Trump’s Tariff Policies Are Schizophrenic

2025-02-20

One of President Trump’s proposals for his new term is to abolish the federal income tax and replace it with tariffs as the primary revenue source for the US federal government. In a brilliant rhetorical move, he suggests implementing this through abolishing the Internal Revenue Service and replacing it with the “External Revenue Service,” claiming that the tariffs collected by this new agency would be financed by foreigners rather than Americans. This sure sounds like a good deal.Trump has claimed that “tariff” is the most beautiful word in the English language, even more so than “love.” Perhaps it would be if it were a device by which one could costlessly extract funds from foreigners. But is a tariff capable of doing such a thing?Standard microeconomic analysis tells us that the

2025-02-14

With Central Bank Digital Currency (CBDC) banned by executive order, the Fed may have more incentive to explore alternatives in the cryptocurrency market. This week, Fed Governor Christopher J. Waller gave a speech titled: Reflections on a Maturing Stablecoin Market, sharing his thoughts on the potential role of the Federal Reserve in the private stablecoin market.According to the Governor:For the purposes of this speech, I define stablecoins as a type of digital asset designed to maintain a stable value relative to a national currency and backed at least one-to-one with safe and liquid assets.Notice, he did not say one-to-one peg with the US dollar.Specifically, a pool of assets is held in reserve so that stablecoins can be redeemed for traditional currency in a timely fashion.This sounds