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
Russia-North Korean relations are stronger than ever. Russia has begun construction on a 4.7-kilometer bridge across the Tumen River that will connect the two nations.
Russia’s Prime Minister, Mikhail Mishustin, announced that the project will facilitate trade and tourism and reduce transportation costs. “This is truly a milestone for Russian-Korean relations,” Mishustin said during a video meeting with Pak Thae-song, chairman of North Korea’s Supreme People’s Assembly. “The significance goes far beyond just an engineering task … it symbolises our common desire to strengthen friendly, good-neighbourly relations and increase interregional cooperation,” he added. Mishustin also stated that the project will help “entrepreneurs” to significantly increase the number of imported/exported goods. The two nations face the harshest sanctions in the world, and North Korea, especially, is in desperate need of food and basic goods.
Tourism will be for the Russians, as North Koreans may not leave their nation without government approval. Leaving North Korea is seen as “treachery against the nation” and punishable by death. It is extremely rare for a citizen to receive clearance to travel, and permits are typically only granted to diplomats, athletes, or the political elite; even then, they are closely monitored. The new bridge will feature checkpoints to prevent anyone from attempting to flee.
“There are many sportspeople and children going there,” Oleg Kozhemyako, governor of the Primorye Region, said, without further comment. There are reports that North Korea hosted summer camps for children of Russian soldiers who were killed during the war in Ukraine. It remains to be seen whether Russian families will permit their children to travel to North Korea for summer holiday.
Russia and North Korea, two countries with nuclear capabilities, have strengthened their alliance and this bridge is symbolic of their desire to continue relations. Some speculate that North Korean troops may even be permitted to join the Red Square parade on May 9 to commemorate the end of World War II. South Korea’s intelligence agencies have been monitoring the construction of the bridge.
Sochi, the company in charge of construction, believes the project will be complete by 2026.
The British Neocons, i.e., Boris Johnson, for whatever reason, have decided to wage war against Russia from the outset. ” It has been pathetic… Let’s face it: We’re waging a proxy war but not giving our proxies the ability to do the job. For years now, we’ve been allowing them to fight with one hand tied behind their backs, and it has been cruel.”
Also in November 2024, when Johnson admits Britain is at war with Russia, the head of MI6 (SIS) in Britain, Sir Richard Moore, tells the world that Vladimir Putin will not stop if he wins the war against Ukraine. He tells the press that the world is at its most dangerous point in 40 years. He naturally blames Putin and accuses Russia of waging a “staggeringly reckless campaign” of sabotage in Europe to undermine support for Ukraine.
Yet, Sir Richard Moore also said that British Secret Intelligence Service agents have been involved in covert operations against Russia on behalf of Ukraine. Moore said:
“We cherish our heritage of covert action which we keep alive today in helping Ukraine resist the Russian invasion.”
The New York Times, in a piece “The Secret History of the War in Ukraine,” reported that the CIA also ran the war in Ukraine out of the United States at Wiesbaden, Germany. There was no way Ukraine could sink Russian ships or know where to target without satellite targeting information. As the NYT wrote:
“Longstanding policy barred the C.I.A. from providing intelligence on targets on Russian soil. So the administration would let the C.I.A. request “variances,” carve-outs authorizing the spy agency to support strikes inside Russia to achieve specific objectives.”
As the NYT wrote, Lloyd Austin was the “godfather” and “architect” of this covert operation to run the war for Ukraine from Wiesbaden, Germany.
Russia has long known about the role of British and American intelligence operatives in Ukraine. Moscow’s ambassador to the UN, Vassily Nebenzia, told the Security Council that “Western intelligence agencies, primarily the British MI6, have systematically prepared Ukrainian sabotage and reconnaissance groups to organize provocations at nuclear power plants in Russia.” Of course, nobody listens to Russia.
Trump told reporters as he traveled back to the White House on Sunday after Pope Francis’ funeral, the Times reported. “I want [Russian President Vladimir Putin] to stop shooting, sit down and sign a deal.” Newsweek claimed that unnamed European and Ukrainian officials told the Financial Times that Trump is looking for an excuse to walk away if he can point to even a small point of progress in negotiations as a reason to say his job is done. Newsweek claimed that these statements point to the Trump administration’s impatience about what it says is the slow pace of negotiations. Trump has said he is getting Frustrated and if there is no deal, he will withdraw from any peace negotiations. Quite frankly, with the admissions from Britain, Putin cannot possibly sign a peace deal with Ukraine when they are only a proxy for NATO and the EU/Britain.
As the Epoch Times wrote, the end of the Russia–Ukraine war is not just around the corner, and negotiators still face several complexities, according to Kremlin spokesman Dmitry Peskov said on April 30. This is indeed far more complicated.
Trump has shut down Wiesbaden, Germany, providing the targeting intelligence for Ukraine that was set up by the Biden Administration to wage war against Russia, all under the pretense that this was just a war with Ukraine.
This has been a NATO/Neocon War Against Russia, and the Ukrainians have just been the sacrificial lamb on the Neocon altar of endless wars.
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.
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