Free Republic

In Ancient Greece around 600 BC the commoners had fallen into heavy debt. First they mortgaged their land, and delivered the majority of their crops to the lender. But after a bad harvest, the farmers needed to borrow more in order to afford another planting. With nothing left they used their freedom, and the freedom of their family as collateral. Many were sold into debt slavery after defaulting on this second loan. That’s when a poor aristocrat, Solon, was elected ruler by appealing to both the landowners and the heavily indebted commoners. He canceled the commoners’ debts and ended debt...

Since 1985, the first year for which the Census Bureau has posted this nation's bilateral merchandise trade deficits on its website, the United States has accumulated $5.5 trillion in trade deficits with China. No other nation comes close. In 2019, America's seven top trading partners -- when measured by the total dollar value of the bilateral trade in goods -- were Mexico ($614.5 billion), Canada ($612.4 billion), China ($558.9 billion), Japan ($218.3 billion), Germany ($187.8 billion), South Korea ($134.4 billion) and the United Kingdom ($132.3 billion). By far, however, the least balanced relationship -- both last year and in recent...

The coronavirus outbreak has already taken a great toll on the Chinese economy, with all headline readings pointing towards a record slowdown in growth during the first two months of the year. But there is an even greater danger for what was once the world’s fastest-growing major economy: that Covid-19 will become the catalyst that will bring its many long-simmering problems to the boil. At the centre of these problems is a rising systemic risk in its banking and financial systems caused by a high level of debt accrued over the past decade. The outbreak could not have occurred at...

Who has taken the economic risk to loan money to cities and states? (Bondholders) Who took the risk of working for a city or state with the promise of an unrealistic pension? (State and municipal employees) Who is going to pay for underfunded state and municipal pensions, overstaffed state governments and crazy governmental expenditures (think bullet train in California)? Which citizens elected city and state officials who approved and then underfunded pensions, overstaffed governments and approved crazy governmental expenses? Which of those governmental agencies were 100 percent unprepared for any emergency? These are rhetorical questions. The financial costs associated with...

China has often been accused of luring the poor African countries in its debt-trap by providing them loans for much-needed infrastructure projects and then control them when they fail to pay off their debts. Tanzania President John Magufuli has cancelled a Chinese loan worth $10 billion signed by his predecessor Jakaya Kikwete to construct a port at Mbegani creek in Bagamoyo over terms and conditions that, he said, beat the logic. Magufuli said that the terms of the Chinese loan agreement could only be accepted by a drunken man. His predecessor, Jakaya Kikwete had signed the deal with Chinese...

The president of the State Senate asked for $40 billion to help the pension system, fund unemployment insurance and aid hospitals and cities. Illinois needs more than $40 billion in relief from the federal government because of the coronavirus pandemic — including $10 billion to help bail out its beleaguered pension system, according to a letter the Illinois Senate president sent to members of Congress. The letter, sent this week by State Senator Don Harmon, also seeks a $15 billion grant to “stabilize the state’s budget,” $9.6 billion in direct aid to Illinois’s cities, $6 billion for the state’s unemployment...

Under the CARES Act, Congress has invited millions of Americans to stop paying their mortgages. The impact of this massive unfunded mandate is that the U.S. financial system is headed for a potential default when the cash flow expected from millions of Americans does not arrive.

Cinemark is launching an offering of $250 million in senior secured notes. The theater chain said the debt securities will be used for “general corporate purposes,” which include enhancing its liquidity at a time when cinemas have been closed indefinitely due to the coronavirus. Cinemark, which is the third largest exhibitor, said the debt will be secured by a first-priority lien on its leases. The debt sale comes as the exhibition sector is in free fall. It's unclear when coronavirus will have dissipated enough for cinemas to reopen. Studios have pushed many of their upcoming releases back until later in...

On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds. Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting. The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them. Two of the popular junk bond ETFs, iShares iBoxx High Yield Corporate Bond ETF (symbol HYG)...

Illinois’ financial outlook was changed from ‘stable’ to ‘negative’ by two major ratings firms, raising the risk the state’s credit rating will formally fall to non-investment grade status.. ... the state is actually paying higher interest on its debt today than it was in June 2017, according to Crain’s Chicago Business. When investors demand higher interest it generally reflects a higher risk that borrowers will default. Illinois was the least prepared to weather a recession heading into the coronavirus crisis, with only about 15 minutes of state spending saved in a rainy day fund. Lower credit ratings mean investors will...

The last time a serious economic downturn hit in 2008, Evan Schade was in high school and the crisis seemed like a news event that happened to other people. This time, as the coronavirus has brought the economy to its knees, it has become a personal affair. When nonessential businesses were closed last month in Kansas City, Missouri, where he lives, Schade, 26, lost his job at a carpet store and almost all of the shifts in his second job at a coffee shop. His girlfriend, Kaitlyn Gardner, 23, was laid off from a different coffee shop. The money they...

Speaking regarding the Coronavirus crisis, Governor Newsom of California stated: "We see this as an opportunity to reshape the way we do business and how we govern." The Governor of California best first find himself an expert in miniaturization. California’s self-vaunted fiscal health has been a public charade for years and now with the Coronavirus will be fully exposed as nothing less than a Zombie nightmare. The size and scope of California’s governmental expenditures is not sustainable. The governor best concern himself with the State of California’s wallet before trying to concern himself with reshaping how we govern. U.S. News...

We’re living in truly extraordinary times — and no, I’m not talking about Netflix’s Tiger King documentary. I’m referring to the unprecedented actions taken by the Federal Reserve and national government to deal with the severe economic consequences of policymakers’ decision to shut down much of the U.S. economy to keep people safe from coronavirus. Over the past several weeks, the Fed has started to implement its plan to “print” trillions of dollars to bolster credit markets, and Congress and the Trump administration recently signed into law a gargantuan $2 trillion stimulus package. Even more incredibly, President Trump is now...

After the tragedy of war The Marshall Plan rebuilt economies. American wealth, generosity and hard work made it possible. Now before tragedy strikes and before we know what the damage will be, around the world we are stopping work and spending money. And we call it war. Against whom? Ourselves? https://freedom-demokrasi-and-civilised-humanity.com/2020/04/03/the-marshall-plan/

President Trump on Tuesday encouraged Congress to pass a $2 trillion infrastructure bill as the next piece of legislation to boost the economy amid the coronavirus pandemic. "With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill," Trump tweeted. "It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country!" Trump last week signed into law a $2 trillion economic relief package targeting small businesses and workers impacted by the fallout of the virus....

In dealing with the needs of people hurt by the coronavirus crisis, the state of Indiana has a notable advantage: a rainy day fund that holds more than $2 billion. Too bad Illinois was not so farsighted. Its Budget Stabilization Fund has only $58,655. That’s enough to cover the state government’s normal expenses for about 30 seconds. Indiana’s is enough to cover more than a month. This is not a new problem for Illinois. For years, it had nothing in reserve. One of Gov. J.B. Pritzker’s deputy governors, Dan Hynes, spent years as comptroller trying to convince lawmakers to set...

According to the U.S. Treasury, as of February 29, 2020, there was $16.9 trillion in marketable U.S. Treasury securities outstanding. Of that amount, at the end of February, the Federal Reserve held $2.47 trillion or 14.6 percent – making it, by far, the largest single holder of U.S. Treasuries anywhere in the world. ...But exactly how can a so-called “free market” function smoothly if the country’s own central bank is cornering the market. Salomon Brothers paid a $290 million fine and came close to getting slapped with criminal charges by the U.S. Department of Justice in 1992 for manipulating prices...

The COVID-19 pandemic can be used to illustrate two problems that are both more destructive than the virus. The problems relate to how Americans view the role of government in their lives and to the belief that government money can always fix problems. .... We are on the Titanic, headed for the debt iceberg. In brief moments of clear vision, we see the iceberg and know we must change course to avoid disaster. But a self-imposed fog allows us to pretend things are fine. Do not look away. Look directly at this problem. It's real. Things that are unsustainable cannot...

The CARES Act, the $2 trillion coronavirus emergency relief bill that serves as Phase Three of Congress's coronavirus relief efforts, has passed the House of Representatives. It is the largest stimulus package in U.S. history and aims to provide funding for hospitals, and targeted relief for small businesses. The successful vote comes after hours of cantankerous debate, in which one unhinged Democratic representative was ruled " out of order " on the House floor. Once the measure finally passed, the entire House erupted - in a positive way. Lisa Desjardins ✔@LisaDNews WOW and just like that, the motion is adopted....

The COVID-19 pandemic can be used to illustrate two problems that are both more destructive than the virus. The problems relate to how Americans view the role of government in their lives and to the belief that government money can always fix problems. Let's look at the money issue first. The immediate reaction of our government to the virus threat was to spend massive amounts of money. The latest news is that politicians plan to "boost" the economy with nearly two trillion dollars in spending and loans. "The package is coming in at about 10% of GDP. It's very large,"...