By William A. Galston - July 8, 2025
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By William A. Galston – The consequences of a debt-induced financial crisis would be dire, and government officials would be wise to reduce the risk of such a crisis occurring. Stabilizing the burden of federal debt on the economy is a feasible, responsible target, and lawmakers should move toward it as fast as possible.
The stakes are enormous. Foreign governments and investors already are diversifying their portfolios away from the U.S. dollar and stocks. Read More
By John F. Cogan - Nov. 26, 2024
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By John F. Cogan – Following World War II, and especially during the peak years of the Great Society (1965-74), the federal government greatly expanded its spending on activities that were traditionally regarded as state and local affairs. … New expenditures on traditionally state and local activities as a share of GDP accounted for more than the growth in total federal spending during this period. … In other words, the entire increase in national debt is traceable to the federal government’s spending on state and local activities.
The abandonment of fiscal federalism has … begun to undermine our security. National defense should be the federal government’s highest priority. Yet since the 1950s spending on traditionally state and local affairs has taken its place. Funding these projects has come at the expense of the defense budget, which as a share of the federal total has fallen from around 60% in the mid-1950s to some 13% today. That level is wholly inadequate to meet rising global threats.
The federal government needs to reverse its priorities, prizing national defense and returning state and local affairs to their proper place. Read More
By Phil Gramm and Donald J. Boudreaux - April 14, 2025
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Phil Gramm and Donald J. Boudreaux – The state-directed capitalism of President Biden’s subsidies and Mr. Trump’s tariffs might attract some investments and create hothouse jobs that require perpetual subsidies and protection, but they misallocate productive resources and make the nation poorer. Protectionism also raises consumer prices, dampens competition, and slows innovation and growth.
As Elon Musk has wisely suggested, Mr. Trump can still save us from this bleak future with real reciprocal trade agreements in which we and our trading partners mutually lower our trade barriers. The president’s advisers and Republicans in Congress would serve him better by remembering Thomas Sowell’s advice: “When you want to help people, you tell them the truth.” Read More
By Phil Gramm and John Early - April 2, 2025
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By Phil Gramm and John Early – Spending on Medicaid, Internal Revenue Service cash welfare payments (refundable tax credits) and the Supplemental Nutrition Assistance Program (food stamps) has grown in inflation-adjusted dollars by 671%, 1,463% and 289% respectively since 1990. By contrast, total real Medicare, Social Security and defense expenditures have grown by 383%, 186% and 38% respectively. Medicaid absorbs seven times as much general revenue as Social Security—more than Social Security and Medicare combined. Read More
By Joseph C. Sternberg - April 10, 2025
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By Joseph C. Sternberg – The truth is much more complex, and politically challenging: While some other economies suppress domestic consumption and subsidize export production, Americans choose to do almost exactly the opposite. Through political choices such as suppressing energy production and distribution, or permitting red tape and the like, or any number of other policy foibles, we make it much harder than it otherwise would be to produce things in the U.S. Meanwhile, you can’t take a step in America without tripping over a consumption subsidy.
Most glaring, though, are our entitlements. Social Security, Medicare and Medicaid, not to mention a raft of other benefit programs, funnel vast quantities of money into consumption. The trick here is that we’re able to finance these via chronic fiscal deficits funded by foreign investors, meaning at the margin Americans borrow from the rest of the world at ultralow interest rates and funnel the cash into consumption at home. Read More