Budget and Deficit

The real problem is big government. The bigger the government, the more opportunities there are for fraud.

That’s why at IPI we argue for limited government, not better government. Better government is nice, sure, but also not very likely.

A deeply troubling threshold has been crossed. In recent weeks, the national debt (debt held by the public) of the United States has exceeded our gross domestic product (GDP). In other words, we owe more than we produce. This is the first time since World War II that national debt has exceeded GDP.

Who pays the taxes? For 2025, the top 10% of income earners will pay 60% of all federal income taxes. Meanwhile, 44% of U.S. households will pay zero in federal income taxes.

All but the top 10% of income earners will pay more in payroll taxes than in income taxes.

There are no sovereign liabilities denominated in bitcoin, which means there’s no obvious emergency for which “having bitcoin on hand” is the solution. Reserves should be built around the liabilities and risks you’re trying to hedge — and bitcoin’s volatility tends to amplify risk rather than reduce it.

A government bitcoin “reserve” is really government chasing fads and making highly speculative bets with taxpayer dollars. And gambling with taxpayer dollars is not a legitimate function of government.

The shutdown is a symptom of something deeper: Congress no longer functions. We are operating as if we have only two branches of government. Presidents attempt to rule by a flurry of decrees and orders, courts eventually strike most of them down, and Congress remains catatonic.

If/when the Trump tariffs are found to be unconstitutional, those who have paid unconstitutional tariffs will be entitled to refunds.

Because the problem, as always, is spending. Federal revenue grows at a remarkably steady pace. It’s reasonably predictable. But there is no political will to control spending, and that includes President Trump, who urged Republicans against further spending cuts.

Implementing MFN for Medicaid drug reimbursement would be a long-term structural disaster in exchange for perceived short-term benefits. There are better ways to address our entitlements crisis, and Congress should pursue them.

The Fed will decide in its December meeting whether it will cut interest rates again or, if the members are concerned that inflation is too sticky, hold off lowering interest rates until they see clear signs of inflation decline.