What’s on Americans’ minds? The latest primary election results offered a window into what voters are thinking about. In my home state of Texas, voters sent a clear signal by backing efforts to eliminate property taxes through spending reductions.

Across the country, Americans are asking for the same things: lower taxes, a more affordable future, and a strong economy that creates opportunities. But too often, policymakers try to tax their way out of spending problems or regulate innovation — choices that threaten the very prosperity people are asking for.

That’s why in This Week’s Economy, I’m breaking down how these issues are playing out in policy debates. From tariffs and taxes to government spending and regulation, these decisions directly shape whether American families can afford the future they’re working toward — and policymakers can’t afford to ignore them.

Let’s dive in! Catch the full episode on YouTube, Apple Podcast, or Spotify, and visit vanceginn.substack.com for show notes, and don't forget to subscribe.

​Today’s episode is our first of 2026, focused squarely on the latest economic headlines—and what they mean for your wallet, your work, and the direction of the country.

Washington has been busy. From another federal budget fight and renewed debates over health care subsidies, to fresh inflation data and major corporate developments, policymakers are already setting the tone for the year ahead. The choices being made now will shape whether families see real relief—or continued pressure—from higher costs and slower growth.

In this episode, we’ll look beyond the headlines to examine what’s really driving these developments, where policy is helping—or hurting—affordability, and what leaders should prioritize if they’re serious about restoring growth and prosperity in 2026. Tune in to the full episode on YouTube, Apple Podcast, or Spotify, and visit my website for more information.

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.
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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.
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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.

Yes, real GDP grew at a solid pace. But when you dig into the details, the story becomes far less reassuring. The economy is growing in ways that are fragile, policy-distorted, and increasingly inflation-constrained. That combination should concern anyone serious about long-run prosperity.

Private Investment Is the Growth Engine—and It’s Stalling

The most important fact buried in the data from the Bureau of Economic Analysis isn’t the headline growth rate. It’s this:
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Gross private domestic investment has been a negative contributor to real GDP growth in three of the last four quarters.

The only exception was Q1 2025, before tariffs and renewed protectionism began distorting trade flows and investment incentives. Since then, private investment has repeatedly subtracted from growth.

You can see this clearly in the BEA GDP tables and the National Income and Product Accounts.

This matters because private investment is how an economy builds productive capacity. It’s how businesses adopt new technology, improve productivity, and raise wages sustainably. An economy can seemingly coast on consumer spending and government outlays for a while, but it is weak growth that cannot compound without investment.

When investment weakens quarter after quarter, it’s not an accident. It reflects rising policy uncertainty, higher costs, and incentives that discourage long-term planning.

Why Imports Aren’t “Hurting” GDP

Another widely misunderstood point: imports.

Imports are subtracted from GDP only to avoid double-counting, not because imports are bad for the economy. When a household buys an imported good, that purchase is already counted in personal consumption expenditures. Subtracting imports simply prevents counting the same transaction twice.

The accounting identity is straightforward:

GDP = C + I + G + (X – M)

So when imports fall, GDP can mechanically rise even if overall economic activity weakens. That’s not strength. That’s math.

Recent GDP growth has been flattered by falling imports, not by a surge in productive domestic investment. Treating that as economic progress leads directly to bad policy.

Tariffs Distort Trade—and the Growth Story

This distortion is magnified by protectionism.

Tariffs disrupt supply chains, raise input costs, invite retaliation, and inject uncertainty into investment decisions. Exports suffer. Imports fall for the wrong reasons. GDP can look better on paper while the real economy becomes less efficient and less competitive.

Independent analysis from the Yale Budget Lab shows tariffs reduce long-run output, real incomes, and private investment—even when short-term GDP arithmetic looks favorable.

In other words, tariffs can improve the scoreboard while shrinking the field of play.

Inflation Is Heating Up—and That Makes Growth More Fragile
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Layered on top of this weak investment picture is another growing problem: inflation is moving in the wrong direction.
Data from the PCE Price Index show that inflation picked up again in Q3. More importantly, core PCE inflation is now running closer to 3%, not the 2% target the Federal Reserve claims to aim for.

That’s not a trivial difference. Inflation near 3% erodes real incomes, complicates business planning, and makes consumption-driven growth harder to sustain. It also forces interest rates to stay higher for longer, which further weighs on private investment—the very area already dragging GDP down.

This raises an uncomfortable question: is 3% quietly becoming the Fed’s new target?

If so, that would be bad news. A higher inflation “tolerance” acts like a tax on savings, distorts capital allocation, and locks in weaker long-run growth. It leaves us with the worst of both worlds: fragile growth and persistent price pressure.

The Bottom Line

GDP growth is not the goal. Prosperity is.

An economy where private investment subtracts from growth in three of four quarters, where imports “boost” GDP through accounting mechanics, and where inflation drifts farther from target is not as strong as the headlines suggest.

If we want durable growth, we need pro-growth policies: stable fiscal and monetary rules, unhampered markets, lower barriers to capital formation, and less government interference that raises costs and uncertainty.

Growth comes from producing more, investing more, and letting people build—not from celebrating fragile numbers or redefining success.

​If you’ve ever wondered why so many young people are confused about capitalism, skeptical of markets, or convinced that government control is the answer to rising prices and shrinking opportunity, this episode gets straight to the root of the problem.

Economic ignorance isn’t accidental. It’s the predictable outcome of bad policy, bad education, and a culture that treats inflation and government growth as unavoidable facts of life rather than man-made choices. That’s why this conversation matters.

My guest is Diogo Costa, president of the Foundation for Economic Education (FEE)—one of the most important institutions advancing free markets, individual liberty, and economic understanding. Diogo didn’t come to these ideas through theory alone. He lived through inflation firsthand while growing up in Brazil, watching savings evaporate and trust in institutions collapse. That experience shaped his worldview long before he ever led one of the most influential freedom organizations.

Today, Diogo is focused on a long game most politicians ignore: building a liberty pipeline by educating students before politics hardens their views and bad ideas take root.

🎧 Listen to the full episode of the Let People Prosper Show, and subscribe today. You can also find more of my work at vanceginn.com or vanceginn.substack.com.