to support this radical curriculum of incitement. He admitted that the UK taxpayer funds the wages of 33,000 teachers in the West Bank, who use these curriculums. “UK-funded public servants and teachers… are therefore involved” he said. Instead of investigating these findings or announcing the immediate cessation of funding to the Palestinian Authority until such a time as it stops preaching incitement to another generation of Palestinian children, the UK’s Department for International Development responded to the findings with a typical form of bureaucratese:
“Our support is helping around 25,000 young Palestinians go to school each year. The UK government strongly condemns all forms of violence and incitement to violence.”
Well, the UK government clearly is not so opposed to “all forms of violence and incitement to violence” that it isn’t happy to continue to use millions of pounds of UK taxpayer money to assist the PA in radicalising and inciting Palestinian children.
Pictured: A screenshot from the Sunday Times article exposing the British government’s funding of a Palestinian curriculum which promotes the use of violence — specifically jihad — and encourages martyrdom.
The Department for International Development also announced that it was now “planning to conduct a thorough assessment of the Palestinian curriculum and evidence”. It added that “if we find evidence of material which incites violence, we will take action.” Evidence has been given to it in abundance, not just now but for years.
This is the true scandal for Britain: that while the UK government fails to pump the resources needed into helping young British children to grow up literate and numerate in Britain, it pumps millions of pounds into the Palestinian Authority to make sure that young Palestinian children think that a career of violence is a career worth pursuing. While failing to help British children grow up, the UK government helps Palestinian children to blow themselves up. It is a horrible legacy for any country, but for Britain, a shameful one.
- Lobbying For Slavery In Brazil
Some 10 percent of Brazil’s top politicians received donations by companies entangled in scandals involving modern day slavery. As Statista’s Patrick Wagner notes, even though donations to politicians are not illegal in Brazil, the money received is of questionable origin.
Donators include JBS – the world’s biggest meat producer – and other enterprises that can be found on Brazil’s ‘dirty list’ for slave labor. Over 41 percent of all recipients are part of the influential ruralist caucus, a congressional faction keen on revoking land rights of indigenous communities and limiting efforts to combat slavery.
The following chart shows the top beneficiaries and their party affiliation.
You will find more infographics at Statista
A total of 16 percent of all parliamentary deputies of the Brazilian Democratic Movement (MDB), the party of President Michel Temerand impeached president Dilma Roussef received said donations. The leftist Workers’ Party (PT) of former president Lula da Silva, who is currently facing imprisonment due to corruption, even has received a stunning 20 percent of donations from companies on the ‘dirty list’.
- How Gun Control Laws For "Mentally Ill" Could Disarm Those Who Question Authority
Authored by John Vibes via The Free Thought Project,
In the growing debate surrounding the natural right to self-defense, one of the most popular proposed methods of gun control has been restrictions on gun-ownership for those who are deemed to be mentally ill.
This is a measure that is often suggested by liberals and conservatives alike, but it is important to stop and consider what something like this might entail.
When any collective group is banned from owning a gun, they are effectively turned into second-class citizens. In the case of mental illness, that classification is so vague and open to interpretation that it could possibly be applied to over half of the population, depending on which criteria you use.
Mental illness can be very hard to identify since there is no kind of official test for most conditions, most people are diagnosed according to the subjective opinions of the doctors that observe them. Even the most severe conditions, like schizophrenia, can be very difficult to identify and is often misdiagnosed.
Psychiatric drugs are another possible factor that could get someone marked by the government as mentally unstable, but a classification like this would allow for large portions of the US population to be disarmed.
According to a 2016 study by JAMA Internal Medicine, more than 1 in 6 Americans are on some type of psychiatric drug. This is not to mention the large number of people who report symptoms of depression or anxiety and don’t take medication.
A policy like this could also allow the government to disarm dissidents and political enemies. As psychiatry became more influential towards the middle of the 20th century, rulers around the world began using “mental illness” as an excuse to lock away anyone who might disagree with them. The Soviet regime became notorious for this practice by labeling all political dissidents as “mentally ill” so they could be locked away in institutions where they were no threat to the establishment.
The United States government also has a long history of slapping unruly citizens with the mark of mental illness. President Franklin Roosevelt famously called his detractors “the lunatic fringe,” and this type of attitude towards activists has carried on in the halls of government to this day.
In the dictionary of mental illnesses, known as DSM-5, published by the American Psychiatric Association, there is actually a condition listed for people who have a problem with authority. Oppositional Defiant Disorder is a name that psychiatrists made up to identify children who won’t do what they are told, and now even adults are being diagnosed with this condition as well.
Meanwhile, politicians and mainstream media are quick to label anyone who questions the official narrative as a “conspiracy theorist,” a term that has been falsely associated with mental illness in pop culture.
A study in 2017 set out to determine whether or not believing in conspiracy theories was a form of mental illness. As expected they found the exact answer that they were looking for, people who don’t trust the government and mainstream media are crazy, and suffering from something called illusory pattern perception.
There is another dilemma that arises in the discussion of disarming people who are accused of having a mental illness, and that is the fact mentally ill people are 10 times more likely to be victims of violence than the rest of society because they are often seen as easy targets.
Complicating matters further is the fact that these people can’t depend on the police to help them in these situations, as studies have shown that the mentally ill are 16 times more likely to be killed by a police officer than the average person.
According to the Virginia-based Treatment Advocacy Center, a minimum of 1 in 4 fatal police encounters ends the life of an individual with severe mental illness.
To prevent mentally ill people from owning firearms is a severe form of “ableist” discrimination, and also opens the door for nearly anyone to be classified as mentally ill.
There are sometimes extreme cases where a person’s mental instability is creating a dangerous situation for the community, like the recent Parkland shooting, for example. In this case, the shooter had a known history of violence, regularly made threats and was visited by police on numerous occasions because of his threatening behavior. In cases like this, it is reasonable to keep an eye on someone, restrict their access to firearms, or possibly quarantine them from society in the most extreme situations.
There are many laws on the books currently would have allowed the FBI or local police to intervene in their initial encounters with the shooter, but they decided that a student known for violent outbursts and talking about carrying out school shootings was not worth looking into.
As TFTP reported earlier this month, there is a law on the books known as the Extreme Risk Protection Order or ERPO, which went into effect in June of 2017. This law is used when a person is considered an “extreme” threat as reported by police and family members. An ERPO must be approved by a judge and only after this person is proven to be a danger to themselves or others can police move in to confiscate their weapons.
These types of targeted approaches specifically aimed at individuals who are a known source of violence in the community would do far more to prevent tragedies from happening, than a wide-reaching law that could threaten the rights and safety of millions of innocent gun owners.
- Maryland House Passes $5BN Incentive Package Meant To Lure Amazon's HQ2
In one of the most aggressive attempts to cajole Amazon into selecting their state as the location for the e-commerce giant’s second headquarters, the Maryland General Assembly just passed a bill offering the company a $5 billion incentive package should Amazon choose to settle in Maryland’s Montgomery County.
Montgomery County is competing with Washington DC, Northern Virginia and 17 other areas that made Amazon’s HQ2 “short list”, which was released earlier this year. Specifically, Amazon is eyeing the site of the former White Flint Mall.
The “Promoting ext-Raordinary Innovation in Maryland’s Economy,” or PRIME (yes that misplaced capitalization was intentional) would require Amazon to create at least 40,000 qualified jobs (with an average comp of at least $100,000). The company would also need to spend $4.5 billion on “eligible costs” like capital projects, the Baltimore Business Journal reported.
After passing the House, the bill now passes to the desk of Maryland Gov. Larry Hogan.
As lawmakers see it, if Amazon chooses Montgomery County, the incentives will be worth the 50,000 jobs the company could bring to the county. If Amazon doesn’t, the state loses nothing.
Montgomery County, specifically a site encompassing the former White Flint Mall, is the only Maryland site on Amazon’s HQ2 short list. Maryland is competing with Washington, D.C., Northern Virginia and 17 other areas across the country for the 50,000 jobs and $5 billion investment the online retail and web services giant has promised with its second headquarters. Seattle-based Amazon is expected to fill at least 8 million square feet as it phases in HQ2 over the next two decades.
However, while the bill found broad support among Democratic state legislators, Republicans vehemently opposed it on the grounds that it amounted to a corporate giveaway. A legislative study found the bill would cost the state $5.5 billion in total revenue through 2054 – while the county would lose nearly $1 billion. However, that analysis doesn’t factor in any revenue generated by Amazon.
Opposition to the bill, largely from Republicans, was intense. They described the incentive — to include roughly $3 billion in property, income and sales tax credits and $2 billion in transportation improvements — as a “bribery package,” an “expensive pig in a poke,” as “craziness,” as “corporate welfare,” and as a “gold mine” for one of the wealthiest companies, led by one of the wealthiest people, in the world.
“They need economic stimulus like a fish needs a bicycle,” said Del. Herb McMillan, R-Anne Arundel.
However, a private study produced by the Sage Policy Group at the state’s request found that Amazon’s headquarters could pump $7.7 billion in wages into the state while producing $17 billion in increased economic activity.
Amazon is expected to announce its HQ2 later this year, but there have been hints that the headquarters could wind up either in Montgomery or somewhere else in the broader Washington, DC area.
A surge in web traffic to an article about an environmental award won by Arlington County from an internal Amazon intranet led to speculation that Maryland could be the company’s pick – or at least it would be a strong contender.
And another study found that the Washington DC area would be the most sensible pick for Amazon.
- Celente: "Murderers & Thieves Sold Out America"
Via Greg Hunter’s USA Watchdog blog,
Renowned trends researcher Gerald Celente says the trade war President Trump is starting against China must be fought for America to survive. Celente explains,
“We have lost 3.5 million jobs (to China). Some 70,000 manufacturing plants have closed. Why would anybody be fighting Trump to do a reversal of us being in a merchandise trade deficit of $365 billion? Tell me any two people that would do business with each other and one side takes a huge loss and keeps taking it…
So, why would people argue and fight and bring down the markets because Trump wants to bring back jobs and readjust a trade deficit that, by any standard, is destroying the nation?”
Who’s to blame for the lopsided trade deficits destroying the middle class of America? Look no further than the politicians and corporations buying them off. Celente charges,
“They sold us out. The European companies and the American companies sold us out, and the people fighting Trump are also the big retailers because they’ve got their slave labor making their stuff over there. They bring it back here and mark up the price, and they make more money. If they have to pay our people to do that work, they have to pay them a living wage and they can’t make enough profit. That’s who is fighting us…
You go back to our top trend in 2017, and it was China was going to be the leader in AI (artificial intelligence) now and beyond, and that is exactly what happened. All the corporations have sold us out. . . .The murderers and the thieves sold out America.”
Celente thinks the odds are there will not be a financial crash in 2018 “because they are repatriating all that dough from overseas at a very low tax rate and because of the tax cuts from 35% to 21%. These are the facts. In the first three months of this year, there have been more stock buybacks and mergers and acquisitions activity than ever before in this short period of time because of all that cheap money going back into the corporations. That’s what’s keeping the markets up.”
Just because the stock market is near all-time highs doesn’t mean there is no risk from a black swan. Celente says,
“I want to tell everyone what our major signal that we are watching closely that is going to determine where the markets are going. It’s the signal. It’s a signal that you will know whether to bail out or stay in, and that’s gold prices. With all of this volatility going on, gold prices have not moved much. They are still stuck in the $1,300 to $1,350 (per ounce) range. Even on Friday, with all the volatility, gold only moved up a couple of bucks. That is the indicator to watch, and here is our forecast. Gold has to break above $1,385 per ounce. It has been unable to get near there…
The next big number will be $1,450. When it solidifies over that, we forecast a jump to the $2,000 range. Gold is the ultimate safe haven asset. It has not been acting like that during this market shift.”
On the recent poll where 77% of people thought the MSM was putting out so-called “Fake News,” Celente says, “It’s not only “Fake News, it’s junk news, and that is why people are tuning out.” Expect the trend to continue.
Join Greg Hunter as he goes One-on-One with Gerald Celente, Publisher of “The Trends Journal.”
- U.S. Air Force's Clandestine X-37B Military Space Plane Marks 200 Days In Orbit
The U.S. Air Force’s unmanned X-37B space plane has marked its 200th day in orbit on a clandestine mission.
Known as Orbital Test Vehicle-5 (OTV-5), the latest mission began September 7, 2017 after it was launched into space atop a SpaceX Falcon 9 booster from NASA’s Kennedy Space Center in Cape Canaveral, Florida.
According to Air Force officials, one payload flying on OTV-5 is the Advanced Structurally Embedded Thermal Spreader, or ASETS-11, of the U.S. Air Force Research Laboratory (AFRL). This cargo is testing experimental electronics and oscillating heat pipes for long durations in the space environment. –space.com
The Air Force has not disclosed how long the unpiloted, reusable craft will remain in orbit, however experts have said it’s likely to land at the Kennedy Space Center’s Shuttle Landing Facility, where the OTV-4 mission landed on May 7, 2007 – a first for the program, as previous missions all ended with a tarmac touchdown at California’s Vandenberg Air Force Base.
“The X-37B has been and remains a technology demonstrator,” said Joan Johnson-Freese, a professor in the National Security Affairs Department at the Naval War College in Newport, Rhode Island.
“Given that most space technology is dual-use, with the ever-increasing sway toward warfare in space, it’s likely that the more militaristic uses of the space plane will be pursued more vigorously, and likely openly given the [presidential] administration’s proclivity toward chest thumping,” Johnson-Freese told Space.com.
Milestone Missions via Space.com
- Each X-37B mission has set a new flight-duration record for the program.
- OTV-1 began April 22, 2010, and concluded on Dec. 3, 2010, after 224 days in orbit.
- The second OTV mission began March 5, 2011, and concluded on June 16, 2012, after 468 days on orbit.
- OTV-3 chalked up nearly 675 days in orbit before finally coming down on Oct. 17, 2014.
- And OTV-4 conducted on-orbit experiments for 718 days during its mission, extending the total number of days spent in space for the OTV program to 2,085 days.
The Air Force Rapid Capabilities Office manages the X-37 project. According to Space.com it is used to perform “risk-reduction experimentation and concept-of-operations development for reusable space-vehicle technologies.”
The space drone has a payload bay about the size of a pickup-truck bed, which can be outfitted with a robotic arm. X-37B has a launch weight of 11,000 lbs. (4,990 kilograms) and is powered on orbit by gallium-arsenide solar cells with lithium-ion batteries.
The classified X-37B program “fleet” consists of two known reusable vehicles, both of which were built by Boeing. Looking like a miniature version of NASA’s now-retired space shuttle orbiter, the military space plane is 29 feet (8.8 meters) long and 9.6 feet (2.9 m) tall, with a wingspan of nearly 15 feet (4.6 m). –Space.com
The orbital path of the OTV-5 mission has puzzled experts, according to Toronto-based satellite analyst Ted Molczan.
“There were indications that OTV-5 went to a significantly higher-inclination orbit than previous OTV missions,” he told Space.com. “There was too little information to narrowly constrain a search.”
Molczan said he assisted in one fruitless search, but it was of the roughly 44-degree-inclination orbit implied by the OTV-5 launch’s “Notice to Airmen,” the routine report put out to warn any aircraft pilots who may be near the flight path.
“The final orbit may be more like 60 degrees,” he said. “If an object is not found within days or a few weeks of launch, then the trail goes cold and discovery depends on a chance sighting.”
- After Doubling US Debt In 8 Years, Yellen & Furman Fearmonger "A Debt Crisis Is Coming"
After doubling America’s national debt in the eight short years of President Obama’s reign – expanding benefits for all, and relying on a Federal Reserve with its knee-high jack boot firmly on the throat of interest-rates, thus supressing any derogatory signal among the every day noise – five former chairs of The White House Council of Economic Affairs turned up their hypocrisy dial to ’11’ in a stunning op-ed in The Washington Post tonight, warning of a debt crisis looming due to President Trump’s deficits…
A debt crisis is coming. But don’t blame entitlements.
The U.S. unemployment rate is down to 4.1 percent, and economic growth could well increase in 2018. Consumer and business confidence is high. What could go wrong?
A group of distinguished economists from the Hoover Institution, a public-policy think tank at Stanford University, identifies a serious problem. The federal budget deficit is on track to exceed $1 trillion next year and get worse over time. Eventually, ever-rising debt and deficits will cause interest rates to rise, and the portion of tax revenue needed to service the growing debt will take an increasing toll on the ability of government to provide for its citizens and to respond to recessions and emergencies.
None of that is in dispute. But the Hoover economists then go wrong by arguing that entitlements are the sole cause of the problem, while the budget-busting tax bill that was passed last year is described as a “good first step.”
Entitlement programs support older Americans and those with low incomes or disabilities. Program costs are growing largely because of the aging of the population. This demographic problem is faced by almost all advanced economies and cannot be solved by a vague call to cut “entitlements” – terminology that dehumanizes the value of these programs to millions of Americans.
The deficit, of course, reflects the gap between spending and revenue. It is dishonest to single out entitlements for blame. The federal budget was in surplus from 1998 through 2001, but large tax cuts and unfunded wars have been huge contributors to our current deficit problem. The primary reason the deficit in coming years will now be higher than had been expected is the reduction in tax revenue from last year’s tax cuts, not an increase in spending. This year, revenue is expected to fall below 17 percent of gross domestic product – the lowest it has been in the past 50 years with the exception of the aftermath of the past two recessions.
All of us have supported corporate tax reform. The statutory tax rate was too high, much higher than in other Organization for Economic Cooperation and Development economies. However, because of deductions and breaks in the tax code, the effective marginal tax rate was similar to the average among competitor economies. The right way to do reform was to follow the model of the bipartisan tax reform of 1986, when rates were lowered while deductions were eliminated.
Instead, the tax cuts passed last year actually added an amount to America’s long-run fiscal challenge that is roughly the same size as the preexisting shortfalls in Social Security and Medicare. The tax cuts are reducing revenue by an average of 1.1 percent of GDP over the next four years. The Hoover authors minimized the cost of the tax cuts by noting that if major provisions are allowed to expire on schedule — certainly an open question, given political realities — they would amount to “only” 0.4 percent of GDP. Even this magnitude exceeds the Medicare Trustees’ projections of a 0.3 percent of GDP shortfall in Medicare hospital insurance over the next 75 years.
Just as entitlements are not the primary cause of the recent jump in the deficit, they also should not be the sole solution. It is important to use the right wording: The main entitlement programs are Social Security, Medicare, veterans benefits and Medicaid. These widely popular programs are indeed large and projected to grow as a share of the economy, not because of increased generosity of benefits but because of the aging of the population and the increase in economywide health costs.
There is some room for additional spending reductions in these programs, but not to an extent large enough to solve the long-run debt problem. The Social Security program needs only modest reforms to restore its 75-year solvency, and these should include adjustments in both spending and revenue. Additional revenue is critical because Social Security has become even more vital as fewer and fewer people have defined-benefit pensions. Medicare has been a leader in bending the health-care cost curve. Reforms to payments and reformed benefit structures in Medicare could do more to hold down its future costs.
As we focus on the long-run fiscal situation, our goal should be to put the debt on a declining path as a share of the economy. That will require running smaller deficits in strong economic periods — such as the present — to offset the larger deficits that are needed in recessions to restore demand and avoid deeper crises. Last year’s Tax Cuts and Jobs Act turned that economic logic on its head. The economy was already at or close to full employment and did not need a boost. This year’s bipartisan spending agreement contributed further to the ill-timed stimulus. The Federal Reserve will have to act to make sure the economy does not overheat.
Several years ago, there was broad agreement that responding to the looming fiscal challenge required a balanced approach that combined increased revenue with reduced spending. Two bipartisan commissions, Simpson-Bowles and Domenici-Rivlin, proposed such approaches that called for tax reform to raise revenue as a percent of GDP and judicious spending cuts. Without necessarily agreeing with these specific plans, we believe a balanced approach is the correct one. Start with spending goals based on the priorities of the American people and then set tax policy to realize adequate revenue. The Hoover economists’ advocacy of paying for large tax cuts with entitlement reductions would take the United States in the wrong direction.
* * *
So to sum up – everything was awesome before Trump got here, with unemployment low, interest rates low, inflation low, stocks high, and having added more debt to the serfdom-bearing shoulders of future Americans in the last eight years than since the existence of the nation over 200 years ago… But now that The Fed is blindly hiking rates, normalizing its balance sheet and Washington is continuing down its spend-as-if-there’s-no-tomorrow path, suddenly these five disgustingly hypocritical ‘economists’ decide to cry foul over fiscal largesse… and, of course, right before CBO will dump a bucket of ice cold water over Trump’s budget.Speechless.
- Rockefellers Join Soros & Rothschilds In Cryptocurrency Investment Plans
Despite the collapse in cryptocurrency prices since the beginning of the year (bitcoin is down more than 60% and ethereum down more than 70% from their ATHs), more marquee investors have decided that now is the time to buy in.
Last week, we noted that George Soros had taken some time out from his battle of wills with Hungarian Prime Minister Viktor Orban to grant one of his underlings approval to begin trading in crypto. Adam Fisher – who oversees macro investing at New York-based Soros Fund Management – has reportedly received internal approval to trade virtual coins in the last few months, “though he has yet to make a wager.”
Soros’s involvement followed reports last year that the Rothschild family had waded into the space – first by purchasing bitcoin exposure via the Grayscale Bitcoin Trust.
Their involvement is a sign that regulators around the world might be relaxing their stance toward crypto, as one prominent crypto entrepreneur and investors pointed out
Rockefeller, Soros, and Rothschild money entering the cryptocurrency space….it sounds like regulations might be getting a bit more lax
— Charles Hoskinson (@IOHK_Charles) April 7, 2018
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Now, the latest bold-faced investor to unveil plans to invest in the space is the Rockefeller family (the descendants of Standard Oil founder John Rockefeller). CoinTelegraph reports that the family’s venture capital fund has partnered with CoinFund to invest in “cryptocurrency and Blockchain business innovation”.
The news triggered a jump in crypto prices…
Sending bitcoin back above $7,000….
* * *
Here’s more, courtesy of CoinTelegraph.
Venrock, the official venture capital arm of the Rockefeller family, has partnered with crypto investment group Coinfund to support cryptocurrency and Blockchain business innovation, Fortune reported April 6.
image courtesy of CoinTelegraph.
Coinfund has recently added token-based financial services platform Coinlist, a spinoff of startup connection website AngelList, to the number of projects that it backs. Coinfund is also known for backing chat messenger app Kik, which raised almost $100 mln in the Initial Coin Offering (ICO) of its Kin token last fall. Fortune notes that Venrock and Coinfund met through their mutual investment in the live video streaming app maker YouNow.
When asked about Bitcoin’s (BTC) recent failure to strongly stay above $7,000, Venrock partner David Pakman told Fortune that the price of “a single currency over the next day, week, month, year” is not what they thought about when deciding to partner with a crypto investment group:
“We’re really patient long term investors […] we’re wondering what happens over the next five to ten years. Can we have fundamental change to a number of different markets because of a disturbed ledger, a token economy that all participants can take part in?”
According to an April 6 blog post by Pakman, cryptocurrency and Blockchain’s most important innovation is their creation of “the possibility of building sustainable decentralized computing platforms, services and apps”, writing:
“It may finally be possible to build widely-distributed networks without centralized trust or control, and to allow user consensus to govern their future […] In this scenario, ‘commodity’ applications like messaging, social media and application infrastructure like file storage and compute become very much like public utilities — and they are owned and governed by their participants. For many of us, this is the mission behind crypto.”
When asked by Fortune about the potential for scams running ICOs, specifically mentioning the recent news of the Centra-related arrests, Pakman referred to the crypto ecosystem as a “wild space up and down the whole stack,” with ICOs as “certainly one of the most wild spaces of it all.”
Pakman added that he supports regulations of the crypto sphere in order to clear out the “bad actors,” but that one needs to be careful not to “throw the baby out with the bathwater here”.
Pakman also noted that decentralized systems could eventually be a competitor to traditional venture capital fundraising, which he referred to as “effectively a gatekeeper industry” that he would “actually like to see undone”, adding:
“I don’t believe that a small group of people should make the decisions about which projects can raise some money and get off the ground.”
Coinfund co-founder Jake Brukhman told Fortune that Coinfund will be “working closely with [Venrock] to help mentor, advise, and support teams in the space.”
Major traditional investor George Soros, who had previously referred to Bitcoin as a “bubble,” will also reportedly be investing in cryptocurrencies, through the Soros Fund Management. In mid-February, Soros’s investment fund become the number three shareholder in Overstock, a retail company that accepts Bitcoin as payment and whose CEO Patrick Byrne is widely known for his pro-crypto stance.
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