Originally published at The Freemen News-Letter. 

​Would you ask a hungry fox to guard the henhouse? Of course not. For the same reason, Americans should be very wary when “Congress debates solutions to soaring [healthcare] bills.”  

Most people do not believe that the mainstream media reports honestly and objectively. Some still do, likely due to some residual credibility that may cling to the highly partisan, opposite-of-objective misinformation masters called the legacy or complicit media. 
Consider the facts. 

Reporter Samantha Manning of CMG Washington News Bureau announced that Congress will discuss how to solve the problem of unaffordable healthcare prices. “Unaffordable” applies to both individual Americans and the nation.

Last year, the U.S. spent $4.8 trillion on its healthcare system, an amount greater than the entire GDP of Japan, which added $2.24 trillion to a Biden-Harris record debt of $33.17 at the end of 2022. The average U.S. family healthcare costs in 2023 were equally unaffordable, a staggering $31,065. 

To call healthcare bills “soaring” is no exaggeration. Where is the money going? Are the doctors responsible for “price-gouging,” to use V.P. Harris’ phrase? Data shows that payments to doctors – “allowable reimbursement schedules” released by Centers for Medicare and Medicaid Services (CMS) – pay only a small fraction of physicians’ published prices. In many cases, physicians in their offices are paid below the cost of doing business, which is why solo practitioners have been driven out of practice. 

If not to physicians or hospitals, where is the money going? Studies estimate that between 31 percent and more than 50 percent of U.S. healthcare spending does NOT pay for patient care! It pays for BARRCOME – bureaucracy, administration, rules, regulations, compliance, oversight, mandates, and enforcement. In other words, Washington pays its bureaucrats $1.5 trillion to $2.4 trillion “healthcare” dollars, taking those dollars away from patients, taxpayers, and health care providers.

For proof, look no further than the Affordable Care Act (ACA). To pay for all the BARRCOME, such as 50 state Health Exchanges (Dr. Deane was a Director), the ACA took $716 billion from the Medicare Trust, money intended to pay for seniors’ in-hospital care. 

When most people read about a congressional commission to curb healthcare fraud, new rules to activate price transparency, or the recent legislative effort to reduce healthcare spending, they think price lists just appear. Recouping fraudulent medical bills is not free, and we’re already paying the salaries of members of Congress, so how can a new commission cost money? 

When the government does anything, it costs taxpayers and people in the marketplace lots of money and other resources. The Mueller investigation into the Russia Collusion scam by the Hilary Clinton campaign cost $32 million plus 2 ½ wasted years. Washington paid $80 billion to Pfizer for a self-styled CoViD “vaccine” that didn’t work and harmed the health of millions. 
The ACA cost $2.6 trillion. Bernie Sanders admits his Medicare-for-All plan could cost $40 trillion, which represents one-third of the combined productivity of all nations on Earth. 
Imagine how much more care providers could have given patients with $32 million plus $80 billion plus $2.6 trillion, or how much more money could stay in people’s pockets.

Every time Congress legislates a fix for our failing healthcare system, three things happen. First, they move us closer to national insolvency by spending trillions of more dollars we don’t have. Second, they worsen the doctor shortage and make it more difficult for families to pay expenses by taking money from paying care providers to compensate bureaucrats.  Third and worst, with each new regulation, access to medical care goes DOWN – the seesaw effect. Paraphrasing an old beer commercial, spend more, less care. 

This is why the old aphorism applies. Would you ask the fox to watch the henhouse? That is the same as expecting Washington to reduce healthcare spending.

Listen to my discussion with Mandy Connell. ​

And once again pass a giant Continuing Resolution to keep spending until the end of December. Do you really think they are going to craft and pass 12 spending bills before Christmas? No, they won't. That means either another Continuing Resolution or a giant pork filled Omnibus bill that allows everyone in Congress to hide the pork they are bringing back to their districts so they can keep getting re elected. I've got Former White House OMB Chief Economist, Vance Ginn, Ph.D., today at 2:30. We're talking about how Congress is pretending that there is not a spending crisis. It’s time to address the root issue — overspending. Excessive government spending and deficits lead to inflation, higher prices, and a weaker dollar. When the government runs deficits, the Federal Reserve prints more money by mostly buying Treasury securities to cover the deficit. Find Dr. Ginn's website and sign up for his newsletter here.

Originally published at Sen. Rand Paul's office website.

​WASHINGTON, D.C. – Yesterday, U.S. Senator Rand Paul (R-KY), Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, joined by Congresswoman Harriet Hageman (R-WY) and Congressman Dan Bishop (R-NC-08), introduced the Standing to Challenge Government Censorship Act. This bill will prohibit federal employees and contractors from using their positions to direct online platforms to censor First Amendment protected speech, reinforcing our collective commitment to safeguarding the constitutional rights of all American citizens. The Standing to Challenge Government Censorship Act is a streamlined iteration of the Free Speech Protection Act, tailored to address the standing issues highlighted in Murthy v. Missouri.

“Americans are a free people, and we do not take infringements upon our liberties lightly. Our Founding Fathers enshrined the First Amendment to protect our God-given right to free expression, recognizing its fundamental importance to a free society,” said Dr. Paul. “With the Standing to Challenge Government Censorship Act, we will strip away the barriers preventing judicial review of coercive government tactics that silence dissenting voices and ensure that no government official or contractor can undermine the First Amendment rights of Americans. We must confront and dismantle this censorship apparatus to protect our fundamental right to free speech.”

“I have repeatedly said that the government cannot do by proxy what it is prohibited from doing directly. This is exactly what happened with the Biden Administration pressuring social media companies to suppress the free speech of American citizens. The Standing to Challenge Government Censorship Act will not only ensure future litigants would have standing, but also would also apply to the plaintiffs in Murthy,” said Rep. Hageman. “Our forefathers ratified the First Amendment recognizing that government actors would always seek to control public discourse in order to protect their own power structure. No one has a monopoly on truth, and the Biden administration and federal agencies are not entitled to declare that American’s speech is ‘mis-information,’ ‘dis-information,’ or ‘mal-information’ and silence the message, especially when you consider how much accurate and truthful information was squelched during Covid-19 and the 2020 election. We will continue to fight to protect our First Amendment rights.” 

“Americans have a God-given right to free expression, and the constant attacks on the First Amendment from government bureaucrats make safeguarding that right all the more important. Malicious actors within government should never be allowed to silence and censor Americans, and Americans targeted by the Censorship Industrial Complex deserve their day in court. This legislation will ensure just that by removing barriers for judicial review and cracking down on those who aim to trample on the First Amendment,” said Rep. Bishop.

The bill would:

1. Empower individuals to sue government officials who coerce online platforms into censoring constitutionally protected speech.
2. Apply to past First Amendment violations and establish a presumption of liability for any government official attempting to pressure platforms into censorship, thereby overcoming the causality issue identified by the Supreme Court in Murthy.
3. Provide a vital mechanism for all Americans to protect their constitutional rights and challenge government overreach. It ensures that government officials are held accountable for any attempts to infringe upon our fundamental right to free speech.

Additional support:
“In the covid era, the federal government systematically suppressed legal online speech that contradicted its policy priorities, including criticism of covid misinformation spread by the government on topics like immunity, school closures, mask and covid vaccine effectiveness, vaccine injuries, and vaccine mandates. Given the recent failure of the Supreme Court to protect Americans against this threat to free speech rights, it is vital for Congress to act to secure the First Amendment. I am pleased that Sen. Paul has authored such a bill which will prohibit Federal employees and contractors from censoring legal speech. I encourage all law makers to support the bill,” said Jay Bhatthacharya MD, PhD., Stanford University and plaintiff in Murthy v. Missouri.

“Rights that cannot be vindicated in court are not rights at all. By closing the courthouse doors to Americans who are victimized by government censorship campaigns, Murthy invites the government to violate First Amendment rights at will—so long as it does so indirectly, utilizing numerous government agencies, rather than directly or through a single agency. Murthy essentially gives the government a blueprint on how to censor American citizens. This legislation says, ‘not so fast’,” said Bradley A. Smith, Chairman and Founder, Institute for Free Speech.

“As we inch closer to a crucial election in November, Congress should act swiftly to stop government censorship by proxy and protect Americans’ access to information. By restricting federal employees and contractors from encouraging platforms to suppress speech directly or indirectly, this bill is an important step in the right direction. Heritage Action applauds Sen. Paul for fighting government overreach and the weaponization of censorship on Big Tech platforms,” said Ryan Walker, Executive Vice President, Heritage Action.

“Let the people sue government officials who are working on the taxpayer dime to censor everyday Americans. Senator Paul is valiantly defending our Constitutional free speech rights. This bill is a no-brainer,” said L. Brent Bozell III, Founder and President, Media Research Center.

“Senator Rand Paul has introduced legislation allowing citizens to sue the federal government for censoring their speech, protecting First Amendment rights. For too long, federal entities have violated free speech using government power and funds. This bill ensures courts cannot dismiss these cases on standing grounds, preventing constitutional abuses. Senator Paul’s initiative is a crucial step in safeguarding free speech, a cornerstone of our free society,” said George Landrith, President, Frontiers of Freedom Institute.

“The Supreme Court’s failure to decide the Murthy v. Missouri case on the grounds that Missouri did not have standing in their attempt to protect their citizens against unconstitutional government censorship was a travesty. Senator Rand Paul’s introduction of legislation to provide states standing to sue on censorship cases would provide perhaps the only vehicle for broadly protecting free speech rights from the federal government coercing and suggesting censorship via corporate social media proxies. Americans for Limited Government proudly supports the Rand Paul legislation,” said Richard Manning, President, Americans for Limited Government.
​
“Senator Rand Paul has long been a champion of free speech and individual liberty, and this is on full display today with his legislation that will help preserve our freedoms that some in the federal government too often are trying to destroy,” said Vance Ginn, President of Ginn Economic Consulting and Former Chief Economist of the White House’s Office of Management and Budget.

“As social media has grown to allow Americans more free and unfettered speech online, there have been highly motivated efforts by government officials to limit speech online using both direct and indirect forms of coercion. This is a direct challenge to the spirit and future strength of the First Amendment. The Consumer Choice Center strongly supports Sen. Paul’s “Standing to Challenge Government Censorship Act” as a vehicle to end unconstitutional jawboning and hold public officials accountable when they aim to suppress public discourse and free expression online,” said Yael Ossowski, Deputy Director, Consumer Choice Center.

“The Standing to Challenge Government Censorship Act is a necessary corrective to the Supreme Court ruling that current law does not provide standing to victims of government-directed censorship to get their day in court. Congress should pass it quickly to allow citizens to appropriately defend their First Amendment rights,” said Phil Kerpen, President, American Commitment.

“No government should have the ability to control American free speech online or censor us from speaking. NetChoice applauds Sen. Paul for taking this important step to defend the First Amendment from government officials that abuse their power by trying to suppress open and free dialogue online. Sen. Paul’s bill makes it clear that Americans have the right to challenge the government for jawboning in court. NetChoice looks forward to working with Sen. Paul and the U.S. Senate to get this issue right so that Americans and businesses are protected from government interference when exercising their constitutionally-protected speech,” said Carl Szabo,Vice President & General Counsel, NetChoice.

“The recent decision in Murthy v. Missouri seemed to give government officials free rein to push social media companies to censor speech they dislike. Sen. Paul is stepping up to fix this by ensuring citizens have standing to sue when they do this. Free speech makes a comeback,” said Jim Hanson, Executive Director, America Matters.

Background:
On June 26, 2024, the Supreme Court ruled in Murthy v. Missouri, a landmark First Amendment case, that the plaintiffs did not have standing to seek an injunction against government officials who attempted to pressure platforms into censoring speech related to COVID-19. The court’s decision hinged on the plaintiffs seeking an injunction against future censorship, rather than compensation for past violations of their First Amendment rights. However, the plaintiffs would not have been able to seek compensation, even if they wanted to, as the Supreme Court has consistently refused to acknowledge a cause of action allowing individuals to seek compensation from federal officials for past First Amendment violations.

Like countless other Americans, Dr. Paul was also targeted by the pervasive censorship regime during the pandemic. In 2021, Dr. Paul posted a video on YouTube to educate the public about the potentially harmful consequences of relying on ineffective cloth masks to prevent the transmission of COVID-19. YouTube took down his video and suspended his account for a week. This blatant suppression of dissenting views led him to announce that he was quitting the platform and would henceforth post his content on Rumble.com. 

You can read the bill HERE. 

Originally published at American Institute for Economic Research.

​The Economist recently compared Joe Biden’s and Donald Trump’s economic records, concluding Biden wins so far. While the article raises valid points, it excludes key details that make the findings questionable. 

Ten months from now, there’s a high likelihood Biden and Trump could go head-to-head again for the presidency, especially after the results from the Iowa caucus. But voters should be informed about the effects of their policies on key issues like immigration, inflation, and wages. 

Starting with a divisive bang, let’s look at each leader’s track record concerning immigration. 

The Economist correctly noted that apprehensions along the southern border were much lower under Trump. They increased by the most in 12 years during the economic expansion of 2019, decreased early in the COVID-19 pandemic when people could be turned away for public health concerns, and rose again during the lockdowns. 

While some may see apprehensions rising between Trump and Biden as a loss for Biden, I see it as a loss for both. 

This metric is somewhat unreliable, given one person can be caught and counted multiple times, and those caught are a subset of total migrants. The truth is immigration is good for the economy, but government failures create unnecessarily complex barriers against legal immigration, contributing to the humanitarian crisis along the Mexico border today. 

Neither President has pushed for what’s needed (market-based immigration reforms) both lose. 

Inflation is another hot topic, especially for Biden. 

The Economist hands the win to Trump, as inflation was far lower during his presidency. But can we give him the credit? 
Remember, Trump pressured the Federal Reserve to reduce its interest rate target and expand its balance sheet, which was inflationary. His deficit spending skyrocketed during the lockdowns and was mostly monetized by the Federal Reserve, contributing to what was always going to be persistent inflation. Biden made this deficit spending and resulting inflation much worse. 

Add in the Fed’s many questionable decisions, such as doubling its assets, cutting and maintaining a zero interest rate target for too long, and focusing too much on woke nonsense, and we can see how this was always going to be persistent inflation.

But even the Fed’s latest projections indicate it won’t hit its average inflation target of two percent until at least 2026. Likely, it will cut the current federal funds rate target range of 5.25 percent to 5.5 percent three times this year, keep a bloated balance sheet to finance massive budget deficits, and run record losses. If so, this inflation projection is too rosy.

Some of Trump’s policies helped stabilize prices, including his tax and regulation reductions. But he still allowed egregious spending. Biden has doubled down on red ink that has contributed to the recent 40-year-high inflation rate.

While inflation has been moderating recently under Biden, Trump gets the win. Of course, neither Presidents nor Congress control inflation, as that job is the Fed’s, but its fiscal policies influence it.  

When it comes to inflation-adjusted wages, The Economist grants a tie. 

Let’s consider real average weekly earnings that include hourly earnings and hours worked per week, adjusted for the chained consumer price index, which adjusts for the substitution bias and has been used for indexing federal tax brackets since the Tax Cuts and Jobs Act of 2017.

Trump’s era witnessed a robust upward trajectory of real earnings, with considerable gains by lower-income earners, thereby reducing income inequality. We must acknowledge a real wage spike in 2020 during Trump’s lockdowns, marked by the loss of 22 million jobs and various challenges. To maintain a fair analysis, I disregard this spike.

A year later, real wages demonstrated a decline under Biden. Extending the timeframe to two years later, real wages remain relatively flat to slightly increased. 

To provide a contextual understanding, when we consider the trend under Trump, excluding the 2020 spike, real wages for all private workers or production and nonsupervisory workers fall below those observed during Biden. It’s worth noting, however, that these wages have been higher since 2019, albeit nearly stagnant for all private workers. 

Given real earnings, I agree with The Economist that Trump and Biden are tied. 

While much more can be said for each President’s policies, continuing to add context when making assessments is crucial.

I give Trump a nuanced “win” overall because his policies supported more flourishing during his first three years until the terrible mistake of the COVID lockdowns, with its huge, long-term costs. I should note that I made a strong case inside the White House for no shutdowns and less government spending but, alas, my efforts, and those by others, lost to Fauci, Birx, and Trump. 

Given the improved purchasing power during his presidency, Trump receives better poll ratings than Biden after three years of their presidencies. But this win doesn’t mean that Trump’s record is best regarding these issues, protectionism, and more. 

Let’s hope free-market capitalism, the best path to let people prosper, is on display this November, no matter who is on the ballot. 

​Thank you for reading the Let People Prosper newsletter, which today includes the 12th episode of "This Week's Economy,” where I briefly share insights every Friday on key economic and policy news across the country.
​
Today, I cover:
1) National: New Pew Research poll reveals that inflation is the top concern for Americans on both sides of the political aisle, Fed needs to do more, and financial markets remain loose;
2) States: New state-level jobs report and which states are leading and breakdown of the largest spending increase in Texas history and why it's not good for keeping the Texas Model strong; and
3) Other: The importance of educating young audiences on capitalism and socialism and my experience teaching with a "minimum wage" game to a group of high school students.

​You can watch this episode and others along with my Let People Prosper Show on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor. Please share, subscribe, like, and leave a 5-star rating!
​
For show notes, thoughtful insights, media interviews, speeches, blog posts, research, and more, check out my website (https://www.vanceginn.com/) and please subscribe to my newsletter (www.vanceginn.substack.com), share this post, and leave a comment.

​Today, I'm honored to be joined by Leslie Ford, adjunct fellow at the American Enterprise Institute’s Center on Opportunity and Social Mobility and a senior fellow with the Alliance for Opportunity.

We discuss:
1) The history of the war on poverty, how safety net programs have evolved, and where the war on poverty stands today;
2) How safety net programs can discourage upward mobility and keep people trapped in poverty through penalties such as those on marriage; and
3) Data on what requirements help safety net recipients achieve long-lasting self-sufficiency and prosperity, and more.
​
You can watch this interview on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor. Please share on social media, subscribe to your favorite platform and my newsletter, like it, and leave a 5-star rating.

​

• Leslie Ford is an adjunct fellow at the American Enterprise Institute’s Center on Opportunity and Social Mobility. She is also president of Ford Policy Solutions and a member of the State Board of Social Services at the Virginia Department of Social Services.
• Ms. Ford previously served in the White House as a domestic policy adviser and special assistant to the president from 2018 to 2020. During that time, she worked on the development of the Trump administration’s welfare and antipoverty strategic agenda and on reforms to US social safety-net programs. Before joining the White House, Ms. Ford was a legislative adviser to Sen. Mike Lee (R-UT). While working on Capitol Hill, she oversaw the development of 22 pieces of legislation and more than 50 amendments on significant bills to advance health and welfare reforms. Ms. Ford started her career at the Heritage Foundation.
• Ms. Ford has been published in the Wall Street Journal and National Review. She holds a BA from the Franciscan University of Steubenville.

Find show notes, thoughtful economic insights, media interviews, speeches, blog posts, research, and more at my website and here in my Substack newsletter. Please subscribe to this newsletter, share it with your friends and family, and leave me a comment.

On Wednesday night, the House passed what could be one of the worst debt ceiling deals in U.S. history, as it doesn’t provide the fiscal responsibility needed for suffering Americans. 

In fact, this deal perpetuates most of the same reckless policies that have contributed to stagflation, leaving Americans struggling financially. Despite what appears to be a relatively strong labor market, wages have failed to keep pace with inflation on an annual basis for more than two years. Homeownership has become unattainable for many, and higher prices have forced over half of the adult population to reduce their savings.

You would think that such widespread suffering would motivate Congress to reform its fiscal insanity, but apparently, that’s not the case. 

While 49 out of 50 states have a balanced budget amendment and most have a spending limit, there are no such rules at the federal level. The debt ceiling is the only mechanism, other than elections, that we have to keep Congress’ spending in check. 

By suspending the debt ceiling, we’re inviting more reckless spending, which is why our national debt has skyrocketed to a ridiculous amount of more than $31 trillion. The net interest on the debt alone will soon surpass $1 trillion.

The new debt ceiling bill allows politicians to kick the can further down the road of payment for the debt to our children and grandchildren to deal with later. By raising the debt ceiling for another two years and only imposing a one percent annual spending limit next year, there’s ample room for the debt and spending to continue to grow at an already bloated budget.
​
A more reasonable timeframe for suspending the limit would have been two months, giving Republicans and Democrats the opportunity to pursue essential spending restraint. Irresponsible spending is a bipartisan problem, but Republicans, with their majority in the House and a platform of fiscal conservatism, bear even greater responsibility to address this issue. 
Two years is an extensive period considering the adverse effects of the current national debt on inflation, interest rates, the U.S. dollar’s status, and the result of exacerbating the daily struggle of Americans to make ends meet, let alone pursue the largely destroyed American Dream.
Some argue that Congress should budget like a family. However, they should budget even more conservatively as Congress is entrusted with the hard-earned tax dollars of the public, not their own. Unleashing spending on out-of-control war efforts with the lack of major reforms and cuts where needed in the budget when our country teeters on the brink of financial crisis doesn’t promote individual liberty or economic growth.

​In the meantime, fiscal conservatives in Congress should continue advocating for a spending limit rule such as seen in the states to put an end to this crisis. A responsible budget that grows, if it grows at all, by less than the rate of population growth plus inflation, which represents the average taxpayer’s ability to afford spending, would be a great goal. 

Without substantial spending restraint, Americans can expect more suffering. As economist Milton Friedman once said, the ultimate burden of government is not how much it taxes but how much it spends. This debt ceiling bill was an opportunity to help reduce this burden, and we lost that. 

​Originally published by the Daily Caller. ​

​Today, I'm honored to be joined by economist and trusted public policy adviser Paul Winfree, who has served in top management and policy roles in the White House, U.S. Senate, and think tanks.
We discuss:

1. Lessons learned from his experience working in the White House during the Trump administration;
   
2. Tax, spending, and economic policies that need reform; and
   
3. Current economic concerns, including inflation, job growth, and government spending and the best path forward for a prosperous economy.
   

You can watch this interview on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor. Please share on social media, subscribe to your favorite platform and my newsletter, like it and leave a 5-star rating.

Paul Winfree is an economist and a trusted public policy advisor. He has served in top management and policy roles in the White House, the US Senate, and in think tanks.​

• He was a Distinguished Fellow in Economic Policy and Public Leadership at The Heritage Foundation. He is setting up a new organization that will focus on economic policy that will launch very soon.
• Winfree’s research focuses on US economic history, public finance, the political economy, the economics of media, and the economics of education. He is author of a book on the evolution of economic and fiscal policy from colonial America until the present called The History (and Future) of the Budget Process in the United States: Budget by Fire (Palgrave Macmillan, 2019).
• Before rejoining Heritage in 2018, Winfree was Deputy Assistant to the President for Domestic Policy, the Deputy Director of the Domestic Policy Council, and the Director of Budget Policy, all at the White House. During the 2016 Presidential Transition, Winfree led the team responsible for the Office of Management and Budget.
• Winfree holds a M.Sc. in economics and economic history from the London School of Economics and Political Science and a B.S. in economics from George Mason University. He will soon finish his Ph.D. in economics at Queen’s University in Belfast. 

Find show notes, thoughtful economic insights, media interviews, speeches, blog posts, research, and more at my website and in my Substack newsletter. Please subscribe to this newsletter, share it with your friends and family, and leave me a comment.

​In today's new episode of the "Let People Prosper" podcast, I'm thankful to be joined by Dr. Chuck Beauchamp for a thought-provoking discussion on new inflation numbers and the current economy.

​We discuss:
1) The newest inflation numbers and how the rate is impacting various markets including food, housing, and energy;
2) Interest rates' impact on the housing market and the crisis of affordability; and
3) Why the U.S. dollar's status could continue to wane and more.

You can watch this interview on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor (please share, subscribe, like, and leave a 5-star rating).

​Chuck’s bio:

• Dr. Charles "Chuck" Beauchamp is an Associate Professor of Finance in the School of Business at Mississippi College. Dr. Beauchamp joined MC’s faculty in 2016 and currently teaches Business Finance, Financial Modeling, and Financial Markets.
• His areas of expertise are working capital, business & corporate lifecycles, and how monetary policies affect corporate decision making.
• He is a contributing fellow for the Mississippi Center for Public Policy.

Find show notes, thoughtful economic insights, media interviews, speeches, blog posts, research, and more here at my website (https://www.vanceginn.com/) or Substack newsletter (https://vanceginn.substack.com). Please subscribe to the newsletter, share it with your friends and family, and leave me a comment.

The U.S. dollar will likely soon lose its status as the global reserve currency. The dollar’s global reserve dominance has declined in recent years. As a result,  international trade partners are hedging new connections. This will restructure the global economic order and create challenges ahead, especially for middle-class Americans.

Americans should know what’s happening and how they can prepare for this possibility. But first, what does it mean to be the world’s global reserve currency, and why does it matter? 

The U.S. Dollar is the dominant global reserve currency. It’s widely accepted and is the preferred medium of exchange for international transactions. The dollar has enjoyed this status for the past 80 years due to its strong reputation acquired across a long history of America’s rising military prowess, fulfilling its financial obligations, and maintaining a strong economy.

These institutional foundations of the dollar created high demand among foreign entities. One of the most important transactions utilizing the dollar is the purchase of oil. Oil is currently priced in dollars globally and other dollar-denominated assets. Losing or weakening the dollar’s position and value results in higher oil prices. 

The dollar’s elevated demand has helped keep its value high relative to other currencies. This prompted many countries to tie their currency directly to our dollar. The U.S. benefited by leveraging foreign demand for dollars into loans to the U.S. federal government. Foreign investors lend the U.S. high volumes of money because of the debt’s dollar denomination. 

The higher demand for U.S. Treasury securities pushes down domestic interest rates. This influences lower rates on mortgages and business loans, which help provide increased investment and economic growth. Losing or weakening the dollar’s reserve position will result in increased interest rates, decreased investment, and weak to negative economic growth. 

The dollar’s reserve status has also meant an increased volume of international trade. Ultimately, international trade helps keep interest rates and inflation moderately low. Losing or weakening the dollar’s reserve position will result in increased inflation. 

Trouble for the dollar is on the horizon. 

The once-givens about the dollar have come into question recently due prominently to excessive deficit spending. Foreign investors are reducing their demand for dollars as they diversify their portfolios. This combination contributed to the ballooning of the debt, depreciated the dollar, led to higher inflation and falling year-over-year real average weekly earnings for 25 straight months, and drove up interest rates, thereby slowing economic activity. 

Of course, this will have tradeoffs and many of them won’t be good.

As mentioned, the major tradeoffs will be higher inflation and interest rates. The latter will trigger a move by the Federal Reserve to attempt to lower interest rates. But if its target rate is held below what markets dictate, the Fed will monetize the debt, increase the money supply, and drive inflation higher. The long-term result will be even higher interest rates to tame inflation.

Unfortunately, the consequences of higher interest rates and inflation would be severe. People should expect higher mortgage rates than the already rising average rate of 6.4%. This is the highest in 15 years. Ultimately, higher interest rates would result in a steeper contraction in the housing market, exacerbate economic weakness, increase job losses, and worsen poverty.

But maybe more importantly, it would likely crush middle-class Americans and the lifestyle that they’ve been accustomed to having for decades. The higher cost of shelter, food, gasoline, and energy as the dollar loses its reserve currency status would wreck havoc on their budgets and force major decisions about what’s best for their families. This could mean having to put off saving for college, going on vacations, and living in much smaller homes. 

All because our government couldn’t spend our money wisely. Therefore, the government should take serious steps to restore confidence in the dollar before a bad situation for Americans becomes worse or irreconcilable.

To start, the federal government should reduce deficit spending. The long-term goal should be a balanced budget and an eventual start to paying down the debt. This will be pro-growth as the government stops redistributing taxpayer money from productive to unproductive activities. It will also strengthen the fiscal and economic situation of the U.S. The result will be an improvement in foreigners’ outlook on the dollar that would help preserve the dollar’s status.

Dollar-focused policies should be tied to reducing the money in circulation. This should occur as the Federal Reserve reduces its balance sheet. Doing so tames inflationary pressures and could even result in some disinflation. This would allow the hard-earned dollars of Americans to go further than they do today. 

These policy improvements should be put into law with fiscal and monetary policy rules. The rules should remove the discretion of big-government spenders and printers. This would enable people’s livelihoods to get back on track and improve for generations.    

The potential loss of the dollar’s reserve currency status could have significant economic consequences, and there are even more than highlighted here. There is, however, reason for optimism: The U.S. economy is resilient and adapts well to challenges. But will those in D.C. allow for that to happen in the dynamic marketplace? Time will tell. But let’s hope so before it’s too late for middle-class Americans and everyone else to have the opportunity to fulfill their hopes and dreams.

Originally published at The Daily Caller with Chuck Beauchamp, Ph.D.

​Thank you for checking out the 8th episode of "This Week's Economy,” where I briefly share insights every Friday on key economic and policy news across the country. Subscribe to receive new posts and support my work. 

Today I cover:
1) National: Breaking down the latest report on CPI inflation and how it relates to real average weekly earnings, what’s going on with the debt ceiling debate, and why the Fed should continue to raise its interest rate target and cut its balance sheet;
2) States: ALEC's newest "Rich States, Poor States" report findings related to where Texas stands in comparison with Utah and Florida, what the legislatures are doing late in the sessions of Texas (here), Louisiana (LA jobs report and tax relief), and elsewhere; and
3) Other: New findings on the importance of work-life balance, the value of the U.S. dollar, and more.

​You can watch this episode and others along with my Let People Prosper Show on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor (please share, subscribe, like, and leave a 5-star rating!).

For show notes, thoughtful insights, media interviews, speeches, blog posts, research, and more, continue to check out my website (https://www.vanceginn.com/) and please subscribe to my Substack newsletter (https://vanceginn.substack.com).

The hearing is scheduled for today at 10 am ET at Longworth House Office Building: Hearing on the U.S. Tax Code Subsidizing Green Corporate Handouts and the Chinese Communist Party. 

Below is the video of the full hearing (my statement starts at time 27:30 with other comments throughout the 4-hour-long hearing).

And below that is my written testimony based on this recent research on The Inflation Reduction Act's Costly New Tax Credits for Electric Vehicle Batteries and the policy brief.

​Executive Summary
The U.S. Congress passed and President Biden signed into law the so-called “Inflation Reduction Act” (IRA) in August 2022. The IRA includes many provisions which are now estimated to cost $1.2 trillion over a decade per Goldman Sachs’ more recent analysis compared with the Congressional Budget Office’s (CBO) initial estimate of $391 billion.

Part of this substantially higher estimated cost is because of the new cost estimates for tax credits for electric vehicle (EV) battery cells and modules manufactured in the U.S. Instead of the initially estimated cost of $30.6 billion by the CBO, new estimates based on more precise projections and growth in the EV market indicate that this could be as high as $196.5 billion (540% higher than initially estimated) per the Mercatus Center and Goldman Sachs. This higher estimate appears more accurate than the original CBO estimate given the large increase in the EV market and the expanding use of these tax credits.

Given that the cost of these subsidies passed by Congress and communicated to the public appears to be substantially undervalued, the CBO and other nonpartisan agencies and committees responsible for providing Congress with accurate revenue estimates and sound economic analysis should reexamine their calculations.

​Originally published at Americans for Tax Reform.