There are work-arounds the U.S. can use to fund affordable housing, drought responses, and other urgently-needed infrastructure that was left out of the two recent spending bills.
Congress has passed two major infrastructure bills in the last year, but imminent needs remain. The 2021 Bipartisan Infrastructure Law chiefly focused on conventional highway programs, and the Inflation Reduction Act of 2022 (IRA) mainly centered on energy security and combating climate change. According to the American Society of Civil Engineers (ASCE), over $2 trillion in much-needed infrastructure is still unfunded, including projects to address drought, affordable housing, high-speed rail, and power transmission lines. By 2039, per the ASCE, continued underinvestment at current rates will cost $10 trillion in cumulative lost GDP, more than 3 million jobs in that year, and $2.24 trillion in exports over the next 20 years.
Particularly urgent today is infrastructure to counteract the record-breaking drought in the U.S. Southwest, where 50% of the nation’s food supply is grown. Subsidies for such things as the purchase of electric vehicles, featured in the IRA, will pad the coffers of the industries lobbying for them but will not get water to our parched farmlands any time soon. More direct action is needed. But as noted by Todd Tucker in a Roosevelt Institute article, “Today, a gridlocked and austerity-minded Congress balks at appropriating sufficient money to ensure emergency readiness. … [T]he US system of government’s numerous veto points make emergency response harder than under parliamentary or authoritarian systems.”
Continue readingFiled under: Ellen Brown Articles/Commentary | Tagged: AFFORDABLE HOUSING, BIPARTISAN INFRASTRUCTURE LAW 2021, CHINA INFRASTRUCTURE, CHINA POLICY BANKS, DROUGHT, Ellen Brown, GREAT DEPRESSION, INFLATION REDUCTION ACT OF 2022, IRA BILL, public banking, Reconstruction Finance Corporation, RFC, US BONDS, US DROUGHT, US INFRASTRUCTURE | 5 Comments »
WEB OF DEBT BLOG 
What Will Happen When Banks Go Bust? Bank Runs, Bail-Ins and Systemic Risk
Financial podcasts have been featuring ominous headlines lately along the lines of “Your Bank Can Legally Seize Your Money” and “Banks Can STEAL Your Money?! Here’s How!” The reference is to “bail-ins:” the provision under the 2010 Dodd-Frank Act allowing Systemically Important Financial Institutions (SIFIs, basically the biggest banks) to bail in or expropriate their creditors’ money in the event of insolvency. The problem is that depositors are classed as “creditors.” So how big is the risk to your deposit account? Part I of this two part article will review the bail-in issue. Part II will look at the derivatives risk that could trigger the next global financial crisis.
From Bailouts to Bail-Ins
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 states in its preamble that it will “protect the American taxpayer by ending bailouts.” But it does this under Title II by imposing the losses of insolvent financial companies on their common and preferred stockholders, debtholders, and other unsecured creditors, through an “orderly resolution” plan known as a “bail-in.”
The point of an orderly resolution under the Act is not to make depositors and other creditors whole. It is to prevent a systemwide disorderly resolution of the sort that followed the Lehman Brothers bankruptcy in 2008. Under the old liquidation rules, an insolvent bank was actually “liquidated”—its assets were sold off to repay depositors and creditors.
Continue reading →Filed under: Ellen Brown Articles/Commentary | Tagged: bail-in, bailout, Bank of North Dakota, bank runs, Dodd-Frank, Ellen Brown, FDIC, Federal Reserve, public banking, quantitative easing, systemic risk | 23 Comments »