Posted originally on May 1, 2025 by Martin Armstrong
Washington state is multiplying taxes for mega corporations in a move to cover its widening budget deficit. The state is expected to face a $12 to $16 billion shortfall over the next four years, according to the Office of Financial Management. The deficit should come as no surprise as state spending has ballooned by 40% in the past four years alone.
Under HB 2081, the state’s Business and Occupation (B&O) tax will be revised to raise the “Advanced Computing Surcharge.” Corporations earning over $25 billion globally will see their tax rate spike from 1.22% to 7.5%, with the maximum payment expanding from $9 million to $75 million. More specifically, the state is looking to shake down big tech companies like Microsoft and Amazon to compensate for its excessive spending.
Companies earning over $5 million annually will face a tax hike from 1.75% to 2.1%. The state has also implemented a temporary 0.5% B&O surcharge from January 1, 20216 to December 31, 2030, for companies earning over $250 million in Washington taxable income.
The state requires more revenue, and targeting corporations is merely the beginning. Senate Bill 5814 will raise the state sales tax from 6.5% to 10.6%. Digital automated services were previously exempt from this tax, but beginning in October, tech companies will be required to pay. The state hopes to collect $2.9 billion from this measure alone.
Yet, the state still requires more revenue. Senate Bill 5813 will restructure the capital gains tax to create a new top tier for gains over $1 million. In addition to the 7% base tax, the state has implemented an additional 2.9% surtax. The state expects to generate $321.6 million from this additional fee.
Per usual, fees will be passed on to the consumers.
Naturally, the decision-makers are failing to address the problem—excessive spending. Tax revenue has already increased by 34% or $18 billion since 2019. Politicians passed a number of social programs without proper funding. The child care subsidy expansion passed in 2021, but it took four years to amass the $300 million required. State-funded pre-K expansion also passed in 2021, but the $214 million has not been fully paid. Washington’s tort liability payout account has been operating at a deficit for multiple years, requiring $1 billion to simply move out of the red. What about the Rainy-Day Fund? Democrats used the $2.3 billion revenue to pay for more social programs.
Washington implemented a freeze on non-essential spending in December. Some believe that the state needs to implement a wealth tax, as Democrat lawmakers seek every option to fix the deficit that does not include spending cuts.
Washington managed to spiral into a massive debt in a short amount of time. Governor Inslee approved of incorporating an additional $2 billion into the $69.8 billion operating budget back in March. Eight months later, the Office of Financial Management declared that there was a serious problem and the state could face a deficit of $10 to $12 billion, revising that figure to $16 billion a month later.
The state was operating at a $14 billion surplus three years ago before politicians ramped up their spending by 40%. State taxes have increased by 99% in the past decade, while state spending has risen by 114% in the same time period. It is always the responsibility of the people to pay for government’s fiscal mismanagement.
Posted originally on May 1, 2025 by Martin Armstrong
The Commerce Department’s Bureau of Economic Analysis (BEA) released its first estimate for US GDP in Q1, a 0.3% decline annually.
The decline was mainly due to a sharp 41% uptick in imports as they are subtracted when calculating the final GDP figure. Pharmaceutical goods, medicines and vitamins, computers and parts drove imports in the first quarter.
Government spending decreased significantly as well by 1.4%, with federal expenditures down 5.1%. National defense spending declined by 8%, while non-defense spending decreased by 1%. State and local government spending posted its slowest growth since Q2 of 2022 at 0.8%. Government-driven spending is one of the main components of GDP calculations, but a reduction in government-driven spending in an economy should be viewed positively.
There was a notable rise in business investment at 21.9% as capital is flowing to the US. This is a noteworthy difference, following a 5.6% decline in the fourth quarter of 2024. Nonresidential investment rose 9.8% in the first three months of the year, led by a 22.5% rise in equipment spending.
Consumer spending grew by 1.8%; services led spending with a 2.4% uptick, followed by goods at 0.5%. Personal savings as a percentage of income reached 4%, down from last year’s posting of 5.4%. Disposable personal income reached 2.7%.
ADP released its jobs report for April, anticipating a 62,000 uptick in private sector hirings. This should come as no surprise as thousands were laid off from their public sector positions. However, the figure is below estimates of 115,000 and sharply down from March’s 155,000 figure. “Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” said ADP chief economist Nela Richardson. “It can be difficult to make hiring decisions in such an environment.” The Labor Department’s nonfarm payroll report is expected to show a 130,000 uptick, well beneath March’s 228,000 posting.
The April 2025 Consumer Price Index (CPI) will be released on May 13, a week after the next Federal Open Market Committee meeting. March posted a core inflation rate of 2.8% on an annual basis, down from February’s 3.1% figure and the lowest noted since March 2021.
Trump’s tariff policy is not to blame for the current state of the economy. War, inflation, debt, poor government policy, and collapsing confidence predate Trump. The Fed’s policy is not to blame either as their policy is almost irrelevant in the grand scheme.
Socrates warned of a massive global shift in 2015 as the sovereign debt crisis cycle turned and public confidence began to decline. The computer identified 2020.05 (May 2020) as a major Economic Confidence Model (ECM) turning point, and needless to say, 2020 was certainly a turning point in every aspect of the global economy. The stagflation we see now began, globally, post-pandemic. Once confidence breaks, stagflation is guaranteed to follow.
The Federal Reserve is nearly done completing its revamp of its Washington, DC, headquarters with a price tag of $2.5 billion. The luxurious facility has come under intense scrutiny as many believe they are borrowing from public funds while already operating in a deficit. Yet, these funds will not be added to national debt calculations.
The Federal Reserve operates on a self-funding mechanism, allegedly, using revenue it generates from interest on government securities and other services such as payment processing. Yet, that interest is generated from public funds. However, the Federal Reserve does not need approval from Congress to finance internal costs as it manages to bypass the federal budget.
The national debt is calculated based on congressionally authorized borrowing. Since no Treasury securities were issued, these costs remain off-budget and outside final calculations. The Federal Reserve operated independently, and as such, it can build a massive new facility equipped with garden terraces, elaborate water sculptures, ceiling skylights, and a private elevator system to transport board members to the newly designed VIP dining suite.
There are several special lending programs budgeted through the Fed that will not be included in the national debt. For example, the central bank purchased $500 billion in short-term debt from local and state governments during COVID to push cash into the system. Loans provided through the Main Street Lending Program and the Money Market Mutual Fund Liquidity Facility (MMLF) are not factored. The Fed maintains some monetary policy tools absent of congressional approval, like discount window loans and overnight reverse repurchase agreements.
Foreign central banks may exchange their treasuries for dollars, which does not pull from public funds. The FedNow Instant Payment system for banks also operates independently, as does the Consumer Financial Protection Bureau (CFPB) that funds around $630 million annually.
The Fed has a $7.4 trillion asset portfolio that is not congressional appropriations. Any losses are considered deferred assets on the central bank’s balance sheet. Now, the Fed differs from other central banks, such as the Bank of Japan or the European Central Bank, which rely more on shareholder capital and government-backed reserves. The 12 regional Federal Reserve banks operate as quasi-private institutions with elected board members, whereas the ECB and BoJ operate as public entities.
The Fed returns around 90% of its net income to the US Treasury despite the current negative press. The new headquarters may be excessive, but it is paramount for the Fed to remain independent from the federal government. Politicians should not drive fiscal policy, as all confidence in the system would be lost. A central bank like Turkey’s, which is completely politically controlled, faces ongoing currency crises and inflation because politicians only want to patch up the short term to ensure they win the next election. Congress should have no say in the Fed’s budget – period.
Posted originally on Apr 29, 2025 by Martin Armstrong
German Finance Minister Jörg Kukies is urging the European Union to force nations to drastically increase aid to Ukraine under an emergency clause. This emergency clause acts as a loophole that could allow Brussels to surpass defense investment parameters.
Kukies penned a letter on April 24, 2025, to Brussels to state that the “changing environment in Ukraine “requires a significant build-up of defense capabilities with a major impact on its public finances.” This clause would force EU members to spend up to 1.5% of GDP on Ukraine for the next four years. Kukies also would like the European Commission to consider expanding what constitute as “defense” spending, as it “adequately reflects the multiple threats to security in Europe” and considering “in particular dual-use expenditure.”
Incoming chancellor Friedrich Merz has already agreed to spend €1 trillion on Ukraine’s military and infrastructure. Germany is not “leading” Europe as many believe. Rather, it is dragging the entire continent into the grave. This is not about helping Ukraine. This is about creating the next perpetual conflict to justify more government power, more taxation, and the further erosion of individual liberty.
The German government believes it has the funds to shell out. Yet, other EU members have not masked their hesitancy to sink into debt at the expense of Ukraine. When Foreign Policy Chief Neocon Kaja Kallas attempted to bend the bloc’s hand to increase spending, a few southern European nations like Italy and Spain shouted that they did not want to excessively increase their debt. Spanish Finance Minister Carlos Cuerpo touched on a point that caused Brussels to shudder. If Europe believes it is acting as a solid consolatory force, then why not consolidate the debt?
Spain proposed a temporary special purpose vehicle (SPV) that would restructure defense debt from national balance sheets by issuing joint European debts through bonds or a similar vehicle. EU and non-EU nations could fund the SPV with a shared repayment obligation. Brussels is still considering the proposal, but rest assured that the top economies in the EU will not want to share the debt obligation. The entire premise of the euro robbed lower GDP nations through a failure to consolidate debt, and nations like Germany refused to forgive their multiplied debt after they adopted the euro because every nation will put itself first. It was a fantasy to believe that a continent could erase its borders and operate as one.
The computer has warned that Europe is at risk of a depression. The EU is collapsing under its own weight. The unelected authoritarian regime in the EU is working to destabilize Europe to fight Russia, and member nations must stand idle and watch their nations spiral into debt to spur on a war that was never their battle to fight.
Posted originally on Apr 24, 2025 by Martin Armstrong
NATO has heightened its alert level, placing fighter jets in the “highest state of readiness” in response to Russia’s aggressive strikes in Western Ukraine. The Armed Forces Operational Command confirmed that allied air forces have commenced patrols over Polish airspace near the Ukrainian border. Zelensky’s refusal to accept any peace deal demonstrates he is taking orders from NATO and the American Neocons, who, my sources say, are operating now out of Paris and London to ensure this war does not end. President Donald Trump on Wednesday lashed out at Ukraine’s president, saying Zelenskyy is prolonging the “killing field” after pushing back on ceding Crimea to Russia as part of a potential peace plan.
The people living in Crimea are ethnic Russians, not Ukrainians. The total population of Crimea is approximately 2 million people, of which 12-15% are Tatars, descendants of the Mongol invasion of 1240. There is no ethnic Ukrainian population living there. This is purely a territorial grab for war with Russia and nothing more. The Ukrainians have a history of ethnic cleansing and hatred of other races. They even horrified the German Nazis by their cruelty. In this photo, they executed a woman for being Jewish. They buried her child alive to save bullets.
The ONLY way to stop this is for Putin to drop the leaflets on Kiev, tell them to vacate Ukraine, and you have 30 days before it utterly destroys Kiev like the Romans did to Carthage to end the Punic Wars. The Romans destroyed Carthage in 146 BC at the end of the Third Punic War (149–146 BCE), essentially to eliminate Carthage as a political, military, and economic rival and to prevent future conflicts. A combination of fear, vengeance, and strategic calculation drove this action.
After the Second Punic War (218–201 BCE), in which Hannibal nearly defeated Rome, Carthage was reduced to a weakened state but began recovering economically. Many Romans, like the statesman Cato the Elder, feared Carthage might regain power and threaten Rome again. His famous refrain, “Carthago delenda est” (“Carthage must be destroyed”), reflected this paranoia.
Rome arguably provoked the Third Punic War. Carthage had complied with earlier treaties, but Rome exploited a minor conflict with Numidia (a Roman ally) to justify invasion. Hardliners in the Roman Senate, eager for glory and wealth, pushed for total war. The annihilation of Carthage—burning the city, killing or enslaving its population, and symbolically salting the earth (though this detail may be later legend)—sent a brutal message to other Mediterranean powers about Rome’s ruthlessness in crushing enemies. Carthage’s territory became the Roman province of Africa, enriching Rome with its resources. The destruction marked the end of Carthaginian civilization and secured Rome’s hegemony over the western Mediterranean.
In this instance, it is NATO and the Neocons who have provoked this war with Russia out of vengeance for once being communist. They installed the interim UNELECTED president Oleksandr Turchynov (born 1964) and ordered him to attack the Donbas instantly, beginning the war. He called them terrorists because they wanted separation after Ukrainians massacred Russians in Odessa. There will NEVER be a genuine peace with Ukraine because NATO controls their leadership, and Trump has to come to grips with this.
The only possible way to end this war is the total destruction of Ukraine. Drop the leaflets as the US did to Japan, telling the people to leave. Europe will threaten nuclear war if they do that, and Russia has to target every major city in Europe. Then and ONLY then will the people of Europe rise up against their brain-dead leaders who take orders from NATO and the Neocons and stop this insanity. The French Senate just voted 372 to 99 in favor of war with Russia. Europe will be destroyed in the process if NATO and Neocons are not stopped.
The whole issue of hating Jews was a conspiracy that Communism was a Jewish creation because Lenin, Trotsky, and Marx were all Jewish. This is why Soros and Zelensky both pretended to be Christians to escape the hatred of Jews and the ethnic cleansing, all based on the idea that Communism was created by Jews, when it began in France as the Commune Movement.
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