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Authored by Ryan McMaken via The Mises Institute,

New tax revenue data released by the Treasury Department this week shows that tax revenue further worsened in June (compared year over year) from May’s already cratering total.

On the plus side, neither May nor June has returned to April’s historic plunge in revenue.

As shown in June’s Monthly Treasury Statement, June’s total tax receipts were $240.8 billion. That was down 27.8 percent year over year, a decline from May’s year-over-year drop of 25 percent. This was nonetheless less of a plunge than April’s multidecade low in revenue growth, which hit –54.8 percent.

Source: US Treasury.

In spite of declining revenue, federal spending continues at a record-breaking pace. Federal outlays surged in June to $1.1 trillion, a remarkable sum for a single month of spending. In recent years, federal spending for an entire year has been between $4 trillion and $4.5 trillion. 

With declining tax revenues and soaring spending, the deficit reached new highs in June as well. June’s budget deficit hit $864 billion, a new high. It is now likely that the annual budget deficit will easily top $3 trillion, which will be well above any previous deficits. 

The annual deficit reached “only” $1.4 trillion in the wake of the 2008 financial crisis. This moderated over the next eight years, but after years of runaway spending during the Trump administration, the annual deficit again reached $1 trillion in 2019. This was a remarkable feat for a nonrecessionary period, and I warned at the time that this did not bode well for any coming period of economic turbulence. That period has now arrived, and not surprisingly, there appears to be no end in sight to the mounting deficits. 

Unemployment Numbers Climb Again

Hopes that the economy might soon roar back and bring some relief from skyrocketing deficits remain unfounded for now. 

This week’s new data on initial unemployment claims brought more bad news, as more than 1 million workers filed for unemployment benefits for the seventeenth week in a row. For the week ending July 11, initial unemployment claims totaled 1.3 million, a slight decrease from the 1.31 million workers who filed for new benefits the week prior. That’s in seasonally adjusted numbers. In unadjusted numbers, new claims actually increased from the previous week, rising from 1.4 million the week of July 4 to 1.5 million last week.

Since March, 51 million American workers have filed for unemployment. As of the week of July 4, 17.3 million continue to file for claims.

Moreover, June’s tax revenue suggests that worker income has plunged with employment. 

Will earnings and jobs and tax revenue come roaring back in July? This is certainly not a given. After all, many states and jurisdictions are now reimplementing business closures, shutdowns, and other measures which will surely eat away at both jobs and tax revenue. As with the first round of business closures, retail sales and food services are likely to be most immediately impacted.

But underneath those industries are a wide variety of support industries, from janitorial to bookkeeping to commercial real estate, all of which will affect both blue-collar and white-collar hiring. 

Tax Hikes on the Horizon?

As earnings and retail sales plunge, the greatest danger to economic recovery lies in the decline of state and local taxes. The threat does not lie with the tax declines themselves, but with the expected policy reaction. As school districts, city governments, and state legislatures face immense shortfalls in revenue, many are now increasingly talking about large tax increases to fill the budget hole. This will be crippling for businesses seeking to come back from the current round of business closures and the collapse in consumer demand for many services and products. Tax increases will cripple the ability of entrepreneurs to shift resources to more in-demand industries and start up new businesses where old ones fail. 

Facing uncertainty about both tax increases and the threat of ongoing mandated business closures, many business will wait as long as possible to commit to new staff hires. 

President Trump suggested in 2015 that reporters ask Prince Andrew about his good friend Jeffrey Epstein’s so-called ‘pedo’ island, calling it an “absolute cesspool.”

According to The Sun, Trump’s comments came around the time that accuser Virginia Roberts Giuffre alleged that Epstein coerced her into having sex with Prince Andrew on three separate occasions when she was 17.

Giuffre described in detail a March 10, 2001 encounter with the prince in which she says she danced with him at a London nightclub before he had sex with her.

Authored by MN Gordon via EconomicPrism.com,

Captain George Pollard Jr. was hungry.  Actually, he was starving.  He’d been drifting aboard a small whaleboat with some of his crew in the South Pacific for over two months.

The sun was ravaging.  The thirst was unquenchable.  The meagre food rations had taken their toll.  Thus, Pollard did what he had to do to survive.  He took a deep breath, said a prayer…then he devoured his 18-year-old cousin, Owen Coffin.

The grim action was taken on honest terms.  Mr. Coffin’s full commitment to the meal was decided fair and square.  After nine week’s adrift at sea, with nothing but saltwater saturated bread that dehydrated the men as they ate, the starving crew practiced an ancient custom of the sea.  They drew lots to determine who would be eaten.  Coffin lost.

The trouble for Pollard and his crew began weeks earlier.  In November 1820, they’d been harpooning a pod of sperm whales when something awful happened.  An angry 85-foot-long whale smashed head-on into the captain’s ship, The Essex of Nantucket, sinking it to the ocean’s bottom.  This distressing shipwreck inspired Herman Melville’s, Moby-Dick.

The U.S. economy, like The Essex, has been smashed head-on by a massive whale of government lockdown orders.  Halting the spread of coronavirus has achieved varied results.  Though the economic devastation has been unequivocal.

At the same time, fiscal and monetary stimulus – composed of brrr money – in response to the economic smashup has been extraordinarily bullish for stocks.  But what comes next seems to be of little concern to investors.  And what comes next, we believe, is a stock market calamity.  Here’s why…

Grisliness

What happened after The Essex sank was far more terrifying than the wreck.  What happened, you see, is a bone chilling story of the survivor’s gradual descent into starvation, madness, and cannibalism.

When The Essex sank, all the initial survivors could do was scramble into three small whaleboats.  They had little time to salvage their stockpile of food and fresh water.  They also had little idea of the extent of their deplorable situation.

Pollard calculated that the closest land was the Marquesas Islands.  Yet the islands were rumored to be inhabited by cannibals.  Thus, in what must be one of the most ironic decisions in nautical history, a longer route to the south and east to Chile was selected.  The decision to avoid island cannibals, however, had the sardonic effect of turning the men onboard the small whaleboats into cannibals.

First the sailors starved.  Then they went mad.  After that, as they perished one by one, their bodies were cooked and eaten.  Here’s an account of the grisliness that followed:

“One man went mad, stood up and demanded a dinner napkin and water, then fell into ‘most horrid and frightful convulsions’ before perishing the next morning.  ‘Humanity must shudder at the dreadful recital’ of what came next […].  The crew ‘separated limbs from his body, and cut all the flesh from the bones; after which, we opened the body, took out the heart, and then closed it again—sewed it up as decently as we could, and committed it to the sea.’  They then roasted the man’s organs on a flat stone and ate them.”

But the rations of human flesh did not last.  Nor did they satisfy.  The more the survivors ate, the hungrier they felt.

This Stock Market Will Eat You

When the American ship, Dauphin, rescued Pollard and his remaining crew member, the two did not rejoice at their rescue.  They simply turned to the bottom of their boat and stuffed human bones into their pockets.  Once aboard the Dauphin, the two delirious men were seen “sucking the bones of their dead mess mates, which they were loath to part with.”

Somehow Pollard scrounged up the nerve to sail again.  Somehow he also persuaded his financial backers to give him another ship.  Regrettably, Pollard sailed the ship for a little more than a year before it wrecked on a coral reef.  He was ruined, and ended his days as a night watchman.

Many simple lessons can be garnered from Pollard’s epic catastrophes.  Don’t be a fool.  Don’t be stupid.  Don’t make the same mistake twice.  But applying these lessons to attain beneficial results is much more difficult.

For example, not long after famed hedge fund manager Victor Niederhoffer’s leveraged bets on Thai bank stocks and U.S. futures markets during the Asian financial crisis and contagion in 1997 blew up, he hung a large painting of The Essex on the wall across from his desk.  The painting was to be a personal warning for Niederhoffer against recklessness, and a reminder of the precariousness of his success.

Like Pollard, Niederhoffer persuaded his financial backers to give him another chance.  He dusted himself off and achieved something of his former glory with his Matador Fund.  In 2005, the value of Matador increased fifty-six per cent—a performance that earned Niederhoffer an industry award.

But, alas, the Fund did very well until just the moment it didn’t.  Niederhoffer’s predilections for risk and leverage got the best of him.  He blew up again in 2007.

At the moment, we struggle to find a time when the outlook for future stock market returns has ever been shoddier.  Make of it what you will.  Do what you want.  Chase shares of Tesla higher, if that’s what makes you happy.

Just recognize you’re merely drawing lots.  This stock market will eat you soon enough.

Some of the worst rainfall on record has punished China during flood season fueling new concerns the world’s largest hydroelectric gravity dam is under stress.  

The #CCP claims that the #ThreeGorgesDam has “done its best” as water levels exceed their warning limits and concerns over the dam failing deepening.@JoshJPhilipp has the latest news on China’s natural #disasters.

Watch here👉https://t.co/ukgxutGo50 pic.twitter.com/WyCaIMxvxq

— crossroads (@crossroads_josh) July 15, 2020

ABC (Australian Broadcasting Corporation) reports at least 140 people have died in central and eastern China as floodwaters rise. In weeks, 28,000 homes have been destroyed in the Yangtze River region, with at least 33 rivers reaching record-high levels. 

The People’s Daily newspaper said earlier this week that 1.5 million people have already evacuated from flood-prone regions. 

Vice Minister of Emergency Management Zheng Guoguan told reporters Monday some regions around the Yangtze river have recorded the highest rainfall in over a half-century. 

The country recently declared the second-highest emergency response level. Emergency teams have been dispatched to Jiangxi, a southeast Chinese province severely impacted by flooding.

Reuters notes high waters along the Yangtze and surrounding lakes “prove the Three Gorges Dam isn’t doing what it was designed for.” 

“One of the major justifications for the Three Gorges Dam was flood control, but less than 20 years after its completion, we have the highest floodwater in recorded history,” said David Shankman, a geographer with the University of Alabama who concentrates on Chinese floods. “The fact is that it cannot prevent these severe events.”

Fan Xiao, a Chinese geologist and significant critic of dam projects on the Yangtze, said dams are used for electricity generation and control, could “make flooding worse by altering the flow of sedimentation down the Yangtze.” 

Shankman said the Three Gorges Dam has the ability to alleviate flooding in regular periods, but when extreme weather strikes, the dam is useless. 

“The Three Gorges Dam reservoir does not have the capacity to significantly affect the most severe floods,” he said.

“Residents in the Yangtze River basin in recent weeks have expressed concerns over the ability of the massive dam to handle more heavy rain, even though authorities have been releasing floodwater from the structure,” said Fox News. 

NTD News explains why the dam might collapse.

Since this video was released on June 23rd, the CCP has been steadily opening floodgates, flooding cities downstream w/o warning.

They wouldn’t have just opened all the floodgates unless there was no other option to protect the dam. pic.twitter.com/MExZUIjPpS

— Things China Doesn’t Want You To Know (@TruthAbtChina) July 13, 2020

Chinese state media has rejected Western media “hype” stories about the dam collapsing.

Authored by Jonathan Turley,

I have recently been highly critical of reports that Rep. Iihan Omar (D., Minn.) has given up to one million dollars in campaign funds to her own husband’s company, one of the long-standing loopholes for corruption in Washington.  Omar has been highly controversial for her positions and statements but this should be a matter that unifies people across the political spectrum.

However, the attention of her colleagues has not been on closing this loophole but instead lashing out at her recent call for “dismantling the whole system of oppression” in the United States from its economic to political structures. A resolution, introduced by Rep. Andy Biggs (R., Ariz) would denounce Omar for having “a documented history of expressing anti-American sentiments.” 

The resolution is a mistake that undermines both free speech and democratic values.  It should be withdrawn.

Omar recently declared:

“We are not merely fighting to tear down the systems of oppression in the criminal justice system. We are fighting to tear down systems of oppression that exist in housing, in education, in health care, in employment, in the air we breathe. As long as our economy and political systems prioritize profit without considering who is profiting, who is being shut out, we will perpetuate this inequality,” she said. “We cannot stop at the criminal justice system, we must begin the work of dismantling the whole system of oppression wherever we find it.”

Many commentators and fellow members immediately denounced Omar’s positions. It was an example of how free speech is meant to work.  Omar’s speech was met with counter speech.

However, members now want a formal censure or condemnation from the House as a whole. It is obviously not going to happen with the Democratically controlled house. Yet, the resolution itself is a concern for what it says about the right of members to voice their views of the inherent flaws or abuses of our system. I do not happen to agree with Omar but I find the resolution far more concerning than her hyperbolic comments.

The resolution denounces Omar for advocating “a Marxist form of government that is incompatible with the principles laid out in the founding documents of the United States.”

As a Democratic nation, members have every right to call for sweeping reforms, even changing the emphasis or structure of our economic and political system.  Omar has become a member of Congress to seek such changes lawfully and constitutionally.  To her credit, she has overcome much in her life to attain her position in Congress and has become a global figure of influence.  I do not agree with her and will oppose many of her proposals.  However, we are all working within a constitutional structure that allows for and protects different visions for this country.

It is not enough to say that such resolution are just an exercise of free speech for other members.  These members are seeking to use the imprimatur of their house to denounce political opponents.  I have long opposed the use of such institutional statements, including most recently the effort on my own faculty to denounce Attorney General Bill Attorney as a law school institution.  Individual members, like faculty members, are free to join as individuals in such statements.  It is a misuse of the Congress to use resolution to denounce those with opposing political or economic views.

It is also a practice that makes for poor legislative cultures.  The House Democrats could endlessly pass resolutions condemning their opponents as racists or fascists.  Since these resolutions do not take any concrete action, courts are likely to view the matters as outside of the realm of judicial review or lacking a cognizable injury for judicial relief.  The result is to further the stifling intolerance for opposing views that we are seeing across the country, particularly on our campuses.  This becomes an insatiable appetite to use our institutions to denounce or silence or marginalize those with opposing views. The way to defend our system is not to use the Congress to denounce political opponents. We have gone through ugly periods like the Red Scare where such condemnations were comment and members used their institutional power to intimidate or coerce those with dissenting views.

The greatest “anti-American” threat to our freedoms is the effort to oppose or chill the exercise of free speech, particularly by a political leader.  The debate started by Omar is the ultimate example of our core values.  We can disagree with each other while affirming our right to call for and seek changes within our system.  The use of institutional resolutions of censure or condemnation undermine those values.  Members, like free speech, require space.  Indeed, in New York Times v. Sullivan, Justice William Brennan noted that “the freedoms of expression” require “breathing space…to survive.”

I do not question the sincere feelings of anger of these sponsors but they should withdraw this resolution in the interests of the very American values that they cite.

Google is about to take one giant step into directly shaping the prevailing media narrative.

One month after Google made news by banning ads on websites – such as this one – for violating its terms of service when it comes to “derogatory” material (a purposefully amorphous concept), the world’s leading search engine and internet advertising monopoly which controls 70% of online ad spending, will take an even more aggressive step. According to CNBC, starting on August 18, Google will “ban publishers from using its ad platform next to content that promotes conspiracy theories about Covid-19.” Additionally, “in cases where a particular site publishes a certain threshold of material that violates these policies, it will ban the entire site from using its ad platforms.”

In short, anyone who deviates from the conventionally accepted narrative, or as CNBC puts it  challenges the “authoritative scientific consensus” on the coronavirus pandemic will be promptly demonetized.

What constitutes “authoritative scientific consensus”? According to CNBC “banned claims would include conspiracy theories like vaccines being attempts to genetically modify the population, that Bill Gates created Covid-19 or that the disease was a bioweapon created in a Chinese lab.” Which is especially troubling since the claim of whether or not the virus was created in the Wuhan Institute of Virology has not only been challenged by other “authoritative” sources, but as we reported in April, none other than the Five Eyes intelligence agencies of Australia, Canada, NZ, UK and US, are “looking closely at the work of a senior scientist at the Wuhan Institute of Virology, Peng Zhou, as they examine whether COVID-19 originated from a wet market or whether the naturally-­occurring virus may have been released from the level four laboratory in Wuhan that was studying deadly coronavirus pathogens from bats.”

One wonders how much of an influence China has in shaping what is the “authoritative scientific consensus?” As just one example of the egregious conflicts of interest in determining what is and is not “truth” we remind readers that a “Facebook ‘Fact Checker’ Worked At Wuhan Biolab; Ruled Out Virus-Leak While ‘Debunking’ Articles.“

One also wonders if Fox News will be demonetized for publishing this story: “Chinese virologist accuses Beijing of coronavirus cover-up, flees Hong Kong: ‘I know how they treat whistleblowers‘”

Finally, will Google also be censoring the (un)scientific opinion of 1200 “experts’ that the virus is able to pick moral and immoral hosts and that BLM protests are necessary and permitted but any other large social grouping are dangerous and should be banned, including the funerals of family members?

According to CNBC, “Google will begin enforcing the change on August 18, and can remove ads from single articles or, in some cases, entire sites. When it comes to removing ads from an entire site, the company said for most of its policies it has a percentage threshold for policy violations before it will fully demonetize a website. (The violation of some policies, like one preventing child sex abuse material, is considered by the company to be so egregious that they result in immediate site-level action).”

And so, whatever emerges as the prevailing narrative aka the “authoritative scientific consensus”, which as we have clearly seen over the past 6 months comes in the context of a specific political agenda, will be sacrosanct and anyone who dares to challenges said narrative will be promptly demonetized by Google; and since that traditionally means a death sentence for that website, only outlets that publish stories that Google “blesses” will be allowed to exist.

Needless to say, this is merely the latest indication any outlets that challenges conventional orthodoxy will have no choice but to turn to a subscription model if they wish to survive, because once Google emerging first as an arbiter of what is “allowed” in the context of Black Lives Matter, and now the ongoing Covid pandemic, it is only a matter of time before Google aggressively demonetizes anyone who strays from whatever is the accepted orthodoxy by a handful of Silicon Valley billionaires.

Finally, it is hardly a surprise that all this emerges just months before the presidential election.

As Ghislaine Maxwell prepares to spend a long twelve months at a New York detention center while awaiting trial on charges of sex-trafficking minors and other crimes, questions are swirling over the British socialite’s wealth and marital status after claims made by US prosecutors during a virtual court hearing this week.

According to Assistant US Attorney Alison Moe, Maxwell’s claims that she has less than $1 million in the bank and no monthly income is “implausible,” according to Bloomberg. Her lawyers have suggested that the 58-year-old is far less wealthy than people believe, despite the fact that she was an integral part of deceased pedophile Jeffrey Epstein’s life – who left an estimated $630 million estate behind after he was found dead in a Manhattan jail cell last year.

At the bail hearing, prosecutors said they’d identified more than 15 different bank accounts associated with Maxwell from 2016 to the present with balances ranging from hundreds of thousands of dollars to more than $20 million. She sold a Manhattan townhouse for $15 million in 2016 and still has one in London that she offered as a bail guarantee.

It’s also unclear whether Maxwell has access to funds from an unidentified spouse mentioned by prosecutors Tuesday. She previously toured the secluded New Hampshire estate where she was arrested July 2 with a man who said he was her husband. According to prosecutors, the property was actually purchased by Maxwell for $1 million in cash using a limited liability company. After she was arrested, she told authorities she didn’t know the name of the company that owned the house and that she merely had permission to stay there. –Bloomberg

According to prosecutors, over $20 million was transferred from Epstein-linked offshore accounts to Maxwell – of which millions were later transferred back. Maxwell sued Epstein’s estate in March to cover her legal costs, asserting that the financier promised to financially provide for her.

Meanwhile, a Swiss Trust holding over $4 million may be at her disposal as well.

“It is very unclear whether the defendant is receiving proceeds from trust accounts or an inheritance or means of other kinds,” said the US prosecutor, Moe, at Tuesday’s hearing.

“I would venture to say 20 is probably what they found so far and that the net worth would be substantially more,” said Jordan Waxman, managing partner of New York-based Nucleus Advisers wealth management. “The other thing is Jeffrey Epstein allegedly was worth $570-or-so million. What was she doing as his No. 2 and only with $20 million?”

Maxwell’s attorney, Mark Cohen, refuted the government’s claim regarding the 15 accounts, saying “No detail, no explanation to the court, just more dirt,” and that “she has three bank accounts that she disclosed,” though acknowledged that it was possible that there were other accounts related to Maxwell’s shuttered nonprofit.

Cohen also said proceeds from Maxwell’s Manhattan townhouse sale have already been depleted due to various liabilities and expenses, including “extensive, substantial litigation.” Maxwell in 2017 settled for undisclosed terms a defamation suit by Epstein victim Virginia Guiffre and is now paying four lawyers to defend her against criminal charges. –Bloomberg

Another question is how much money, if any, she inherited from her wealthy father – British publishing tycoon Robert Maxwell, who died in 1991 under mysterious circumstances as his media empire – which included the New York Daily News – was imploding and had begun to default on loans. Maxwell was found to have diverted hundreds of millions of pounds from his companies’ pension funds.

That said, Maxwell’s brother declared the largest bankruptcy in UK history according to Bloomberg, so it’s unknown what Ghislaine walked away with, if anything.

Epstein and Maxwell reportedly met and began dating around 1992 shortly after her father’s death. In 1995, Epstein renamed a now-defunct Palm Beach company “Ghislaine Corp,” which was dissolved in 1998 per the Wall Street Journal. In 2003, Epstein described Maxwell as his “best friend,” who was not on his payroll – yet “seems to organize much of his life.” 

Mystery husband?

During Tuesday’s hearing, prosecutors disclosed that Maxwell is secretly married, but that she would not provide the name of her husband.

“In addition to failing to describe in any way the absence of proposed cosigners of a bond, the defendant also makes no mention whatsoever about the financial circumstances or assets of her spouse whose identity she declined to provide to Pretrial Services,” said Moe, according to the New York Post.

Last year, Maxwell was linked to 44-year-old British tech CEO and Council on Foreign Relations (CFR) member, Scott Borgerson – whose $3 million “secluded oceanfront property” in New England was the subject of speculation as to Maxwell’s whereabouts.

The socialite’s New England hideaway is an imposing three-story colonial property with five-bedrooms, wraparound terraces and sweeping grounds which reach to the ocean. The property is owned by tech CEO and maritime academic Dr Scott Borgerson.

Borgerson was seen by DailyMail.com in July running errands in the affluent community of Manchester-by-the-Sea, a half-hour drive from Boston.

…

The former Coast Guard officer, is also a member of the Council on Foreign Relations. He was married and is believed to have two children. –Daily Mail

Maxwell has been accused by at least three women of procuring and training young girls to perform massage and sexual acts on the Epstein and his associates. Maxwell was said to have hired, supervised and fired household staff, while directing the visits of dozens of “massage therapists” to Epstein’s residence, according to the Wall Street Journal.