Affordability remains one of the biggest challenges facing American families.

While inflation has come down from its peak, prices remain far higher than they were just a few years ago. Housing costs are elevated, insurance premiums continue rising, groceries cost more, and many households are relying on credit cards simply to make ends meet.
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The result is a troubling milestone: Americans now carry a record $1.25 trillion in credit-card debt, according to the Federal Reserve Bank of New York.

A recent Wall Street Journal article, “Americans Are Falling Behind on Their $1.25 Trillion Credit-Card Bill,” highlighted the growing financial stress facing households across the country. The article documented the problem well, but I believe it missed an important part of the story.

Too often, higher credit-card interest rates are blamed on banks. But banks do not operate in a vacuum. Interest rates throughout the economy are heavily influenced by Federal Reserve policy, and lenders must account for both their cost of funds and the risk of lending.

In short, the rise in credit-card rates is largely a consequence of inflation, monetary policy, and increasing delinquency rates—not simply the actions of banks.

I submitted the following letter to the WSJ editor in response (WSJ couldn’t use it).

Letter to the Editor

Your article, “Americans Are Falling Behind on Their $1.25 Trillion Credit-Card Bill,” highlights the financial stress many households face but misses a key reason credit-card interest rates have risen so sharply: Federal Reserve policy.

Credit-card rates are typically tied to the prime rate, which closely follows the federal funds rate set by the Fed. As the central bank raised interest rates to combat the inflation created after years of excessive monetary expansion, borrowing costs increased throughout the economy. Credit-card rates rose with them.

Banks are not arbitrarily charging higher rates. They must price credit according to their cost of funds and the risk of lending. Rising delinquency rates and higher funding costs have made unsecured consumer lending more expensive.

Blaming banks for higher credit-card rates confuses cause and effect. The real story is that inflation and aggressive monetary tightening have left Americans paying more to borrow. If policymakers want lower borrowing costs, they should focus on restoring sound money and price stability rather than attacking lenders that are responding to market conditions.

Vance Ginn
Round Rock, Texas

What Policymakers Should Learn

The growing burden of credit-card debt is not merely a consumer finance story. It is a reminder that bad fiscal and monetary policy eventually reaches kitchen tables across America.

When Congress spends too much, deficits grow. The Federal Reserve often monetizes some or all of the deficit leading to inflation. The Fed often tries to clean up the mess from government failures. Families then pay the price through higher prices, higher interest rates, or both.

If we want Americans to have more opportunity to build wealth and less need to rely on debt, policymakers should focus on the root causes.

Three Takeaways for Policymakers

1. Sound money matters.

Price stability is essential for long-term prosperity. Inflation acts as a hidden tax that disproportionately hurts working families and those living paycheck to paycheck.

2. Fiscal restraint supports affordability.

Federal spending should grow no faster than population growth plus inflation. Excessive government spending contributes to inflationary pressures that ultimately make life more expensive.

3. Focus on causes, not scapegoats.

Higher borrowing costs are often the result of broader economic conditions, not simply the decisions of lenders responding to market signals.

The Bottom Line

Americans are struggling with affordability, and many are turning to credit cards to bridge the gap. But blaming banks for higher interest rates misses the bigger picture.

The real challenge is restoring the conditions that allow families to prosper: sound money, responsible budgeting, lower inflation, stronger economic growth, and greater opportunities to build wealth.

If we want lower borrowing costs tomorrow, we need better fiscal and monetary policy today.

​In Episode 198 of the Let People Prosper Show, I sit down with Jack Salmon of the Mercatus Center to discuss one of the most important lessons in state policy: people respond to incentives.

Politicians often claim they can raise taxes only on “the rich” without consequences. But high earners, entrepreneurs, and capital are increasingly mobile. When states raise taxes too aggressively, they risk driving away investment, weakening their tax base, and creating deeper fiscal problems over time.

This episode covers tax migration, wealth taxes, Washington State’s new high-income tax, state competitiveness, and why spending restraint is the foundation of sustainable fiscal policy.

The better path is clear: lower and flatter taxes, disciplined spending, economic freedom, and policies that attract people rather than punish productivity.

Watch or listen to Episode 198 on YouTube, Apple, or Spotify, and get show notes at vanceginn.substack.com. 

Originally published on Substack. 

​Prices Hit Home

The latest Consumer Price Index report should end the fantasy that inflation is gone. March CPI jumped 0.9 percent in a single month, and the 12-month headline rate rose to 3.3 percent. Core CPI increased 0.2 percent in March and 2.6 percent over the past year. Even by the cleaner measure, inflation is still running above where price stability should be. The Federal Reserve’s long-run inflation target is 2 percent, measured by PCE, not CPI, but the point remains the same: prices are still rising too fast, and families know it.

Inflation always hurts working families first and worst. When prices rise faster than paychecks, people do not need a lecture from Washington about “resilience.” They need relief. Instead, they get shrinking purchasing power, tighter budgets, delayed purchases, and more debt. They feel poorer because bad policy is making them poorer.

Weak Labor Signals

This would be bad enough if the economy were otherwise humming along. But it is not. Inflation moving higher while job growth weakens is the kind of combination that should make every policymaker nervous. That is how stagflation creeps back into the conversation: not all at once, but through a steady mix of higher costs, weaker confidence, and slower growth.

The bigger problem is that Washington keeps feeding the fire instead of putting it out.

The Fed’s Long Shadow
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Start with the Federal Reserve. The Fed’s total assets were $6.694 trillion as of April 8, according to FRED’s WALCL series.

That matters because a bloated central bank balance sheet is not neutral. Years of extraordinary intervention distorted asset prices, encouraged misallocation of capital, rewarded leverage, and helped fuel the inflationary pressures Americans are still dealing with. Easy money always looks clever on the way up. Then families get the bill on the way down.

There should be a rule to reverse this. The Fed’s balance sheet should be put on a predictable path back toward roughly 6 percent of GDP over time, absent a true emergency. Emergency tools should not become permanent habits. Monetary policy should not be a standing engine of distortion. Sound money requires rules, restraint, and humility.

Tariffs Raise Costs

Then there is trade policy. Tariffs are taxes on Americans. They raise input costs for producers, increase prices for consumers, and create uncertainty for businesses trying to plan investment and hiring. There is no magic here. Protectionism does not create prosperity. It redistributes pain and calls it patriotism.
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That is especially damaging at a time like this. When inflation is already too high and growth is already soft, piling more costs onto supply chains is economic malpractice. Businesses do not absorb these costs out of kindness. They pass them through, delay expansion, or cut back elsewhere.

Overspending Adds Fuel

Fiscal policy is no better. Washington has spent years overspending up to $7 trillion per year, subsidizing consumption, picking winners, and pretending deficits do not matter. The result is exactly what basic economics would predict: weaker incentives for productive investment, higher interest costs, and a more fragile growth outlook.

This is where the case for fiscal rules matters. I have long argued for a spending limit based on population growth plus inflation so government grows no faster than the private economy can sustain. Spend above that, and you get what we have now: bloated budgets, more debt, and less room for families and businesses to thrive. Fiscal discipline is not austerity. It is the minimum requirement for sanity.

War and Uncertainty

Add wars and geopolitical instability to this mess and the risks multiply. Conflict disrupts energy markets, rattles supply chains, clouds business expectations, and makes already-high prices even more volatile. At the same time, policy uncertainty from tariffs, deficits, and regulatory swings freezes hiring and investment. Businesses sit on their hands when Washington cannot stop moving the goalposts.

That is how families get squeezed from every direction. Prices rise. Growth weakens. Job prospects soften. Confidence fades. And the people who caused much of the mess ask for even more power to manage it.

Less Government, More Prosperity

None of this should be surprising. Government tried to print prosperity, spend prosperity, and tariff its way to prosperity. It failed. Again.

The answer is less government. That means monetary rules instead of discretion, spending restraint instead of endless deficits, open markets instead of tariffs, and a foreign policy that understands war is costly in both lives and living standards. Families do not need more central planning. They need room to work, save, invest, and build.

I have made this case in my writings for years because the lesson keeps proving true: prosperity comes from free people and free markets, not from Washington trying to micromanage the economy. Inflation is not just a statistic. It is a policy failure with a grocery bill attached.

Closing Thoughts

March’s CPI report is a warning. Inflation is still too high. The Fed is still far from restored normality. Washington’s tariffs, overspending, and war-driven uncertainty are making the outlook worse, not better. If policymakers want to help families, they should stop distorting markets and start shrinking government.

Subscribe to Let People Prosper on Substack and stay engaged. Share this with someone who is tired of paying for Washington’s mistakes, and follow along for more analysis on how we can restore sound money, rein in spending, remove barriers to growth, and let people prosper.
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Three key takeaways for policymakers

• Restore a monetary rule. Inflation is still above the Fed’s 2 percent target, and the balance sheet remains massively elevated at about $6.7 trillion. The Fed should follow a rules-based path that steadily normalizes its footprint and gets the balance sheet back near its pre-2008 norm relative to GDP of 6%.
• Adopt a fiscal rule. Federal spending should reduced then capped to grow no faster than population plus inflation. That is the surest way to stop chronic overspending, reduce inflationary pressure, and protect taxpayers from government that keeps growing faster than the real economy.
• End cost-raising intervention. Tariffs, subsidies, and war-driven uncertainty raise prices and weaken growth. The better path is simple: less government, freer markets, stronger incentives to produce, and more room for families to prosper.

Originally published at InsideSource's DC Journal.

Families and businesses are already squeezed by high borrowing costs and tighter credit; Washington should not be making lending even harder. Yet, that is what the earlier Basel III endgame push risked doing.

The good news is that the Federal Reserve’s revised capital proposal is a meaningful improvement. It does not abandon safety and soundness. It does something smarter. It takes a more evidence-based approach and reflects a more accountable regulatory process than the prior version.

That matters because bank capital is important, but capital is not free. Strong capital buffers help banks absorb losses. When regulators require banks to hold more capital than actual risk justifies, they make lending more expensive and less available. That affects more than bank balance sheets. It affects small-business financing, mortgage credit and private investment.

When Washington overregulates bank capital, Americans pay for it through tighter credit and weaker growth. What makes this proposal better is not just that it may reduce some burdens. It is that the agencies appear to have learned from the last failure.

The Fed’s fact sheet says the new proposals result from a “comprehensive, bottom-up review” of the capital framework designed to ensure requirements are appropriate and do not create unintended effects. It also says regulators considered overlaps among requirements and sought to mitigate them where appropriate. That is what accountable rulemaking should look like.

Washington rarely works that way. Too often, regulators act first, overreach second and justify later. This time, at least to some degree, they reassessed the evidence and adjusted course.

The agencies say the proposal would streamline capital requirements and better align regulatory capital with risk. That is the right goal. A free-market approach does not mean no rules. It means rules should be limited, targeted and tied to actual risks rather than to broad bureaucratic instincts to tighten control just because it sounds tough.

That is why Federal Reserve Vice Chair of Supervision Michelle Bowman’s March 12 speech at the Cato Institute mattered. She previewed changes that would “eliminate overlapping requirements,” “right-size calibrations to match actual risk,” and produce “more efficient regulation.” She also made the broader point that banks should be “better positioned to support economic growth” while preserving safety and soundness. That is a much healthier way to think about regulation than the old one-size-fits-all approach.

Here is the most important point for lawmakers: Even the Fed’s GSIB surcharge proposal now acknowledges that if regulators overestimate systemic risk, they can discourage banks from engaging in productive economic activity and lead to the under-provision of financial services.

The proposal goes further, stating that more accurate surcharges would likely reduce marginal funding costs and could enable some large banks to increase economic activity and the supply of financial services. It even cites empirical evidence that lower GSIB surcharges could increase loan supply.

That is a fancy regulatory way of acknowledging a basic market truth: overregulation restricts credit, while smarter regulation helps capital flow to productive uses.

This is not some narrow fight about bank lawyers and compliance manuals. Credit is the lifeblood of a growing economy. Families need it to buy homes.

Entrepreneurs need it to start businesses. Employers need it to expand payrolls and invest in equipment. When regulators make capital unnecessarily costly, they are not just “being tough on banks.” They are making it harder for the private economy to work.

None of this means the job is finished. Basel III remains a sprawling framework, and regulators should continue to simplify rules, tailor them to bank size and risk profile, and avoid one-size-fits-all standards that ignore the diversity of the banking system. Community banks, regional lenders, and the largest global institutions are not the same. Pretending otherwise is one of the oldest mistakes in financial regulation.

Still, this proposal deserves support. Not because it is perfect but because it is better. It reflects more humility, more evidence and more accountability than the earlier version. That is good for banks, good for borrowers and good for growth.

Originally published on Substack.

President Trump’s State of the Union speech of a record 108 minutes last night had something Washington too often forgets: confidence.
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After years of Americans being told to lower expectations, it was refreshing to hear a president speak as if this country can still build big things, lead the world, and win the future.

That tone matters. Americans are tired of being scolded by technocrats while their bills climb. They want to hear that the country is capable again.

But here’s the hard truth: a confident tone is not a governing strategy.

If the goal is rising living standards, the next step has to be less government interference, not new versions of it.

Too much of what passes for “action” in Washington is still about pulling levers, picking winners, adding controls, and expanding federal “help” that quietly raises prices and limits choice.

Classical liberals, like me, have warned about this for a reason: the levers don’t make people freer. They make people dependent.

The best version of this presidency—and the best version of America—is a future-first agenda with one true north star: let people prosper.

If you want the whole framework in one place, start with my policy guide.

Keep America leading on innovation

The speech signaled that the United States should stay on offense in innovation, especially on AI.

That is the right instinct. America doesn’t win by copying Europe’s regulatory mindset.

We win by letting entrepreneurs scale, compete, and deliver products that make life better and cheaper. That consumer-driven approach is why I’ve pushed an innovation-first approach instead of politicized crackdowns on success.

Call out broken systems—but fix them the market way

It’s also good to acknowledge what voters already know: the economy isn’t “rigged by accident.”

Too many industries are distorted by government-created barriers and entrenched middlemen.

Calling problems out is useful. The danger is when the “fix” becomes another layer of bureaucracy that never goes away. Government rarely shrinks itself. It multiplies.

What was missing: the future-first, classical liberal playbook

1) Spending discipline should be the opening line, not an afterthought

Washington cannot keep running up massive tabs and pretend it isn’t part of the cost-of-living squeeze.

Excessive spending distorts markets, pushes up borrowing, raises interest costs, and entrenches inflation expectations. It also turns every other priority into a gimmick fight because lawmakers refuse to address the root.

This is why the real threat is not that Americans keep too much of their own money. The real threat is that government spends too much of everyone’s money.

That’s the core point behind spending-driven debt and why sustainable budgeting needs to be the baseline.

If you want a practical model, look at how fiscal guardrails work in the states and why they matter for stability.

I’ve laid that out in sustainable budgeting and in the case for a serious federal reset like the responsible budget.

A future SOTU should say this plainly: we will cut and cap federal spending growth, eliminate budget gimmicks, and make prosperity possible again by letting the private economy breathe.

2) Tariffs are taxes—even when they sound tough

A future-first agenda doesn’t tax Americans through tariffs and call it strategy. Tariffs are taxes. Taxes raise prices. They hit families at checkout and hit producers through higher input costs. Then politicians act shocked when prices rise and growth slows.

If the goal is abundance, you don’t choke supply chains with border taxes. You cut domestic barriers to production. That’s why I keep hammering the simplest truth in economics: tariffs raise costs.

I’ve also warned how tariff escalations create uncertainty and squeeze working households in trade-war reality and why politicians keep failing the basics of Econ 101.

A pro-worker trade policy is not “tax the things you buy.” It’s “make it easier to produce here”—permitting reform, energy abundance, lower regulatory costs, and predictable rules.

3) Tax cuts should be broad, neutral, and sustainable—not swapped for hidden taxes

Broad-based income and corporate tax cuts can lift work, investment, and wages. The key is broad-based. Targeted carveouts and special breaks aren’t prosperity. They’re politics.

But even good tax cuts fail when spending restraint is absent.

If Washington refuses to control spending, tax cuts become temporary and debt becomes permanent. That’s why tax reform without restraint isn’t reform—it’s a short-lived headline.

And no, tax cuts should not be “paid for” with higher tariffs. That’s not relief.

A serious future SOTU would commit to a simple order of operations:

• cut and cap spending growth first,
• then deliver broad-based tax relief,
• and keep the base broad so everyone wins.

4) Healthcare reform should empower patients, not import price controls

Healthcare is expensive because patients aren’t treated like customers. Prices are hidden, incentives are distorted, and middlemen dominate the rails.

That’s why the continued attraction to “Most Favored Nation” drug pricing is a red flag.

MFN is price control—importing foreign government benchmarks into U.S. pricing.

Price controls may look like “savings” on paper, but the real cost shows up later as weaker incentives to innovate, slower launches, fewer trials, and less access over time.

I’ve been direct about the damage from MFN price-setting.

If the goal is to expand access and lower costs, we should push competition, transparency, faster approvals, and direct purchasing models that increase consumer choice—not bureaucratic formulas that reduce the incentive to develop tomorrow’s cures.

The same principle applies to PBMs: the middleman problem is real, but bans and mandates can backfire if incentives stay broken.

That’s why I’ve argued that PBM bans backfire and why reforms should focus on restoring market pressure, not replacing one distortion with another.

5) Housing needs supply—not scapegoats, caps, or punishment taxes

Housing may be the clearest example of the difference between serious policy and political theater.

Housing is expensive because we didn’t build enough for decades. Zoning limits, permitting delays, and process abuse restrict supply. Then politicians look for villains instead of looking in the mirror.

Restricting institutional investors won’t build a single home. Punitive taxes and ownership caps shrink rental options, discourage rehab, and risk rushed sell-offs that displace renters and destabilize neighborhoods.

The real solution is to build, build, build: streamline permitting, reduce zoning barriers, speed up approvals, and stop turning housing into a legal obstacle course.

My market-first framework is in expanding supply.

And the truly “future” housing reform Washington avoids is unwinding federal distortions that socialize risk and politicize credit.

That includes finally privatizing the mortgage giants so housing finance is driven by market signals rather than permanent federal dominance.

6) Sound money means respecting price signals—including interest rates

Interest rates are prices. Artificially forcing them down is how you set up the next bust.

When policymakers manipulate the price of credit, they create malinvestment, bubbles, and painful corrections later.

I’ve written about the Fed’s role in boom-and-bust dynamics and the distortions created by monetary manipulation—how easy money changes investment patterns before reality catches up.

If you want the clearest articulation of the mechanism, see the argument about the Fed’s boom-bust cycles and why inflation pessimism is driven by policy failure, not public “misunderstanding,” in my work on inflation and rate hikes.

A future SOTU should commit to sound money principles and fiscal restraint so rates are not constantly being used as a political pressure valve.

7) Family policy should build independence, not dependency

Washington loves programs that sound pro-family and end up being pro-bureaucracy. “Accounts,” credits, subsidies, and new federal benefit pipelines might poll well, but they often expand dependency and deepen the tax-and-transfer state.
A better family agenda is pro-growth: higher real wages through productivity, lower prices through competition, and more opportunity through less red tape.

That’s why I’ve pushed back on federal social engineering through the tax code and gimmicks that avoid the spending problem.

My conversation on the risk of Washington-designed “Trump accounts” is captured in fiscal reality.

The next SOTU I want to hear: a true north star “Let People Prosper” address

If I could write next year’s State of the Union for a president who wants a booming America, it would be a forward-looking abundance agenda—not a nostalgia tour, not a grievance list, not a government expansion dressed up as toughness.

Here is what I would want to hear—policy by policy—built around a simple principle: the federal government should stop making life harder and start getting out of the way.

1) A binding commitment to spending cuts and limits

Not “we’ll find savings.” Not “we’ll cut waste.”

A real commitment to spending cuts and future growth limits that keep government from growing faster than average taxpayer’s ability to fund it.

A pledge to end budget gimmicks, stop treating “emergencies” as permanent, and set a path to fiscal sustainability. The blueprint is in the policy guide and the spending logic is in the case for fiscal sanity.

2) Broad-based tax relief that lasts because spending falls

I want a president to say: we will cut tax rates broadly and keep the base broad.

But we will not fund tax relief with hidden tax hikes like tariffs. We will fund it by shrinking the growth of government itself.

That’s how you deliver lasting relief rather than a temporary sugar high. The warnings are already clear in spending-first reform and durable tax reform.

3) A real abundance plan: deregulate production across the economy

A future SOTU should treat regulation like what it often is: a hidden tax that raises prices, blocks competitors, and protects incumbents.

That includes:

• permitting reform so energy, housing, and infrastructure can be built,
• faster approvals for innovation,
• and rolling back rules that restrict supply.

This is what pro-growth leadership looks like: not micromanaging prices, but freeing the economy to produce more.

4) A clean break from tariff-tax politics

I would want to hear a simple pledge: we will not raise tariffs to “solve” domestic problems.

We will compete through productivity, innovation, and free exchange. We will stop using emergency powers to raise taxes without accountability.

That’s the principle behind my argument that ending tariffs is pro-worker and why policymakers must stop failing basic economics.

5) Healthcare reform that makes patients the customers again

The future SOTU should reject price controls outright—MFN included—and instead commit to reforms that expand competition:

• transparent pricing,
• portable, consumer-driven options,
• direct purchasing,
• and faster, cheaper pathways for innovation.

If you want the cautionary tale, see price-control harm. If you want the middleman warning, see why bans fail.

6) Housing reform focused on supply—and federal distortions

I want a SOTU that says: we will stop blaming investors and start building homes.

Federal policy should encourage supply, not choke it. States and localities should streamline permitting and stop weaponizing zoning.

And Washington should stop doubling down on a government-directed mortgage system that distorts incentives. That means ending permanent federal dominance and restoring market pricing in housing finance.

7) Sound money and a Fed that stops fueling cycles

A future SOTU should acknowledge a reality too many leaders avoid: boom-and-bust cycles aren’t acts of God. They’re often policy-driven.

A better economy requires predictable rules, fiscal restraint, and monetary sanity.

That includes getting serious about how credit manipulation fuels cycles—see the case for limiting the Fed’s monetary weapon.

8) A freedom-first governance pledge

Finally, I want to hear the simplest promise a leader can make to restore trust: government will serve the people by doing less—protecting rights, enforcing the rule of law, and leaving voluntary exchange alone.

That’s the only sustainable path to prosperity, the only path compatible with a free society, and the only path that keeps the American experiment worth inheriting.

Call to action

If you want policy that is serious about prosperity and honest about tradeoffs, subscribe and follow my work at Ginn Economic Consulting at vanceginn.com.

I’ll keep offering the true north star Washington rarely does: let people prosper—with more competition, more supply, and less government in the way.

​Five-point review for lawmakers

• Cap federal spending growth and adopt sustainable budgets that make reforms last.
• Reject tariff hikes and other hidden taxes that raise prices for families and producers.
• Cut tax rates broadly only alongside spending restraint, not tax swaps.
• Stop healthcare price controls like MFN and push competition and transparency.
• Fix housing by building and expanding supply, not scapegoating investors.

Thank you for reading. Subscribe today.

Originally published on Substack. 

The latest headlines tell you everything: regulators are again inching toward a fresh round of “Basel endgame” capital rules, while the Fed talks about reshaping mortgage capital treatment, and the CFPB’s “open banking” experiment keeps bouncing between litigation, reconsideration, and procedural shortcuts.

Translation: Washington is still trying to run the financial system like a command economy, then acting shocked when credit tightens and consumers pay more.

If you want a clean, practical framework for pushing back, start here: the Monetary Policy and Financial Regulation Guide. It’s built for lawmakers and staff who want fewer slogans and more solutions.

The real banking fight

Most “banking reform” debates are not really about safety. They’re about who controls the pipes.

When regulators add complexity and discretion, the winners are predictable:

• the biggest institutions that can afford compliance armies
• the biggest regulators who gain leverage through ambiguity
• and the political class that gets a new lever to pull when they want outcomes the market won’t deliver

Everyone else gets the bill: tighter credit, fewer local options, and financial “innovation” that is mostly just lawyers inventing ways around red tape.

Three fights that matter right now

1) Debanking is an incentive problem created by government power

People hear “debanking” and assume it’s purely corporate behavior. But banks respond to the incentives regulators set. If supervisors can punish “reputation risk” or nudge account closures through informal pressure, banks will de-risk, even when the activity is lawful.

That’s why the push to remove “reputation risk” from supervision and prohibit regulators from using politics or lawful-but-disfavored activity as a cudgel is a big deal. The point is not to give anyone a free pass for fraud. The point is to stop financial access from turning into a soft form of social credit scoring.

The free-market fix is boring, and that’s the beauty of it: clear rules, due process, transparency, and fewer “because we said so” powers.

2) “Open banking” can become forced sharing, higher fraud risk, and higher fees

The CFPB’s Section 1033 agenda is marketed as consumer empowerment, but the tradeoffs are real: mandated data portability at scale can widen the attack surface for bad actors and raise compliance costs that ultimately land on consumers.

Even the Congressional Research Service notes the CFPB’s final rule has been tied up in litigation and reconsideration, with implementation originally set to begin in April 2026.

A market-friendly approach is not “no data sharing.” It’s voluntary, secure, contract-based sharing with clear liability. If policymakers want competition, they should stop trying to central-plan it.

3) Basel endgame rules risk turning banks into regulated utilities

Capital matters, but capital is not free. Every extra layer of risk-weighting and modeling can mean less lending at the margin, especially for households and small businesses that do not fit neatly in a regulator’s spreadsheet. Reuters reports regulators have taken steps toward proposing a new version of Basel endgame rules, and the Fed has also signaled changes around mortgage capital treatment.

If Washington wants more mortgage lending and more access to credit, it should stop designing rules that make banks act like cautious bond funds. A safer system is not one where credit disappears. A safer system is one where risk is priced honestly, failure is possible, and bailouts are not assumed.

What this guide does differently

My policy guide ties these debates together with a simple theme: stop subsidizing bad incentives, stop politicizing access to money, and stop pretending regulators can outsmart millions of market decisions.

It also pushes something Washington never wants to discuss: many “banking crises” are downstream of upstream monetary and fiscal mistakes.

When money is distorted and deficits are monetized, the system gets fragile, then regulators blame banks for living inside the warped environment government created.

Review for lawmakers

• Use the Monetary Policy and Financial Regulation Guide as the baseline for hearings, bill language, and oversight questions. Keep the PDF on your desktop.
• On “debanking,” reduce discretionary supervision by eliminating politicized “reputation risk” tools and requiring transparent, rules-based enforcement.
• On “open banking,” protect consumer control without forced sharing: prioritize consent, security, and clear liability over one-size-fits-all mandates.
• On Basel endgame, demand honest cost-benefit analysis, including impacts on credit availability, small businesses, and community banking diversity.

A simple standard

Here’s the test every proposal should pass: does it increase competition and consumer choice, or does it centralize power in regulators and mega-institutions?

If it centralizes power, it will be sold as “safety.” Then it will show up as higher costs and fewer options. Funny how that works.

For more on these issues, my writings keep tracking the fights that matter, with receipts and real-world policy fixes.

Originally published at The Mackinac Center. 

​President Trump recently urged Congress to cap credit card interest rates at 10%, arguing that rates of 20% or 30% are abusive and that the government should step in to protect families.

The good news is that, at least for now, many Republicans in Congress are pushing back. Lawmakers are warning that government price controls on credit would restrict access and hurt consumers rather than help them.

That skepticism matters because this debate is bigger than one proposal. It reflects a deeper misunderstanding about how credit markets work and why controls on the price of credit consistently fail.

Credit exists because lenders take risks. Some borrowers repay on time. Some don’t. Some have stable incomes. Others don’t. Those differences are real, and they matter.

Interest rates exist to reflect that reality. They are prices, not moral judgments. They reflect the time value of money, the risk of nonpayment, inflation, and opportunity cost. Lending money today means it cannot be used elsewhere tomorrow.
Capping interest rates does not remove risk. It prevents risk from being priced. When that happens, lenders don’t lend more. They lend less, especially to those who need it the most.
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Supporters of rate caps often point to the amount of debt Americans carry. According to the Federal Reserve Bank of New York’s Household Debt and Credit data, total household debt is about $18.6 trillion, including roughly $1.2 trillion in credit card balances, which make up about 20 percent of all non-housing debt.

Source: New York Fed

Those numbers are large, but large numbers alone don’t indicate failure. What matters is whether borrowers are defaulting at alarming rates. An increase in unpaid and overdue balances would indicate that creditors were encouraging people to take on too much debt.
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On that front, the picture is serious but not catastrophic. About 12.4 percent of credit card balances are seriously delinquent, meaning they are 90 or more days past due. That’s higher than during the pandemic and near levels seen during the 2007-2009 recession.

Source: New York Fed

But here’s the key point: there were no interest-rate caps during the financial crisis or the pandemic, and the credit card market did not collapse. Lenders adjusted. Borrowers repaid over time. The system absorbed the shock without government price controls. So what market failure would a cap on interest rates correct?

Attempts to control interest rates are nothing new. For centuries, governments imposed usury laws because they viewed interest as unfair. The results were predictable: fewer loans, less access to credit, underground lending, and worse outcomes for people with the fewest alternatives.

As people better understood the time value of money, strict caps faded away. Risk-based pricing replaced them. Lending became more transparent and more widely available. Modern credit cards are a product of that evolution.

Today, more than 80% of U.S. households have at least one credit card, and 82% prefer using a credit card for purchases, according to Federal Reserve survey data. That access didn’t come from government mandates. It came from competition, innovation, and flexible pricing.
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But access isn’t equal. Lower-income households are less likely to have credit cards, and when they do, they’re more likely to carry balances—especially during emergencies. These are the very consumers politicians claim to protect. Interest-rate caps would price them out of the credit market.

Source: Committee to Unleash Prosperity

Credit cards are expensive to operate. As outlined by the Committee to Unleash Prosperity, lenders face roughly 4% in capital costs, 6% in expected credit losses, and about 5% in administration and collections—more than 15% in costs before earning any return.

A 10% cap would guarantee losses.

When losses are guaranteed, lenders respond logically. They tighten credit standards. They lower limits. They close accounts with limited credit history. Credit becomes concentrated among the safest borrowers.

That isn’t punishment. It’s arithmetic.

Trump is not alone in promoting ideas that would worsen the credit market. Congress is considering the Credit Card Competition Act, which would impose government mandates on how credit card transactions are routed. Supporters claim it would lower costs. In reality, it functions as another form of price control.

These mandates would reduce the revenue lenders currently use to fund fraud protection, security, and rewards programs such as cash back and travel points. Those rewards don’t disappear evenly. They disappear first for everyday cardholders and small businesses. High-credit, high-balance users are protected the longest. Price controls don’t remove costs. They hide them and shift them.

Supporters of these policies often argue that consumers make poor decisions and need protection from themselves. But economic choices are subjective. What looks irrational from the outside may be entirely reasonable given someone’s constraints or priorities.

We cannot observe the outcome of other choices. We don’t know which option a borrower rejected. Assuming the government knows better than individuals isn’t economics. It’s paternalism.

The bottom line is that price controls don’t work. They don’t work for housing, labor, or energy —and they don’t work for credit.

Capping interest rates and dismantling payment networks won’t make credit cheaper for everyone. They will make credit scarcer, reduce benefits, and limit options — especially for the people who rely on credit the most.
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We already know how this story ends. Repeating it won’t protect consumers. It will leave them with fewer choices than before.

Originally published on Substack. 

Every time the Federal [Reserve] Open Market Committee (FOMC) meets, the commentary fixates on a familiar question:

Will interest rates go up, go down, or stay the same?

What if that debate misses the forest for the trees?
​
The Fed’s recent decision and meeting minutes—covered by the Wall Street Journal and CNBC—reveal something far more consequential: policymakers are increasingly boxed in by the structure of the system itself.

Inflation is still a concern. Financial instability is still a concern. Federal debt from overspending is an enormous concern. And the Fed is expected to help manage all of it at once.

That tension is not accidental. It is the predictable outcome of central banking.

Does America Need a Central Bank?

The United States has never been comfortable with central banking. For good reason.

The First Bank of the United States (1791–1811) was controversial from the start, opposed by luminaries like Thomas Jefferson and others who feared concentrated financial power. Congress ultimately allowed its charter to expire.

The Second Bank of the United States (1816–1836) followed the same path, dismantled after Andrew Jackson warned—correctly—that central banks entrench privilege, socialize losses, and distort markets.

For much of the 19th century, America had no central bank. Economic growth was uneven, yes—but long-run prosperity was remarkable, innovation flourished, and financial discipline was enforced more by market forces than committees.

The modern Federal Reserve arose not from a clear market failure, but from political reactions to earlier government mistakes.

The 1907 financial panic, often cited as justification for the Fed, was worsened by bad banking laws and restrictions on branch banking that made the system fragile. Instead of fixing those distortions, Congress passed the Federal Reserve Act of 1913—the same year the dreaded federal income tax was enacted.

That costly pairing was likely no accident. The modern fiscal–monetary system was seemingly built deliberately.

A Central Bank That Is “Independent” in Name Only

The Federal Reserve is frequently described as independent or quasi-private. In reality, it is a government-created institution with monopoly power over printing money.

Congress sets its mandate.

Fed controls the monetary base.

Fed manipulates interest rates.

While private banks fund the Federal Reserve System through fees and assessments, those costs are passed on to consumers and businesses. Americans pay for the central bank whether they approve of its actions or not.

Meanwhile, the Fed has been running hundreds of billions of dollars in operating losses, driven by interest paid on reserves and the consequences of its flawed balance-sheet expansion.

This is not a market-tested institution. It is a politically protected one.

The Mandates—and the One That Really Counts

Officially, the Fed operates under a dual mandate: price stability and maximum employment. In practice, there is a third mandate that dominates policy decisions:

Keep federal debt service manageable.

Before the 2008 Great Financial Crisis, the Fed’s balance sheet hovered around $800 billion or 6% of GDP. After GFC and COVID-era interventions, it surged to $9 trillion or 35% of GDP, and remains near $6.5 trillion or 21% of GDP.

This persistence has little to do with inflation being “conquered.” It has everything to do with the reality that allowing interest rates to fully reflect risk would dramatically increase federal borrowing costs. The Fed suppresses yields, absorbs Treasury issuance, and calls it stability.

That is fiscal dominance, not sound monetary policy.

Why Central Banking Creates Cycles—and Inequality

Central banks promise stability. What they deliver is systematic distortion.
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New money enters the economy unevenly—flowing first into financial markets, asset prices, and large institutions. Wages, savings, and fixed incomes adjust last. That Cantillon dynamic fuels asset bubbles, raises housing costs, and widens the gap between large firms and small businesses.

​These outcomes are not accidental. They are baked into discretionary monetary policy.

From the Great Depression to the Great Inflation, from the housing bubble to the post-COVID inflation surge, the Fed has presided over repeated boom-bust cycles.

A robust, resilient economy is not compatible with a system that tries to centrally plan it.

A Serious Reform Path—Starting Now

For those of us who believe in free markets, the long-term goal should be clear: a competitive, free-banking system where money and credit are disciplined by people in markets, not managed by non-elected members of the FOMC.

Ending the Federal Reserve should be on the list of priorities when genuine free-market reformers are in office.

But we don’t get there overnight.

Until then, the Fed must be constrained as tightly as possible. That means:

1. Return the Fed to its original intent of a narrow lender-of-last-resort, not a permanent allocator of credit or backstop for federal deficits.
2. Sell off the vast majority of its $6.5 trillion balance sheet, including mortgage-backed securities and excess Treasury holdings.
3. Impose a strict monetary rule: cap the Fed’s balance sheet at no more than 6% of GDP, roughly where it stood before 2008.
4. Once that cap is reached, the balance sheet should keep going toward zero unless it is necessary to not with a superiority vote. The cap should remain 6% of GDP with a continued decline by capping any growth to population growth plus inflation which typically grows slower than GDP until it is zero and end the Fed.

This approach restores predictability, limits political abuse, and begins reintroducing market discipline into money and credit. This should be paired with a strict spending limit on Congress.

This dual monetary-fiscal rules of limiting any growth to population growth plus inflation will help improve the situation.

The focus must be on reducing the Fed’s balance sheet with an single rule of price stability and federal government spending to a lower share of GDP, possibly 6% for both, then limiting to population growth plus inflation thereafter.

The Bottom Line

Central banking in the United States did not arise from market failure. It arose from political convenience—and it has been used ever since to paper over fiscal excess.

If we want lasting prosperity, rising wages, and real opportunity, we need to stop pretending that smarter central planners can fix what central planning itself breaks.

Sound money, fiscal restraint, clear rules, and ultimately freer banking are not radical ideas. They are the foundations of a free and prosperous society.

That’s how we truly let people prosper.

Originally published on Substack. 

​Affordability is the issue that decides elections because it decides everyday life.

Families don’t measure success by press releases or selective charts. They measure it by whether housing, groceries, insurance, healthcare, childcare, and borrowing costs fit inside a paycheck.

That’s why recent claims celebrating lower inflation metrics ring hollow for so many Americans.

For example, the White House recently shared this post on X claiming that “core inflation at its lowest in nearly five years.”

​Inflation isn’t gone. It’s much higher than pre-Trump-Fauci-COVID lockdowns. It’s being managed, delayed, and quietly socialized. And unless we change the rules that created this mess, affordability will remain out of reach.

Who Broke Affordability—and Why It Matters

Let’s be clear about responsibility, because pretending this is a one-party problem is how we repeat it.
​
The affordability crisis is the product of serial policy failures across administrations and institutions:

• Republican leadership, including during Trump’s first term, embraced protectionist tariffs, raising costs and uncertainty while allowing trade taxes to be imposed without full congressional accountability.
• Democratic leadership, especially under President Biden, layered on regulatory expansion and spending growth, pushing costs higher across energy, housing, healthcare, and finance.
• Congress—controlled by both parties at different times— normalized trillion-dollar deficits, turning “emergency” spending into a permanent baseline.
• The Federal Reserve under Chair Jerome Powell accommodated it all, expanding and maintaining a massive balance sheet to suppress interest rates and monetize fiscal excess.
• State and local governments, regardless of party, followed Washington’s lead and locked in higher spending that now crowds out private activity.

Each actor contributed. Each avoided hard limits. And each relied—explicitly or implicitly—on inflation to paper over bad decisions.
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That’s why affordability collapsed.

The Fed’s Balance Sheet Tells the Real Story

If inflation were truly beaten, the Federal Reserve wouldn’t still be sitting on a $6.6 trillion balance sheet filled with Treasury debt, mortgage-backed securities, and agency debt.

The data from the Federal Reserve’s balance sheet on FRED make the problem obvious:

• About $0.8 trillion in 2008
• Roughly $4.0 trillion in 2020
• Up to $9.0 trillion during the lockdowns
• Total $6.6 trillion today—roughly 20% of GDP, compared to about 5% before the 2008 Global Financial Crisis

That expansion isn’t neutral. It reshaped the economy.

Here’s the uncomfortable truth often missing from official messaging: The Fed isn’t maintaining this balance sheet because inflation has been defeated. It hasn’t.

The Fed is trapped because allowing interest rates to fully clear would sharply raise federal debt-service costs. So yields are suppressed, Treasury issuance is absorbed, and rates are kept artificially lower than they otherwise would be.

That’s not independent monetary policy.

That’s fiscal dominance.

Why Inflation Fuels Inequality by Design

New money and the resulting inflation never hit everyone equally.

New money enters the economy unevenly. It flows first into:

• Financial markets
• Asset prices
• Housing
• Large firms with access to capital markets

Wages, savings, and fixed incomes adjust last.

That’s how you get:

• Asset bubbles
• Higher rents and home prices
• Distorted capital allocation
• A widening divide between large firms and small businesses

Families feel squeezed. Entrepreneurs struggle. Meanwhile, firms closest to capital markets adapt just fine.

Then politicians—on both sides—blame “greed” or “capitalism” for outcomes driven by policy.

Let’s be precise: this isn’t free-market capitalism.

It’s government-managed finance layered on top of regulatory and trade intervention.
​
What a Pro-Affordability Agenda Requires: Three Rules

If affordability is the goal—and it should be—policy must be anchored to rules, not discretion.

1) A Spending Rule (Fiscal Discipline)

Government spending growth should be capped below population growth plus inflation—a Sustainable Budget rule, long advanced by my work at Ginn Economic Consulting, Americans for Tax Reform (ATR), Club for Growth Foundation, and others. This forces prioritization, prevents structural deficits, and restores credibility that debt will be managed through restraint rather than higher taxes and inflation.

2) A Monetary Rule (Sound Money)

The Fed needs a binding constraint—either a fixed growth rule for high-powered money or a cap on its balance sheet tied to the size of the economy. Returning toward ~5% of GDP, where the Fed stood before 2008, would end permanent “emergencies,” reduce asset inflation, and protect purchasing power.

3) A Trade Rule (Constitutional Accountability)

Tariffs are taxes. Under the Constitution, only Congress has the authority to raise taxes. The executive branch can make the case when action is warranted, but unilateral tariff authority undermines accountability, raises prices quietly, and fuels uncertainty. Restoring congressional control over tariff taxation could directly support affordability.

Why This Matters for Trump—and the Country

President Trump is right to focus on affordability. That’s where voters live. But lasting affordability cannot be built on protectionism, discretionary monetary policy, or unchecked spending.

A pro-growth agenda must also be pro-rules on government:

• Rules that restrain spending
• Rules that discipline money
• Rules that limit hidden taxes

That combination doesn’t just tame inflation. It restores competition, lowers barriers to entry, and expands opportunity—especially for small businesses and households without access to robust financial markets.

The Bottom Line

Affordability is not a slogan. It is an outcome. And outcomes follow incentives.

If policymakers want prices to stabilize, wages to rise in real terms, and opportunity to broaden, they must bind themselves to rules that work—even when inconvenient.

That’s how trust is rebuilt.

That’s how growth becomes durable.

And that’s how we let people prosper.