Zerohedge

Via The Libertarian Institute

The US kicked off its largest annual military drills alongside the Philippines days ago this week, simulating a full-on war with China. A total of 17,000 troops from 20 countries participated in the drills, dubbed Balikatan 2025, including 9,000 American soldiers and 5,000 Filipino servicemen.

US Marine Corps Forces Pacific commander Lt. Gen. James Glynn said this year’s drills “will showcase a full battle test, the purposeful integration of real world security situations relevant to the region with live, virtual and constructive training opportunities that will give the Philippines and the US a collective opportunity to demonstrate capabilities across all domains, across all services and all forces.”

A statement from the Philippine military likewise said that the exercises would simulate a “full-scale battle scenario.” Many nations sent observers to the Philippines for the drills. For the first time, Japanese soldiers were full participants in the war games.

General Romeo Brawner, chief of the Armed Forces of the Philippines, noted that Balikatan would take place in the northern Philippines, near the South China Sea and Taiwan. “Across the vibrant expanse of Luzon, Palawan, the Visayas and Mindanao, we will assess our readiness in all domains,” he said.

The South China Sea and Taiwan are flashpoints in a potential conflict between the US and China, which sees the island as part of its own sovereign territory.

A press release from the US Navy explained that the war games were proof that Washington would honor its defense treaty with Manila. Balikatan is a “testament to the ironclad alliance and enduring friendship between the Philippines and the United States,” it said.

Chinese and Philippine vessels have collided around disputed rocks and reefs in the South China Sea on several occasions in recent years. While the incidents have not led to direct hostilities, Washington often restates its pledge to go to war on Manila’s behalf as a warning to Beijing not to attack the Philippines.

Along with additional participants in the drills, Balikatan 2025 will feature integrated air and missile defense. This includes one of the first live-fire tests of the Marine Air Defense Integrated System (MADIS), a short-range anti-drone platform.

EXERCISE BALIKATAN | Division Tactics Drill Boosts Maritime Interoperability in Balikatan 2025

Naval forces from the Philippines and the United States successfully conducted a Division Tactics (DIVTACS) drill on 26 April 2025, 21 nautical miles west off the coast of San Felipe,… pic.twitter.com/qqbyjDLdtL

— Armed Forces of the Philippines (@TeamAFP) April 26, 2025

During Balikatan 2024, the US deployed the Typhon launcher – a covert system that is concealed in a 40-foot shipping container and fires Tomahawk and SM-6 missiles – to the Philippines. In a major provocation to Beijing, Washington kept the system in the country’s north, where it was capable of striking Taiwan or even mainland China. A Typhon launcher will be deployed again for this year’s Balikatan.

Authored by Naveen Athrappully via The Epoch Times,

U.S. Secretary of Labor Lori Chavez-DeRemer warned states of losing federal funding if they fail to comply with President Donald Trump’s directives on rewarding illegal immigrants with tax dollars, according to an April 25 statement issued by the Department of Labor.

“Our nation’s unemployment benefits exist solely for workers who are eligible to receive them,” Chavez-DeRemer wrote in a letter addressed to state governors.

“To qualify for unemployment, one must be able and available to work, actively seeking work, and be legally authorized to accept employment in the United States. Unemployment benefits are not a handout for those in our country illegally.”

The secretary reminded all states that failing to fulfill existing legal obligations will result in the loss of federal funding through the Title III UI administrative grant.

 

The warning is pursuant to presidential memorandum, “Preventing Illegal Aliens from Obtaining Social Security Act Benefits,” and executive order 14218, “Ending Taxpayer Subsidization of Open Borders.”

Chavez-DeRemer also reminded states of an earlier communication by Department of Homeland Security (DHS) Secretary Kristi Noem, based on which, states can access the DHS immigration database called the Systematic Alien Verification for Entitlements (SAVE), at no cost and use it to verify the immigration status of benefit claimants.

This is a “critical tool” to ensure “illegal immigrants do not access our nation’s unemployment benefits,” said the labor secretary.

“As a result of this change, I instructed the Employment and Training Administration (ETA) to send a letter to all State Unemployment Insurance Administrators urging them to immediately start using SAVE for every initial and continued claim filed by an individual who indicates that they are not a U.S. citizen,” he said.

The SAVE database is aimed at helping agencies at federal, state, local, and tribal levels to confirm the immigration status and citizenship of individuals before issuing benefits.

A presidential memorandum signed on April 15 directed multiple federal agencies to take steps to prevent ineligible people, such as illegal immigrants, from receiving social security benefits.

An executive order issued on Feb. 19 asked agencies and departments to take action to ensure that “no taxpayer-funded benefits go to unqualified aliens” and to “prevent taxpayer resources from acting as a magnet and fueling illegal immigration to the United States.”

According to a Department of Government Efficiency finding released earlier this month, 6,300 illegal immigrants on the terror watchlist had been receiving Medicaid and unemployment insurance.

The Trump administration’s immigration enforcement efforts have been met with challenges.

On April 24, a federal judge issued an order blocking the administration from stripping federal taxpayer funding for cities that have adopted “sanctuary” policies with regard to illegal immigrants.

State and local governments with sanctuary policies block or restrict local officials from enforcing federal laws such as those related to immigration.

The lawsuit was filed by over a dozen cities that would be affected by the cancellation of federal funding for “sanctuary” cities.

In his order, the judge said the administration’s attempt amounts to a violation of the Constitution’s separation of powers principles and banned the government from any further funding cuts.

Meanwhile, the Trump administration is looking to prevent illegal immigrants from accessing the Supplemental Nutrition Assistance Program (SNAP) or food stamps.

On April 24, the Department of Agriculture asked states to take steps to this effect.

States were asked to check the identities of people who apply for SNAP, collect their social security numbers, and verify their legal status in the United States.

Harmeet Dhillon – Trump’s hand-picked choice to lead the DOJ’s Civil Rights Division, has been taking a wrecking ball to the woke government entity – forcing out ‘a majority of career managers and implementing new priorities’ that have radically altered its mandate, NBC News‘ swamp scribe Ken Dilanian reports.

“It’s been a complete bloodbath,” one senior DOJ lawyer told Dilanian. Other sources said that over a dozen senior lawyers – “many with decades of experience working under presidents of both parties,” have been reassigned, while others have resigned in frustration after they were shuffled around.

Dhillon kicked the hornet’s nest last week – issuing a series of memos outlining the shifting priorities, which include (gasp!) “Keeping Men out of Women’s Sports,” and “Ending Radical Indoctrination in K-12 Schooling.”

“This is a 180 shift from the division’s traditional mission,” one former senior official said – declining to be named “in fear of retaliation.”

“These documents appear to have been created in a vacuum completely divorced from reality,” the former official continued. “The division can only enforce statutes that have been passed by Congress, and these orders seem to contemplate division attorneys’ executing on work that fundamentally departs from the division’s long-standing mission.”

Translation:

Dhillon, meanwhile, said the changes were no different than what happens anytime there’s a change in administration, along with a quest for efficiency.

“Each new administration has its own priorities, and allocates resources accordingly,” said Dhillon. “The Trump administration is no different. When I assumed my duties as Assistant Attorney General, I learned that certain sections in Civil Rights had substantial existing caseloads and backlogs, and that formed the basis of temporary details to assist those sections in getting, and staying, caught up.”

10 ‘current and former officials’ in the Civil Rights Division told NBC News that several division chiefs have been transferred to roles unrelated to their legal backgrounds, including handling complaints, as well as the office that handles public requests (lol). So, customer service.

“Every presidential administration has its own policy priorities,” said former employee Stacey Young, who spent 18 years in the division before resigning in January, “but I don’t think there’s any precedent for an administration almost completely refocusing the civil rights division’s enforcement priorities the way this one has.”

So sad.

Authored by David Stockman via InternationalMan.com,

The true scandal of current American fiscal governance needs be commented on. Or, better still, hammered upon good and hard.

To wit, the American electorate apparently doesn’t give a shit about runaway government spending because as a practical matter the overwhelming share of voters don’t pay the taxes to fund it. Aside from social insurance taxes, which most payroll taxpayers still believe to be a premium for a government-sponsored retirement annuity, the bottom 90% of households fund only a tiny fraction of Federal spending.

That’s right. The bottom 145 million US income tax filers (out of 161 million total filers) currently pay just $500 billion in Federal income taxes. That’s barely $3,500 per return and even then approximately 50 million of these returns owe zero taxes or actually get tax credit refunds for taxes they haven’t paid!

In the grand scheme of things, therefore, direct tax payments by the bottom 90% of income tax filers amounted to only 12% of Federal spending in FY 2024 outside of social insurance trust funds. To wit, Federal spending ex-social insurance was $4.82 trillion in FY 2024 and upwards of $4.3 trillion of this was paid for by the top 10% of income tax payers, corporations, minor excise and import duty payers and borrowing—of which there was $1.8 trillion of the latter in FY 2024.

Needless to say, the top 10% got soaked good and hard, paying $1.538 trillion of Federal income taxes and as a practical matter nearly the entirety of the $530 billion corporate income tax, which in today’s globally competitive world gets mainly pushed back to shareholders. In effect, $2.1 trillion or 43% of Federal spending outside of social insurance is paid for by the top 10%.

Needless to say, that’s just plain unfair and economically counter-productive, too. The current marginal rate for top bracket taxpayers is 40.8% when you include the Medicare surcharge and the so-called NIIT  (net investment income tax). That’s already extortionate because in a free society there is no way that the government should grab 40% of anyone’s income—especially since that’s only the Federal take, which can easily grow to 50% after state and local income and property taxes.

Moreover, when the TCJA act of 2017 expires at year-end 2025, the top marginal rate will jump to truly confiscatory rate of 43.4%, and well beyond 50% in most states after state and local levies are layered on.

In short, America desperately needs to raise more revenues to fund even a downsized government after the DOGE treatment. But the income tax is more than tapped out, and 90% of the public is getting a hall pass on the latter.

Accordingly, what needs to happen is a sweeping reform, which would shift the Federal revenue base overwhelmingly to consumption and sales tax levies. That would ensure that the economic damage is limited and that 100% of the voting public would have skin in the game and feel the pain of spending via commensurate tax extractions. Then they might well demand fiscal sanity from their elected representatives in a manner that rarely occurs under the current defective fiscal regime.

We will elaborate more on the needed sweeping tax base reform in Part 2, but suffice it here to say that not only is the current Federal income tax grossly unfair to the productive classes and tapped out as a practical matter of revenue generation, but it is also unadministratable. Accordingly, more than half of the massive 100,000 man IRS bureaucracy could be eliminated even without a sales/consumption tax replacement, while upwards of 90% could be eliminated if the income tax were mainly substituted by a sales tax.

Needless to say, we are not talking about just bureaucratic nannies and meddlers in the case of the current 83,000 IRS employees—-a figure which is heading for 102,000 by the end of the decade under the still unrepealed Biden revenue grab. In the ranks of what amounts to a small city’s worth of Federal bureaucrats are also a goodly phalanx of tax cops, gumshoes, enforcement lawyers and tax filing proctologists.

So the question recurs: What has generated this massive bureaucracy in the first place, and what fundamental policy shifts are needed to cut the IRS headcount by 50% (42,00 jobs) and upwards of $5 billion of compensation and other operating costs?

The answer starts with calling the IRS’ bluff.  When you look at the actual tax filing data it is damn evident that the Deep State bureaucrats are faking mightily when it comes to their massive staffing demands. We discovered the scam way back in our OMB days while jousting with the Treasury Department over the sacred cows in its budget. But nothing is different 40-years later—so here’s the smoking gun that points the way.

In the most recent complete tax-year (2022) there were 161.336 million individual income tax returns filed, which reported $14.83 trillion of Adjusted Gross Income (AGI). But fully 146.045 million of those filings, which reported $10.025 trillion in AGI, did not claim any itemized deductions.

Moreover, among these non-itemizers about 97 million owed taxes and used the standard deduction to calculate taxable income and the amount owed before tax credits. And another 49 million standard deduction users owed no Federal income taxes at all due to low taxable income or child and other tax credits.

In short, you absolutely do not need a giant IRS bureaucracy—and, indeed, hardly any labor-intensive operation at all—to administer the IRS code in the case of 92% of annual tax filings and the overwhelming share of US income taxpayers. That’s because virtually all the relevant data for completion of these non-itemized filings is machine readable and available on other IRS reporting systems, as shown below.

For want of doubt, here is the entirety of the tax computation for a couple earning wages at the US median income of $80,000, using the $13,850 standard deduction for a joint return and claiming two $2,000 child tax credits. The fact is, with today’s technology 99.999% of the work of processing, examining and adjusting (if necessary) non-itemized tax returns of this type should be accomplishable by IRS computers, with nary a bureaucrat’s finger-prints evident in the whole shebang.

That’s especially the case because the overwhelming share of the $10 trillion of AGI among non-itemizers is for wages and salaries reported to the IRS on W-2s; and, also, for interest, dividends, rents, royalties, independent contractor earnings, stock sales, pensions, annuities, IRAs and taxable Social Security earnings—all of which are also reported by the payers of these amounts on Form 1099s.

In the illustration below, any alert machine—to say nothing of an AI-enabled one rigged-up by Elon & Co.—could cross check the W-2s, calculate the taxable income, apply the three relevant tax brackets, deduct the $4,000 of child credits, verify the tax liability of $6,243 and subtract the taxpayer’s withholding amounts to determine whether a payment or refund was required.

All in literally a nanosecond. Presto!

Step-by-Step Calculation of $80,000 Wage-Earning Couple With 2 Kids And The Standard Deduction

1. Gross Income: $80,000
2. Standard Deduction: $13,850 (for married filing jointly in 2023)
3. Taxable Income: $80,000 – $13,850 = $66,150

Tax Liability Calculation

1. Taxable Income: $66,150
2. Tax Rates:
   • 10% on income up to $22,000
   • 12% on income from $22,001 to $38,600
   • 22% on income from $38,601 to $66,150

Tax Calculation

• 10% on the first $22,000: $22,000 * 0.10 = $2,200
• 12% on the next $16,600: $16,600 * 0.12 = $1,992
• 22% on the remaining $27,550: $27,550 * 0.22 = $6,051

Total Tax Before Credits: $2,200 + $1,992 + $6,051 = $10,243

Child Tax Credits

• 2 Child Tax Credits: $2,000 per child
• Total Credits: 2 * $2,000 = $4,000

Tax Liability After Credits: $10,243 – $4,000 = $6,243

So how in the world can they justify 83,000 bureaucrats and a budget of $16.1 billion when the overwhelming share of returns involve what can be aptly described as “machine work 101”?

The answer, purportedly, lies in the balance of filings—the 15.29 million itemized returns. But even here the overwhelming bulk of the relevant income items and deductible expense items are not so complex or opaque at all. Indeed, they too are available on other IRS reporting systems and are machine readable at the individual taxpayer ID level.

Specifically, in 2022 the amount of AGI reported on these itemized returns was $4.809 trillion or about 32% of total AGI. But within this total there was included the following amounts which are all machine readable from W-2s and 1099s:

• Wages and salaries: $2,345 billion.
• Taxable interest: $78 billion.
•  Taxable dividends: $230 billion.
• IRAs: $110 billion.
• Pensions and annuities: $176 billion.
• Taxable Social Security $82 billion.
• Unemployment benefits: $3 billion.
• Subtotal: $3.024 trillion.
• Above Income As % of AGI on Itemized Returns: 63%.

When it comes to verification on a machine-readable basis, the above income items are all check, check and check. This means that when you combine the above machine-readable AGI amounts from itemized returns with the $10.025 trillion reported on non-itemized returns, it works out to 88% or $13.049 trillion of the $14.834 trillion of total AGI reported for 2022.

None of this AGI should require any significant labor-intensive administration, examination, adjustment or enforcement. The IRS computers should be aware of every dime of AGI from the above categories and whether it was filed accurately by the taxpayer or in need of the proverbial IRS-ordered “adjustment”.

So it is hard to figure out why on the AGI/income side of the equation there is a need for anything remotely like the headcount and budget magnitudes shown below. For instance, the 22,000 headcounts in “enforcement” and “compliance” should be as idle as the proverbial Maytag repairman when it comes to standard deduction returns and the machine-readable sources of income filed on itemized returns. In these instances, there is nothing material for taxpayers to cheat on that wouldn’t be flagged by a properly programmed computer instantly upon filing.

And the same is true in the case of the 33,000 headcounts in “taxpayer services”, “operations support” and “administrative support”. Virtually none of these bureaucrats are needed to process the $10 trillion of AGI on the 146 million non-itemized returns and the $3 trillion of AGI on 15 million itemized returns that is already reported independently by the underlying payers of these income sources.

To the contrary, that’s work for 24/7 machines, not 6.5 hours per day (after civil service required breaks and lunch) government bureaucrats who get 35 vacation, personal leave and sick days per year, on average. And a high share of whom in the post-pandemic era don’t deign to come into the office even on workdays, anyway!

Breakdown of IRS Budget and Headcounts By Function:

 

For want of doubt, here are the other arguably more complicated categories of AGI reported on itemized returns. But even in these cases, there is plenty of work for the machines to do with respect to examination and verification. For instance, $845 billion or nearly half of the total below is owing to capital gains. But that source of income is already reported by issuers on Form 8940 and Schedule D of 1040s. So Elon’s machines should be on top of that, as well.

At the end of the day, most of the complexity and opacity of the IRS code relates to the $106 billion of net profits reported for business and professional income and the $704 billion reported by sub-chapter S corporations. Here the complexity arises not just from gross income reporting, but more especially from the timing and amounts of allowable business expenses incurred in getting to the net profits figures shown below.

Still, the total amount of AGI involved in these two sources at $950 billion is just 6.5% of total AGI. Even if returns with heavy sub-chapter S or professional and business earnings involve a lot of digging, checking, reconciling and verifying by humans, it is hardly likely to be anything close to 83,000 bureaucrat’ worth.

So, yes, there may well be 2,650 pages of IRS code and another 9,000 pages of IRS regulations, and the whole thing may have 25 times more words than the Lord of the Rings trilogy. But when it comes to the overwhelming bulk of income tax filings and the AGI reported on them, 98% of this legal labyrinth is largely irrelevant. It’s unfortunate existence is merely cited as a smokescreen to justify a massive, unnecessary tax collection bureaucracy.

Other Sources of Income Reported on Itemized Returns in 2022

• Business and professional profits: $106 billion.
• S-corporation net income: $704 billion.
• Capital Gains: $845 billion.
• Property sales: $26 billion.
• Rents and royalties: $20 billion.
• Estate and trust income: $29 billion.
• Gambling income: $29 billion.
• Other, net: $5 billion.
• Total of above: $1.785 trillion.

Nor does the itemized deduction side of the ledger change the picture. Upwards of 91% of itemized deductions, which amounted to $669 billion in 2022, were accounted for by the first five line-items shown below. These are largely machine readable based on standard reporting forms that originators of these deductions are required to file with the IRS.

For instance, mortgage interest deductions are reported on Form 1098; charitable contributions are reported in Form 990 and deductions for state and local taxes paid are available from IRS information sharing reports by the states. Yet in 2022 these three deductions alone amounted to nearly $500 billion or 75% of the total.

Major machine-readable itemized deductions in 2022:

• Medical deductions after floor: $93 billion (gross deductions of $121 billion less $28 billion floor effect).
• Taxes paid deduction: $125 billion.
• Mortgage interest deduction: $147 billion.
• Investment interest deduction: $23 billion.
• Charitable contributions deduction: $222 billion.
• All other itemized deductions: $59 billion.
• Total Itemized Deductions: $669 billion.

In short, upwards of 90% of the AGI reported in 2022 for all returns was machine readable from independent reporting sources and more than 90% of itemized deductions were also machine readable. Accordingly, the preponderant share of income and deduction data coursing through 161 million annual income tax filings is essentially riding in a self-driving vehicle. The work of processing, assessing, validating and adjusting it, where necessary, does not likely require more staff than the current headcount of the Capitol Hill Police (2,400).

Moreover, even a few small intelligent changes in the IRS code would narrow even further the number of returns and amounts of AGI that need labor-intensive review and verification. For instance, among the 15.29 million itemized returns filed in 2022, the overwhelming share were at the lower and moderate ends of the income scale where disputed deduction amounts are inherently limited.

2022 Distribution Of Itemized Deduction Returns By AGI Level:

• $100,000 and under: 5.755 million (37.6%).
• $100,000 to $500,000: 8.076 million (52.8%).
• $500,000 to $1,000,000: 0.903 million (5.9%).
• $1,000,000 and over: 0.558 million (3.7%).
• Total Itemized Returns: 15.292 million (100%).

As indicated above, 13.831 million of itemized returns, or more than 90%, reported AGI of $500,000 or lower–including 5.8 million at $100,000 or lower.

In turn, these $500,000 and under filings reported an aggregate of $1.960 trillion of AGI and $475 billion of itemized deductions. So a “variable standard deduction” allowance of roughly this ratio—24% of AGI— for currently itemized returns up to $500,000 would be revenue neutral. But by eliminating upwards of 90% of itemized deduction filings, an income based “variable standard deduction” would also surely reduce the need for several thousands of examiners, service personnel and overhead managers, as well.

After all, there are only 1.461 million returns with AGI of $500,000 or higher, which reported the amounts shown below for 2022. We absolutely do not believe, for instance, that you need a bureaucracy of 83,000 to examine $213 billion of itemized deduction taken by the wealthy, when $126 billion of these were owing to charitable contributions and $41 billion to investment interest deductions.  That’s nearly 80% of the total deductions taken by the wealthy, yet every dollar of this is machine readable and verifiable because it is reported independently to the IRS by the charitable institution recipients and interest-receiving banks, respectively.

Likewise, 71% of the $2.78 trillion of AGI is due to W-2 salaries ($931 billion), investment interest ($62 billion), ordinary dividends ($170 billion), capital gains ($774 billion) and rents and royalties ($40 billion). As indicated previously, all of these items are also reported to the IRS separately and are machine readable by its computers at the taxpayer ID level.

So even in the insane nest of complexity which is the US tax code as it applies to the wealthy, the case just isn’t there to justify the egregiously padded payrolls at the IRS. Not even remotely—and that’s before taking a legislative scalpel to the tax code with the aim of drastically broadening the base and flattening the rates.

Key Tax Data for The 1.461 Million Filings with AGI of $500,000 or Higher:

• Total AGI: $2,780 billion.
• Itemized Deductions: $213 billion.
• Other Adjustments: $86 billion.
• Taxable Income: $2.481 billion.
• Taxes Paid: $708 billion.
• Itemized Deductions as % of AGI: 7.6%.
• Taxes Paid As % of Taxable Income: 28.5%.

So can the DOGE find a way to cut the IRS staff by upwards of 50% and 42,000 bureaucrats at a budget savings of $5 billion per year? We’d say, yes, just dig into the rich drove of data in the IRS Data Book for recent tax years and the degree of the current scam will become more than evident.

In that context, DOGE might well consider a technologically modern version of the old postcard-based approach to simplification of the Federal income tax. Thus, there is no reason why upwards of 150 million filers with AGIs under $500,000 could not simply receive an “E-Card” from the IRS at their personal email address in which the IRS machines have already done all the work. The E-Card would:

• Calculate and sum all sources of AGI.
• Apply the standard deduction and child credits.
• Compute the tax liability owed.
• Calculate the amount of either payment or refund due after crediting taxpayer withholdings.
• Provide an option to “accept” the E-Card outcome or elect to file different amounts in the regular way.

Again, based on the IRS filing data it is likely that at least 90% of E-Card recipients would check the “accept” box and be done with tax time, with no expense on their end and no IRS bureaucrats on the other end.

Our confidence in the conclusion is based on these considerations from the 2022 IRS data. Only 4.7% of the 120 million returns with AGI under $100,000 claimed itemized deductions and the amount of AGI on these returns was just 7% of AGI on all returns under $100,000.

Summary of Filings with AGI of $100,000 or Under:

• Returns With No Taxes owed: 47.048 million returns with $922 billion of AGI.
• Standard Deduction Returns: 66.865 million returns and $3.424 trillion of AGI.
• Itemized Deduction Filers: 5.755 million returns with $345 billion of AGI:

Likewise, 1.88 million or 22% of filings in the $100,000 to $500,000 range used itemization, but it is likely that the aforementioned variable standard deduction approach would limit the number of itemizers very sharply.

Finally, even without sweeping tax reform and the substitution of tariff and consumption taxes for the income tax, as has been vaguely proposed by President Trump, a huge share of the $550 billion that taxpayers now absorb to figure and file their taxes and contest with the IRS bureaucracy could be readily and substantially reduced.

Of course, the prospect of 42,000 IRS agents and hundreds of billions of filing and record keeping expenses should be more than welcome.

*  *  *

The truth is, we’re on the cusp of an economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.

“We’ve got $1.7 trillion in student debt on the books and we’ve got 7.6 million open jobs right now – most of which don’t require a 4-year degree,” says a frustrated Mike Rowe in his ubiquitously velvetty tones.

“And we’ve got 6.8 million able-bodied men who are not only out of the workforce, they’re not looking.” 

It’s generational, Rowe tells Theo Von. It’s not about the pay, he adds, noting that there’s no enthusiam for the work:

“We took shop class out of high school, we robbed kids of the opportunity to see what that kind of work even looks like.” 

“Meanwhile,” Rowe continues:

“we told a whole generation of kids they were f**king screwed if they didn’t get a 4-year degree.”

“How did college get so expensive?”

“Nothing has gotten more expensive in the last 40 years than a 4-year degree. Not real estate, not healthcare, not energy, nothing.”

“We keep telling kids they’re screwed if they don’t go in this direction. We free up endless money to loan them.” 

But the solution is not simple:

“Something beyond the tariffs, something beyond policy is gonna have to happen to make 22-year old go, yeah, I would consider” learning a trade.

Watch the full clip below:

Mike Rowe: “We’ve got $1.7 trillion in student debt on the books and we’ve got 7.6 million open jobs right now—most of which don’t require a 4-year degree.”

“And we’ve got 6.8 million able-bodied men who are not only out of the workforce, they’re not looking.”

“We took shop… pic.twitter.com/33eVay6muE

— Holden Culotta (@Holden_Culotta) April 24, 2025

h/t @Holden_Culotta

Authored by James Rickards via DailyReckoning.com,

With so much attention focused on U.S. stock markets, it seems timely to pivot away from stocks for the moment and consider the global perspective. Globalization may be dying in terms of trade and supply chains, but financial markets are inextricably linked in ways that relatively few understand.

King Dollar Still Rules

The dollar still dominates the global financial system despite the cracks in the foundation and the valid criticisms. If there’s a dollar problem in Eurodollar banks, it’s sure to echo from Tokyo to Shanghai and New York. And problems in those locales affect everything else.

I’ve just returned from separate visits to India, Japan and Jekyll Island, Georgia. India has the largest population in the world, has the fifth largest economy, is a nuclear power and a key member of BRICS. Japan is the fourth largest economy in the world and is a key geopolitical ally of the United States in its faceoff with China. Jekyll Island is a lovely ocean resort but is best known as the site of a secret meeting in 1910 where the Morgan, Rockefeller and Warburg interests dreamed up the Federal Reserve System.

I continually urge people to get away from their desks, stop staring at screens and go out and talk to real people. There’s no substitute for walking the streets around the world (including the poorest areas) if you really want to know what’s going on.

While India, Japan and Jekyll Island could hardly be more diverse and geographically scattered, they share a common thread. It’s their economic linkage through the U.S. dollar. The following are some impressions I gathered during these visits that reflect the volatile situation facing markets today.

A Reasonable Response to Tariffs

India and Japan had the most reasoned response to Trump’s new tariff policies. Trump quickly backed off his high “reciprocal” tariffs (27% for India and 24% for Japan) and reverted to his blanket 10% tariff on all imports for every country in the world except China.

Responses varied from retaliation tariffs (proposed by Canada, China and the EU) to a much more reasonable approach of simply asking the White House for a meeting to sit down and discuss the issue amicably with a view to lowering tariffs in both directions. Japan and India fell into this latter category and are being rewarded by being included among the first countries that will actually have that opportunity. (Mexico has also taken the moderate route by engaging in discussions rather than retaliation).

There will be some give and take. Some U.S. tariffs on certain items are likely to remain in place. But the optimal solution is not to cut down on U.S. purchases from those countries but for them to buy more from the U.S.

That trims the U.S. trade deficit without reducing world trade and so constitutes a win-win resolution with both India and Japan. India will likely buy more military hardware and semiconductors from the U.S. Japan will likely buy more agricultural goods including soybeans and beef. The result will be higher growth in the U.S.

Bilateral deals like this have losers. Taiwan may miss out on some semiconductor sales (although they are investing hundreds of billions of dollars to build semiconductors in the U.S.). Russia may miss out on military sales to India although they will remain a major energy supplier. Still, the U.S. is done being the “consumer of last resort” to the world and wants to increase its profile as a seller. Trump’s policies move the U.S. in that direction.

Take Care of Your Own

There is little question that the new U.S. tariff policy will hurt some countries around the world. Not to sound harsh, but that’s their problem. Trump’s job is to make America great again. President Xi’s job is to make China great again. Chancellor-in-waiting Merz’s job is to make Germany great again.

The U.S. cannot carry the world on its back. If other countries (rich or poor) took Trump’s growth-oriented approach instead of free riding on America, the entire world would be better off. That’s certainly the view from the White House and is a good guide to U.S. policy going forward.

Defenders of China point to the fact that Chinese exports are not a particularly large percentage of their total GDP. (Germany is the worst offender by that metric). The problem with that data point does not come from the Chinese export number; I’m sure that’s roughly correct. The distortion comes from the GDP denominator. Chinese GDP is overstated by 100% (at least) perhaps more, and China may already be in a recession.

The reason is that China shows about 45% of its GDP as investment, mostly in the form of government backed construction. I’ve been to the ghost cities in China and seen more on the horizon. I got mud on my boots on the construction sites (except I was wearing Italian loafers). There is real steel, glass and copper in the buildings and it takes real labor to build them. That all counts as GDP.

But they’re all empty. If you used GAAP or international accounting principles, you would write that investment down to zero immediately. You can’t put a ghost city into inventory. Buildings age rapidly and take enormous amounts to maintain. I saw this in the Congo in the early 1980s. They had a commodity boom in the 1970s and wasted much of the money on skyscrapers and other showcase projects.

By the time I arrived there, the windows were falling out and rust stains ran down the sides of their showcases. The same thing will happen in China. Once you make that accounting adjustment for wasted investment, GDP shrinks, and the Chinese export/GDP ratio goes up exponentially. China is much more dependent on exports for any real growth than most analysts realize. Trump and Scott Bessent have this right.

It All Depends on Conditions

Tariffs are not automatically good or bad for an economy. Their impact depends on initial conditions when the tariffs are imposed. Tariffs are a tool that should be applied judiciously. A country that overinvests and under consumes will be hurt by tariffs. The tariffs will increase investment and restrain consumption, making the imbalance worse. That’s what happened to the U.S. under the Smoot-Hawley Tariffs in 1930 and later.

A country that over consumes and underinvests will benefit from tariffs. That’s the situation in the U.S. today. The tariffs will increase investment as foreign and domestic investors build new plants behind tariff walls. Tariffs will channel consumer dollars from consumption into savings, which is also desirable. In the end, consumption will expand not because of cheap imports but because of high-paying U.S. jobs.

China is in the category that overinvests (much of it wasted) and under consumes. China’s best strategy would be to lower its own tariffs and allow its people to spend their savings on imported goods from the U.S. and EU along with their own production. That would reduce China’s trade surplus with the U.S., increase China’s GDP and improve the well-being of its own people. It would also make an excellent opening move in any effort to get the U.S. to reduce its tariffs on China.

The U.S. is making good use of tariffs. China is doing the opposite. China may be fighting to a draw in the rhetorical war, but it will definitely lose the trade war. Japan, India and Mexico are models of how to make progress. China is the poster child for how to fail.

Global supply chains will no doubt be disrupted by the tariff and trade wars now erupting. Reconfiguring supply chains will be a one-to-two-year transition. But once it’s done, the new supply chains will prove durable. Volkswagen blundered badly by putting its new Audi Q5 plant in Mexico. Their U.S. sales are booming right now (beat the tariffs!) but will fall off a cliff once dealer inventories are drained and tariffs apply. Still, that’s a management blunder not a global disruption. Supply chains are adaptable with a lag. U.S. soybeans will soon be on their way to Japan if China doesn’t want them.

As an aside, Elon Musk’s shelf life in the White House pantry will soon expire. Musk sparked a pointless feud with White House trade and manufacturing czar Peter Navarro. I know Peter fairly well (a conversation with him is like a graduate level oral exam but that’s another matter). When Elon attacked Navarro, he messed with the wrong guy. Navarro took a bullet for Trump by serving four months in a federal penitentiary rather than answer a subpoena that sought to pierce the veil of executive privilege between the two. That’s the kind of loyalty Trump respects. Navarro also happens to be right about tariffs despite Musk’s whining.

The Silent Financial Crisis

With regard to the Federal Reserve System that emerged from the swamps around Jekyll Island, the Fed has fallen into complete irrelevance. They have modest impact on the short-end of the yield curve (Treasury bills) but have no material impact on the intermediate- and long-end of the yield curve (Treasury notes and bonds).

U.S. national debt and spending will never be brought under control. But sustainable growth can be stimulated by sound fiscal policies, if not by the Fed. As long as nominal growth is greater than nominal debt increases, then the U.S. debt-to-GDP ratio will shrink. That’s the simple formula behind Scott Bessent’s Three Arrows plan and it can feed on itself in a virtuous circle.

What the Fed and the Treasury have done (mostly under Biden) is to create a global dollar shortage, which is now morphing into a global liquidity crisis. China is not dumping Treasuries because they’re distancing themselves from the dollar. Quite the opposite. China is selling Treasuries because they’re desperate for dollars and can’t get them from Japanese banks who have their own problems with carry trade unwinds.

The liquidity crisis then goes back to European banks who can’t fund in Eurodollars and U.S. hedge funds who can’t find collateral to support their derivatives basis trades. India is not immune.

The best description of a financial crisis I’ve ever heard is that “Everybody wants his money back.” We’re dangerously close to that situation right now. If it gets worse, trade, tariffs and stock markets will be a sideshow. Watch Treasury yields and foreign exchange markets if you really want to know what’s going on.

Russia’s top military leaders as well as President Vladimir Putin have on Saturday declared the full liberation of Russia’s Kursk region, after Ukrainian forces invaded and occupied huge swathes of it starting last August.

The final fight was for the village of Gornal, which lies on the Ukrainian border. Fighting on the vicinity of the settlement became fierce earlier this month, and the tide was definitely in Moscow forces’ favor after the capture of a key monastery complex. Russian forces accused the Ukrainian army of using the monastery as a military forward operating position.

Putin in a Saturday video address thanked Russian service members “who took part in defeating the neo-Nazi groups” who for over six months held hundreds of square kilometers of sovereign Russian territory. He declared the utter ‘failure’ of the invasion attempt.

“The Kiev regime’s adventure has completely failed, and the huge losses suffered by the enemy, including among the most combat-ready, trained and equipped, including by Western models of equipment… will certainly be reflected along the entire line of combat contact,” he said.

Chief of the general staff Gen. Valery V. Gerasimov, informed Putin that the military had “completed the defeat of the Ukrainian armed forces that attacked the Kursk region.”

At the height of the cross-border offensive which began last August, Ukraine’s military had seized just over 530 square miles, but regional reports beginning last weekend said that significant figure was down to less than just 20 square miles. Gornal was the last Ukrainian holdout in Russian territory.

President Putin’s video announcement:

‘I congratulate all personnel of all military units that took part in the defeat of neo-Nazi formations that invaded Kursk’ — Putin

‘The defeat of the neo-Nazi regime is approaching’ https://t.co/qEfZI7b4gE pic.twitter.com/bZImKeVHtW

— RT (@RT_com) April 26, 2025

The operation to retake Kursk had clearly become more highly prioritized by the Kremlin over the last couple months, and likely Putin wanted to achieve its full liberation quickly as talks with the US are underway in order to avoid negotiating an exchange of territory. What little leverage Zelensky had regarding Kursk has now been effectively quashed. 

The timing seems intentional as the White House has admitted that Zelensky holds none of the cards. This without doubt puts Moscow in even more control both on the battlefield and at the negotiating table.

Authored by Jonathan Turley,

“This is not normal.” Those words from Sen. Amy Klobuchar, D-Minn., are undeniably true after the arrest of Wisconsin Judge Hannah Dugan. However, the reason it is not normal is far more debatable. Dugan is accused of becoming a lawbreaker in seeking to obstruct an effort to arrest a man wanted by federal authorities. If true, that is manifestly not “normal.”

As soon as the news of the arrest was reported, Democrats declared another constitutional crisis. Klobuchar added that the arrest “is a drastic move threatening the rule of law” and a “grave step and undermines our system of checks and balances.”

That is a curious claim unless Klobuchar believes that the officers are lying. If not, Klobuchar is suggesting that a judge should be allowed (or at least not held accountable) for actively shielding a wanted person and facilitating their evasion of law enforcement.

Sen. Tina Smith, D-Minn., also condemned Dugan’s arrest, stating, “If [FBI Director] Kash Patel and Donald Trump don’t like a judge, they think they can arrest them. This is stunning — we must stand up to this blatant power grab. Republicans: How is this not a red line for you?”

Yet, what is the “red line” for judges if the allegations are true? This judge is accused of conduct that has resulted in charges for other citizens. The judicial robe is not some form of invisibility cloak that allows judges to engage in alleged criminal acts.

The Wisconsin media is reporting:

Sources have told the Journal Sentinel that ICE officials arrived in Dugan’s courtroom on the morning of April 18. When they went to the chief judge’s office, Dugan directed the defendant and his attorney to a side door in the courtroom, directed them down a private hallway and into the public area on the 6th floor.

If true, that would be an active effort to help the suspect elude police who were carrying out a lawful function.

According to the criminal complaint, Flores-Ruiz allegedly attacked three individuals after an altercation with his roommate about playing loud music. Flores-Ruiz allegedly struck his roommate approximately 30 times with a closed fist and then attacked his girlfriend and a third person. Some of the injuries required hospital treatment.

The evasion of police at the courthouse required officers to chase down Ruiz, which could have resulted in a more serious confrontation on the street.

This is not the first time that a judge has been accused of participating in or directing such obstruction.

I previously wrote about the case of Massachusetts judge Shelley M. Richmond Joseph who was charged with allegedly helping an illegal immigrant evade ICE agents in April 2018. Joseph and court officer Wesley MacGregor were charged with conspiracy to obstruct justice, obstruction of justice, aiding and abetting and obstruction of a federal proceeding.

I was critical of the handling of the case. While Joseph was suspended for three years, charges were dropped in 2022 during the Biden Administration.

The Dugan case occurred at the same time that a New Mexico judge was arrested for harboring an unlawful immigrant and an alleged TdA gang member.

Former Doña Ana County Magistrate Judge Joel Cano and his wife were arrested on Thursday. Notably, Cano reportedly admitted to officers that he smashed the phone of Cristhian Ortega-Lopez after the 23-year-old was arrested in a raid at the judge’s home.

As I said on Fox last night, I am perplexed by Democrats rushing to denounce the arrest of Dugan before we know whether these allegations are supported. If she escorted the suspect to a non-public door to facilitate his escape, that is conduct and would constitute a shocking abandonment of judicial ethics. She can certainly use her authority to address matters properly before her in the form of judicial orders, but actively assisting in an escape is well beyond the pale.

I have often criticized the reckless rhetoric directed against judges, including those who have ruled against the Trump Administration. We need to maintain our civility and respect as we work through these often difficult questions.

However, that works both ways. Judges have to reinforce respect for the judiciary in their own conduct. That includes showing restraint and respect in relation to the countervailing powers of the Executive Branch. It certainly includes avoiding actions that could be viewed as criminal or unethical in resisting this Administration.

That is also a “red line.”

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Jonathan Turley is the author of best-selling book “The Indispensable Right: Free Speech in an Age of Rage.” 

Indian and Pakistani troops have exchanged border fire for a second straight day, in an increasingly volatile and highly dangerous crisis which could develop into full-scale war between longtime nuclear-armed rivals.

Islamic militants killed 26 Indian tourists who had been in a picturesque, mountainous and popular spot in Indian-administered Kashmir on Tuesday. India quickly blasted Pakistan for harboring terrorists in the disputed border area, a charge which Pakistani leaders vehemently rejected, instead suggesting it was a ‘false flag’ orchestrated by New Delhi.

Pakistan’s PM Sharif meanwhile said his country is ready to defend its sovereignty but offered willingness to establish a “neutral” international investigation into the attack.

Days into the crisis and land borders have been shut, visas and military exchange programs mutually canceled, and a landmark water treaty has been suspended.

Al Jazeera writes that Indian “Armed police and soldiers are searching homes and forests for fighters in Kashmir, and India’s army chief reviewed security in the region,” amid the hunt for the killers.

As for the two consecutive days of border fire, it’s unclear precisely where this took place or whether either side took on casualties. Several military outposts reported exchanges of fire.

On former diplomat has warned the region could descend into full-blown war:

Maleeha Lodhi, a former Pakistani diplomat, has told Al Jazeera that there is “a somber mood” in Pakistan with a great deal of apprehension about what might happen next.

“The tensions between the two countries have already pushed the region into an uncharted territory,” she said.

Lodhi added: “The nuclear neighbors are on the brink of a more dangerous confrontation, so there are fears, especially because of speeches by Prime Minister Modi as well as the Indian media.”

Below is President Trump’s reaction aboard Air Force One…

#WATCH | On #PahalgamTerroristAttack, US President Donald Trump says, “I am very close to India and I’m very close to Pakistan, and they’ve had that fight for a thousand years in Kashmir. Kashmir has been going on for a thousand years, probably longer than that. That was a bad… pic.twitter.com/R4Bc25Ar6h

— ANI (@ANI) April 25, 2025

According to Reuters, citing military sources:

The Indian Army said it had responded to “unprovoked” small arms fire from multiple Pakistan Army posts that started around midnight on Friday along the 740-km (460-mile) de facto border separating the Indian and Pakistani areas of Kashmir. It reported no casualties.

Indian Prime Minister Narendra Modi has vowed to pursue the attackers to “the ends of the earth” and a significant military build-up has been observed in the Jammu and Kashmir regions. Likely Pakistan is also sending additional troops.

On top of everything, Indian airlines are having to reroute all of their flights to avoid Pakistani airspace, amid tit-for-tat airspace closures. The tensions have had a negative effect on Indian markets, also as business brace for higher costs.

Authored by Steve Watson via Modernity.news,

Weird AI videos and pictures depicting President Trump and Vice President JD Vance are being virally shared on Chinese social media as a response to the ongoing tariff trade war.

The videos, widely shared across platforms like TikTok, Douyin, and X, depict Trump as (ironically) a Communist dictator and Vance as “eyeliner man,” poking fun at their policies and public personas.

The meme campaign began in response to Trump’s aggressive tariff hikes on Chinese imports, which Vance defended on Fox News, controversially referring to “Chinese peasants.”

The CCP’s propaganda is taking aim at the Trump administration.

An AI-generated music video, inspired by the iconic 1960s revolutionary song “We March on the Great Road,” features characters resembling Trump, Vance, Secretary of State Marco Rubio, and Elon Musk, all holding… pic.twitter.com/U8DfB0Boxz

— NFSC Red Leaf Canada (@hli953777191713) April 25, 2025

Chinese commentators using state-backed accounts have been producing odd content that reimagines Vance in drag with exaggerated makeup or as Chairman Mao, while portraying Trump in absurd scenarios, like applying mascara to Vance in a pink bedroom.

China continues to troll VP Vance and President Trump 👀 pic.twitter.com/mJcoO0vh3M

— Ai Times (@timeforainews) April 25, 2025

One notable video, racking up hundreds of thousands of views, features a satirical “Song of MAGA” with Trump, Vance, secretary of state Marco Rubio and Elon Musk marching through the streets under red socialist banners, carrying Chairman Mao’s ‘Little Red Book’.

The lyrics of the song are changed to ‘Led by Chairman Trump, we shout “MAGA”,’ with the footage then depicting the four working in a factory wearing blue overalls, an attempt to mock Trump’s efforts to revive domestic manufacturing in the US.

The memes also contend that Vance’s “luscious lashes” will cost more due to tariffs, while some suggested halting eyeliner exports as “precision retaliation.”

🇺🇸🇨🇳 They thought they could wage an info war on China.
Then AI entered the chat… and it wasn’t on their side.

Chinese netizens just digitally dismantled Trump’s ex-press secretary and Senator Vance – turning them into virus-themed memes that went viral for all the wrong… pic.twitter.com/ZEDM4h8l1J

— 𝘊𝘰𝘳𝘳𝘪𝘯𝘦 (@OopsGuess) April 21, 2025

Earlier this week, Trump appeared to suggested a potential de-escalation with regards to the tariffs on China, noting that the high tariffs on Chinese goods, currently at 145%, will “come down substantially, but it won’t be zero.”

He further emphasised that the tariffs “won’t be anywhere near that high” and expressed a desire to avoid playing “hardball” with China, indicating a willingness to negotiate a deal.

Trump also claimed that the U.S. and China are “actively” discussing tariff resolutions, though China’s Foreign Ministry contradicted this on Thursday, stating that no consultations or negotiations have occurred.

On Friday, reports emerged that China has exempted certain U.S. goods from its 125% retaliatory tariffs, focusing on semiconductors and integrated circuits. The Shenzhen HJET Supply Chain announced on Chinese social media that eight tariff codes related to these products were reduced to zero, a move confirmed by multiple businesses and reported by Reuters.

Additionally, some U.S. pharmaceutical products, medical gear, and aerospace equipment parts, such as engines and landing gear, have also been granted exemptions, as noted by the American Chamber of Commerce in China and French company Safran.

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