Month: March 2025

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Uncategorized

The Hollowing of Britain: A Cautionary Tale for the West

The announcement that British Steel will shutter its blast furnaces in Scunthorpe marks far more than the end of an industrial era—it signals the unraveling of a great civilization. What we are witnessing is not merely an economic casualty, but the culmination of decades of self-inflicted decline, driven by an elite ideology that prioritizes utopian fantasies over strategic realities.

Britain, once the epicenter of the Industrial Revolution, forged the rails, bridges, and battleships that girded the globe. It was a nation of builders and doers. Today, it becomes the only G7 country incapable of producing virgin steel—a foundational material for defense, infrastructure, and economic independence. This collapse is not the result of global competition alone, but of domestic policy choices shaped by an insular, progressive establishment.

We’ve seen this before. Great powers do not fall because they are conquered. They fall because they forget who they are. From ancient Rome to 20th-century Britain, the pattern is the same: internal decay, driven by elites who become detached from the values and virtues that made their civilization strong.

The Scunthorpe closure encapsulates the consequences of governance by virtue signal. Under the banner of “net zero,” Britain’s political class has substituted industrial policy with ideological compliance. Electric arc furnaces may satisfy green metrics, but they cannot produce the high-grade virgin steel required for tanks, ships, or high-speed rail. These furnaces rely on recycled scrap, which lacks the structural integrity and consistency needed for critical infrastructure and defense applications. Without blast furnaces, Britain loses the ability to control the quality and composition of its steel from raw materials—a strategic vulnerability in an increasingly unstable world. With China expanding its industrial footprint and authoritarian regimes growing bolder, abandoning domestic steelmaking is not just foolish—it’s dangerous.

Just as damaging is what has happened to Britain’s energy production. A once-diverse energy portfolio capable of supporting heavy industry has been systematically dismantled. Coal plants were shuttered before reliable alternatives were fully operational. For instance, the closure of the Drax coal units in 2021 occurred years before adequate grid-scale battery storage or consistent renewable baseload generation was available, leading to severe grid strain and record-high energy prices during the winter of 2022. Nuclear development stagnated under bureaucratic delays and activist pressure. And while wind and solar capacity grew, they remain intermittent and ill-suited to power large-scale manufacturing. The result? Skyrocketing energy prices that cripple industry and leave Britain dependent on foreign imports to keep the lights on.

And what of the people left behind? Nearly 3,000 workers—skilled, proud, generationally tied to their craft—are being told their livelihoods are the price of progress. The Left, once the supposed champions of the working class, now offer them hollow slogans of a “just transition,” without explaining what they’re transitioning to. Take, for example, the failed transition plans in Redcar after the 2015 steelworks closure—promised retraining and redevelopment never materialized in any meaningful way, leaving the community economically stranded and disillusioned. It’s a familiar pattern: grand pronouncements, scant follow-through. More bureaucracy? More welfare dependency? Another job training seminar in a boarded-up town?

The political class has become remarkably adept at managing decline, while utterly incapable of reversing it. And so Britain—like many Western nations—is being redefined not by what it builds, but by what it dismantles. The West must decide: do we want to be strong, self-reliant societies, or do we wish to be fragile dependents, outsourcing our economic and strategic futures to others?

This is not just Britain’s crisis. It is a warning to America and to every nation that has allowed ideology to eclipse pragmatism. Consider the U.S., where states like California have pursued aggressive green mandates without securing sufficient energy resilience or industrial capacity—resulting in blackouts and an exodus of manufacturing jobs. The parallels are clear and the stakes, equally high. If we continue down this path—if we let the rhetoric of climate utopianism override the fundamentals of security and sovereignty—then we too may wake up one day to find that our steel heart has been melted down, not by our enemies, but by our own hands.

The choice ahead is stark: revival or retreat. Let Britain’s fall be a lesson, not our fate.

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Government

From Bureaucratic Quagmire to Trump 2.0: Slaying the Leviathan in Medicaid and Broadband

The federal government’s track record with grand initiatives offers a tale of two extremes—Medicaid’s swift and efficient rollout in the 1960s versus the bureaucratic gridlock of today’s rural broadband program. Medicaid transformed from legislation to reality in under five years. By contrast, the Build Back Better broadband push—three years old as of March 2025—is still stuck in a labyrinth of 14 cumbersome steps. The Biden-era leviathan is bloated and sluggish. But with Trump 2.0 on the horizon and a bold reform tool—DOGE, the Department of Government Efficiency—we have a blueprint to cut through red tape, revitalize Medicaid, and finally deliver rural broadband.

Back in 1965, under President Lyndon Johnson, Medicaid launched with remarkable speed. By January 1, 1966, states were enrolling, and by 1970, all but Arizona had live programs. This was pre-digital—no computers, just paper, fax machines, and grit. Most states implemented Medicaid in two to three years. In stark contrast, Build Back Better’s broadband initiative, launched in 2021, has produced little more than frustration. Just three of 56 jurisdictions have made it through the entire 14-step approval process. Planning grants, five-year strategies, and endless disputes over FCC maps have paralyzed progress. Medicaid trusted states to deliver. Broadband smothers them with oversight.

The results speak volumes: as of March 2025, despite more than three years of federal engagement, virtually no broadband infrastructure has been built through this program. The application process is so convoluted and opaque that many potential applicants—both states and private sector providers—have simply walked away. Faced with a mountain of paperwork, multiple map challenges, and years-long timelines, they’ve decided it’s not worth the time, cost, or uncertainty. The process has defeated the very people it was meant to help.

Even progressive commentators like Jon Stewart and Ezra Klein are exasperated. On a recent podcast, Klein read through the broadband process step-by-step, and the scene quickly descended into a comedic display of disbelief. Klein began with Step 1—the issuance of a funding opportunity notice—and proceeded through an exhausting maze: letters of intent, $5 million planning grant requests, NTIA reviews and approvals, five-year action plans, FCC maps, state-level challenges to those maps, multiple rounds of proposals, subgranting, and final approvals. Stewart, increasingly aghast, interrupted: “But then what was the five-year plan and what the [expletive] did they apply for?” By Step 12, he exploded— “Oh, my [expletive] God. At step 12. After all this has been done!?”—before falling into stunned silence. Their exchange underscored a rare bipartisan truth: the current process is so tangled, so dysfunctional, even the most ideologically sympathetic observers can’t defend it.

How did we get here? We’ve spent decades building up the Leviathan state complex, unaccountable web of federal agencies, regulations, and review panels that now chokes everything it touches. What once may have been intended as oversight has metastasized into paralysis. Each new mandate or program layer adds more friction, fewer results. The bureaucratic state no longer serves the citizen—it serves itself. Programs stall not for lack of funding or will, but because the system is structurally designed to delay, defer, and deflect.

The problem isn’t limited to broadband. The CHIPS Act, intended to rebuild America’s semiconductor manufacturing capacity, is already buckling under the weight of its own liberal wish list. Instead of fast-tracking critical chip production, it’s bogged down by mandates on childcare provisions, climate compliance reporting, diversity benchmarks, and labor guarantees. These add-ons, though politically fashionable, have all but guaranteed the Act’s failure to deliver on its core mission. While foreign competitors move swiftly and decisively, America’s own industrial policy is stalled by its obsession with ideological box-checking.

Enter Trump 2.0—armed with lessons from his first term and ready to wield DOGE. In round one, Trump streamlined Medicaid by waiving work requirements, accelerating reimbursements, and piloting block grants—all while maintaining coverage for over 70 million Americans. With DOGE in hand, a second Trump term could go further: AI-driven eligibility systems that cut approval times from weeks to days, blockchain-backed fraud detection that saves billions, and a new ethos of state-level flexibility. DOGE would be a scalpel to cut federal bloat and bring Medicaid into the 21st century.

Broadband, too, is ripe for disruption. Trump 2.0 could scrap the 14-step farce that Stewart and Klein derided and implement a simple, three-step process: states request funding, the feds approve it, and providers build. That’s it. Trump’s first term prioritized market-driven innovation, like leveraging SpaceX’s Starlink. A second term could double down—bypassing the NTIA’s bureaucratic morass and fast-tracking fiber and satellite deployment. Results, not process.

The Medicaid model worked because it moved quickly and gave states breathing room. The broadband model is failing because it chokes progress with bureaucracy. Trump 2.0 and DOGE offer a way forward: smarter government, less waste, and faster outcomes. LBJ showed government can work. Trump showed it can move. Now, with the right tools, it can do both—fast.

Imagine rural kids on Zoom, seniors accessing telehealth with ease, and Medicaid responding in days instead of months. That’s the vision. That’s the promise of Trump 2.0 and DOGE: not just to streamline, but to liberate the American people from the grip of the modern administrative state.

Categories
Healthcare

The Real Disease in American Health Care: Misaligned Incentives

Let’s be honest: while high prices, wait times, and red tape do create real burdens for millions of Americans, they are symptoms—not the root cause—of our health care system’s deeper failure. Those are symptoms. The underlying disease? A system of incentives so backwards, it pays for illness and penalizes wellness. In short, we reward failure.

Doctors don’t get paid to keep you healthy. They get paid when you show up sick. It’s called fee-for-service, and it dominates the landscape. If you come in with high blood pressure, you generate revenue. If you fix your health with diet and exercise? That’s a financial loss. It’s not about bad doctors—it’s about bad incentives. The system makes illness profitable and prevention expensive.

Now here’s the kicker: we could change this. Take the Geisinger Health System in Pennsylvania, for example—they’ve piloted models where physicians receive bonuses for improved patient outcomes, like reduced hospital readmissions and better management of chronic conditions. The result? Healthier patients, lower costs, and a blueprint for broader reform. We could build a system where doctors earn bonuses when your numbers improve, where outcomes—not just procedures—drive revenue. There are small programs doing just that. Accountable Care Organizations. Direct Primary Care. They’re proof of concept. But they’re exceptions—outliers in a system stuck in the past. The ACA should be amended to make these outcome-based models the rule, not the exception, encouraging broader adoption of practices that prioritize patient wellness over procedure volume.. Washington, as usual, is the problem, not the solution.

Thanks to the Affordable Care Act (ACA), insurance companies can’t offer lower premiums to people who take care of themselves. A marathon runner pays the same as someone parked on the couch with a bag of chips. That’s not fairness—that’s lunacy. We’ve outlawed personal responsibility from the equation and then wondered why premiums are skyrocketing. Spoiler alert: they’ve jumped over 50% since the ACA passed.

President Obama said, “If you like your doctor, you can keep your doctor.” Millions learned the hard way that wasn’t true. That promise wasn’t just broken—it was shattered. Networks shrank. Plans disappeared. Trust eroded. The ACA centralized control, stripped out choice, and handcuffed innovation. And the result? Rising costs, reduced access, and a system that favors bureaucracy over people.

Critics say adjusting premiums based on behavior would “punish the unhealthy.” But the current system already punishes everyone. Responsible patients subsidize those who don’t lift a finger, and taxpayers bail out the system when chronic conditions spiral into crises. This is socialism in a lab coat—central planning disguised as compassion.

We need a new direction—one that reflects free-market principles and respects the dignity of individual effort. Let insurers compete on wellness incentives. Let providers profit from outcomes, not just activity. Tear down the regulatory roadblocks and unleash American innovation.

We don’t have a health care system. We have a sick-care machine—one that waits for you to break down before it kicks into gear. Contrast that with systems that prioritize wellness, where routine checkups, preventive screenings, and lifestyle coaching are incentivized and rewarded. In those models, health care begins long before a crisis hits. It’s time to flip the incentives, reward responsibility, and restore choice. Let’s get back to what works: markets, accountability, and freedom. Because when people have skin in the game, and providers have a reason to keep us healthy, that’s when real reform begins.

Categories
Macro Economics

Time for a US Sovereign Wealth Fund

It’s a new day for American economic policy – and the opportunity before us is historic. With the global economy evolving rapidly and national debt continuing to mount, the U.S. is finally exploring an idea that successful nations like Norway, Singapore, and the United Arab Emirates have embraced for years: the sovereign wealth fund. These countries have used their sovereign funds to turn natural resource wealth and fiscal surpluses into powerful engines for long-term prosperity. Norway’s Government Pension Fund Global, for example, has ballooned to over $1.4 trillion, distributing the benefits of its oil wealth to every citizen and safeguarding its economy for generations.

Now, under the leadership of President Trump, Treasury Secretary Scott Bessent, and Commerce Secretary  Howard Lutnick, America is poised to step into this space with a uniquely ambitious vision. And let me tell you – this isn’t just smart economics, it’s America First economics.

For decades, we’ve talked about unleashing the full potential of American assets. Well, here’s the moment. Instead of watching our government bloat the balance sheet with more and more debt, why not flip the script and invest in America? That’s what this fund does – it takes underutilized government assets, like our stakes in Fannie Mae and Freddie Mac, and turns them into wealth-building opportunities for all Americans.

Howard Lutnick’s proposal to obtain equity or warrants when the government makes major purchases is simply genius. Think about it – when Uncle Sam spends big, the American people should get a return on that investment. This is how we bring market discipline into government spending. It’s shareholder capitalism — with the taxpayers as the shareholders.

This is a pro-growth strategy. It’s a jobs strategy. It’s a prosperity-for-everyone strategy. And most importantly, it’s a vision that says government should be a partner in wealth creation, not just a redistributor.

Let’s take a page from Norway’s playbook – but do it the American way. Bigger, better, and driven by innovation, entrepreneurship, and the dynamism of our free-market system. From tech to energy to biotech, the opportunities are endless when you have a country like ours at the helm of a professionally managed, transparent, and accountable investment vehicle.

This could be the beginning of a new era – one where American families feel the upside of American power. Lower taxes, smarter infrastructure, stronger retirement security, and a booming economy. That’s the Kudlow way. That’s the American way.

Policy Recommendation:

To ensure the U.S. sovereign wealth fund launches with strength and credibility, the administration should begin by capitalizing it with a portfolio of existing federal equity stakes – including positions in Fannie Mae, Freddie Mac, and any publicly traded assets currently held by government entities. Additionally, Congress should authorize a new “American Prosperity Fund Act,” empowering the Treasury and Commerce Departments to negotiate equity or warrant agreements in exchange for future large-scale federal expenditures—such as infrastructure contracts, clean energy development, and pharmaceutical procurements. The fund should be managed independently with a professional board, subject to strict transparency requirements, and structured so that a portion of returns are reinvested while another portion is distributed annually as dividends to American citizens—similar to Alaska’s Permanent Fund model. This ensures broad-based benefit and builds long-term public trust.

This should not be a partisan issue. It’s time for Democrats to show they truly care about working-class Americans—not just with words, but with actions that deliver real, generational wealth. A sovereign wealth fund is a chance for both parties to unite around economic opportunity and shared prosperity. If we’re serious about lifting up all Americans, then we must come together now to make this vision a reality.

The United States has long been a beacon of free enterprise, innovation, and boundless opportunity. A sovereign wealth fund gives us the chance to double down on those strengths – to turn our government into a strategic investor, and our citizens into stakeholders in the national success story. The time to act is now. Let’s seize this moment and build the next great chapter of American prosperity – not just for Wall Street, but for every Main Street in this great country.

Categories
Macro Economics

  Yellen’s Disaster of Short-Term Debt: A Fiscal Crisis  Scott Bessent Must Undo

   Introduction

Janet Yellen’s tenure as U.S. Treasury Secretary, from January 26, 2021, to early 2025, will be remembered as a catastrophic failure of fiscal stewardship, marked by her reckless and shortsighted obsession with issuing short-term debt. Her strategy—born of either incompetence or willful neglect—has plunged the U.S. economy into a maelstrom of refinancing risks, crippling interest rate exposure, and a tarnished fiscal reputation, leaving a $34 trillion debt burden teetering on the edge of disaster. As of March 19, 2025, Scott Bessent, whether as the newly appointed Treasury Secretary or a prospective leader, inherits this smoldering wreckage, tasked with salvaging an economy battered by Yellen’s egregious missteps. This paper dissects the damage she inflicted and outlines the monumental challenges Bessent must overcome to restore stability.

   Background: Yellen’s Short-Term Debt Legacy

Under Yellen’s disastrous oversight, the U.S. Treasury leaned heavily on short-term instruments, such as Treasury bills with maturities of less than one year, to fund the government’s insatiable borrowing needs during the COVID-19 recovery and beyond. Initially justified by low interest rates in the early 2020s, her refusal to pivot to longer maturities as rates soared in 2022 betrayed a staggering lack of foresight. By 2025, with the national debt exceeding $34 trillion, a significant portion now demands constant refinancing at punishingly high rates—a direct consequence of Yellen’s myopic strategy. For Bessent, this skewed debt profile is not just a challenge but a fiscal time bomb requiring immediate defusal.

   The Inherited Economic Challenges

1.   Mounting Refinancing Risk   

   Yellen’s folly has saddled Bessent with the Sisyphean task of rolling over billions in short-term debt monthly, often at rates that have skyrocketed since her tenure began. With the Federal Reserve holding rates above 5% in 2025 to tame persistent inflation, refinancing costs have exploded—debt once issued at 0.1% in 2021 now renews at over 5%. The Congressional Budget Office (CBO) warns that annual interest payments could hit $1 trillion by 2030, a fiscal albatross Yellen strapped to the nation’s back, choking off resources for critical priorities.

2.   Interest Rate Vulnerability   

   Yellen’s shortsightedness has left the Treasury nakedly exposed to interest rate swings, a vulnerability Bessent must now wrestle into submission. Short-term debt, unlike the long-term securities she shunned, ties borrowing costs to volatile market conditions. As rates climbed relentlessly from 2022, her failure to secure low rates for the long haul has proven ruinous. Bessent faces an uphill battle to stabilize this chaos, with every rate fluctuation threatening to deepen the wound Yellen carved.

3.   Restoring Fiscal Credibility   

   The global perception of U.S. fiscal reliability lies in tatters, a casualty of Yellen’s reckless reliance on short-term debt. The 2023 Fitch Ratings downgrade from AAA to AA+—a humiliating rebuke—laid bare the risks of her approach, amplifying market unease. Bessent must now rebuild trust among investors wary of a government that Yellen left scrambling to refinance its obligations, a task made harder by the specter of higher yields demanded to offset her legacy of instability.

   Bessent’s Strategic Options

To claw back from Yellen’s abyss, Bessent can pursue several urgent measures:

1.   Lengthening Debt Maturities   

   Bessent must immediately shift issuance toward long-term securities—10- and 30-year bonds—to break the cycle of perpetual refinancing Yellen entrenched. Though rates are higher than the golden opportunity she squandered in 2021, this move could shield the economy from further rate shocks, offering a stability she never valued.

2.   Debt Restructuring Initiatives   

   Innovative tools like callable bonds or debt swaps could help Bessent convert Yellen’s short-term mess into manageable long-term obligations. These steps, though intricate, might temper market disruption and begin repairing the damage her negligence unleashed.

3.   Coordination with the Federal Reserve   

   Bessent could seek tacit alignment with the Federal Reserve to manage rate expectations, a lifeline Yellen never grasped. While the Fed’s independence limits overt collaboration, strategic signaling could ease the refinancing burden she magnified, giving Bessent breathing room to enact reforms.

   Obstacles and Trade-Offs

Bessent’s mission is a Herculean one, hampered by Yellen’s legacy of elevated rates that make long-term debt costlier than it should have been. Market appetite for Treasuries may falter if rate hikes loom, forcing higher yields to lure investors—a bitter pill traceable to her inaction. Political gridlock, too, could thwart his efforts, with Congress likely to balk at the interest costs Yellen’s blunders have normalized.

   Analysis: A Pivotal Moment

Yellen’s tenure stands as a cautionary tale of fiscal malpractice, her short-term debt fixation a gamble that backfired spectacularly. Bessent inherits a Treasury bleeding from her wounds, with interest payments devouring the budget and economic flexibility in tatters. The 1970s, when similar shortsightedness fueled a debt crisis, echo as a grim warning. Bessent’s response—whether bold restructuring or cautious stabilization—will define whether he can reverse her course or merely delay the reckoning she ensured.

   Conclusion  Scott Bessent confronts a fiscal nightmare forged by Janet Yellen’s disastrous reliance on short-term debt. Her legacy is one of squandered opportunity and inflicted harm, leaving behind a nation vulnerable to refinancing chaos and spiraling costs. Bessent’s charge—to lengthen maturities, innovate financing, and restore trust—is a tall order, but essential to avert the collapse Yellen’s policies courted. His success will determine whether the U.S. economy emerges from her shadow or sinks deeper

Categories
Macro Economics

Social Security Unshackled: Unleashing the S&P 500

Introduction

I owe David Friedberg a shout out. The guy’s a tech wizard—ex-Google hotshot, sold The Climate Corporation for a cool $930 million—and his riff on the All-In Podcast lit a fire under me. He tossed out a wild idea: shove half the Social Security Trust Fund into the S&P 500. I’m running with it, not because it’s his baby, but because it’s a sledgehammer to the rusting shackles of a system bleeding out by 2032. This isn’t just about saving a fund—it’s about smashing the myth of government handouts, handing workers their rightful slice of America’s corporate jackpot, and fitting Trump’s MAGA war cry like a glove. Buckle up.

The Current Mess of Social Security

The Social Security Trust Fund—$2.7 trillion on paper—is a wheezing dinosaur, chained to U.S. Treasury securities that limp along at 4.8% a year since the ’30s. It’s a slow-motion car wreck—outflows dwarf inflows, and by 2032, it’s toast. Meanwhile, the S&P 500, a roaring testament to American hustle, clocks 11% annually. The gap’s a gut punch: a fund meant to cradle workers is choking on its own cowardice, and I’m not buying the excuses.

The Plan: Equity Over Entitlements

Here’s the play: siphon at least 50% of that $2.7 trillion into the S&P 500—Wall Street’s glitzy prize. Rewind to ’71, post-gold standard, and picture half the fund riding the market’s waves. Today, it’d be $15 trillion—five times its current heft, a third of the S&P 500’s muscle, owned by every grease-stained, clock-punching American. The wins are brutal:

  1. Cash That Lasts: Slam $500 billion into equities now, let it rip at 10.5% a year, and the fund’s a juggernaut—no bankruptcy, no groveling for tax scraps.
  2. Workers Get Their Due: Every payroll nick becomes a golden ticket—shares in Tesla, Walmart, Pfizer—not crumbs from some bureaucrat’s table.

Equity Over Elitism and the Raw Joy of Ownership

Since ’08, the fix was in—cheap cash and Fed voodoo juiced stocks for the suit-and-tie crowd with 401(k)s, while the lunchbox brigade got stiffed with Treasury scraps. Flip that script: every worker scores a piece of the pie. Imagine a steelworker in Pittsburgh or a cashier in Boise ripping open their Social Security statement—“You own 0.0001 shares of Apple, 0.0002 of Amazon.” It’s not a drab number—it’s a middle finger to the elite, a raw, fist-in-the-air thrill of staking a claim in America’s engine room.

A Cynical Take on “Entitlements”

Here’s where it gets ugly. Social Security and Medicare—funded by workers and their bosses through payroll sweat—aren’t “entitlements” like Medicaid, doled out from Uncle Sam’s piggy bank. They’re ours, damn it, administered for us, not gifted by some benevolent overlord. But Washington’s spun it—lumping them with welfare to paint us as moochers, not earners. It’s a con, a semantic sleight-of-hand to keep us bowing to the feds instead of standing tall as the funders. Equity ownership blows that lie wide open—your labor, your stake, no handouts.

A Sovereign Wealth Fund, Not a Politician’s Prop

This $15 trillion beast would be the planet’s fattest sovereign wealth fund—not some king’s stash, but a worker-built titan. Norway’s got its $1.4 trillion oil kitty; we’d have a people’s empire, born from calluses and clock-ins. It’s already there, mislabeled as a trust fund, rotting in Treasuries. Why? Not just old debt habits—politicians hoarded it to hog the glory. Investing in the S&P 500 would’ve spotlighted America’s free-market dynamo, not D.C.’s puppet masters. They’d rather us grovel, cradle-to-grave, than cheer the capitalism that actually pays the bills.

Work’s Worth, Not Washington’s Whims

This is about guts, not government. Every Social Security cut from your check turns into a war chest—shares in Ford, Netflix, Boeing. Friedberg’s teary-eyed toilet-scrubbing tale hits home: work should mean something. “Log in and see what you own,” he mused. For the welder, the nurse, the driver—it’s not just a wage; it’s a legacy, a loud-and-proud “I built this.” No more begging D.C. for scraps—your labor’s the fuel, and the market’s the furnace.

The Real Reason It Never Happened

History’s a clue, but cynicism’s the key. Sure, the ’30s needed Treasury buyers, but today, the fund’s 8% of the pile—peanuts next to the Fed and foreigners. The real scam? Politicians didn’t want the S&P 500 stealing their thunder. A booming fund tied to free markets would’ve screamed American ingenuity—Ford’s assembly lines, Jobs’ garage—not congressional grandstanding. They kept it in Treasuries to keep us dependent, addicted to their “generosity,” not liberated by our own system’s horsepower.

Feasibility Despite the Fearmongers

It’s not rocket science. Canada’s pension fund bets 20% on stocks; U.S. feds cash in via S&P 500 options in their Thrift plan. Half-in works—period. The ’08 crash—down 37%—makes suits sweat, but the fund’s a marathon runner, not a sprinter. That 11% average shrugs off dips; toss in bonds for a 50/50 split, and it’s steady as steel. Politicos will wail “gambling!”—let ’em. Show workers their shares, and it’s not a dice roll—it’s theirs.

Trump’s MAGA Match

This is MAGA catnip—Trump’s “Make America Great Again” distilled into dollars and defiance. He’d crow: “We’re making Social Security yuge—the biggest fund ever, folks, bigger than China’s, owned by you, the forgotten worker. Tremendous.” It’s populist dynamite—socking the coastal snobs, arming flyover country with Wall Street clout. It’s jobs roaring back, pride surging, America flexing—a red-hat rally in financial form, all while dunking on global wannabes.

The Bigger, Grittier Picture

This is America unchained. Equity statements—gritty proof of ownership—would weld workers to the nation’s winning streak, spitting in the eye of despair. A $15 trillion fund’s a global haymaker, built by the people, not parasites. Work becomes a warrior’s badge—every shift a brick in the empire, not a plea for D.C.’s pity.

Conclusion Friedberg’s spark lit this fuse, but I’m fanning the flames. Shoving half the Social Security Trust Fund into the S&P 500 isn’t a tweak—it’s a reckoning. A $15 trillion worker-owned titan, equity stubs that scream “mine,” and a gut-shot to the entitlement lie—it’s raw, real, and MAGA to the core. Washington’s kept us on a leash, hogging credit for our cash. Time to cut the cord, unleash the market, and let workers rule. This is ours—let’s take it.

Categories
Macro Economics

 The Ballooning Government Debt: A Consequence of Neo-Keynesian Overreach and the Neglect of Milton Friedman’s Monetary Theory

The United States and many advanced economies are grappling with unprecedented levels of government debt, a crisis exacerbated by decades of policy rooted in Neo-Keynesian thought. This paradigm, a synthesis of John Maynard Keynes’ demand-side economics with neoclassical principles, has fostered a belief that government spending is inherently beneficial, even when it fails to generate productive economic activity. Meanwhile, Milton Friedman’s monetary theory, which emphasizes the primacy of money supply control and fiscal restraint, has been sidelined. Friedman’s warnings about the limits of discretionary intervention and the inflationary risks of excessive money creation stand in stark contrast to the Neo-Keynesian orthodoxy that dominates today. This paper argues that the colossal government debt we face is a direct result of overreliance on Neo-Keynesian assumptions—epitomized by the notion that all government spending is good—coupled with a dismissal of Friedman’s disciplined monetary framework.

Neo-Keynesian thought gained prominence by advocating government intervention to boost aggregate demand, particularly during economic downturns. Its modern iteration, bolstered by economists like Paul Krugman and Olivier Blanchard, has extended this logic to justify expansive fiscal policies even in times of relative stability. The 2008 financial crisis and the COVID-19 pandemic accelerated this trend, with governments unleashing trillions in stimulus packages—often with bipartisan support—under the Neo-Keynesian banner that spending stimulates growth. The U.S. national debt, surpassing $34 trillion by early 2025, reflects this approach, as policymakers embraced deficits as a tool to “prime the pump” without rigorous scrutiny of their productivity.

Central to Neo-Keynesian ideology is the assumption that government spending, regardless of its form, generates a multiplier effect that outweighs its costs. Infrastructure projects, social programs, and even poorly targeted subsidies are defended as economic catalysts, despite evidence that much of this expenditure fails to yield sustainable growth. For instance, the 2021 American Rescue Plan injected $1.9 trillion into the economy, yet studies suggest significant portions were funneled into consumption rather than investment, inflating demand without enhancing productive capacity. This carte blanche approach to spending has normalized deficits, entrenching the view that debt is a manageable byproduct of progress.

Friedman’s Monetary Theory: A Road Not Taken

Milton Friedman offered a starkly different perspective, rooted in the Quantity Theory of Money and a skepticism of government overreach. He argued that economic stability hinges on controlling the money supply, not on endless fiscal expansion. In *A Monetary History of the United States, 1867–1960*, Friedman and Anna Schwartz demonstrated how monetary mismanagement, rather than insufficient demand, drove the Great Depression—a critique that implicitly challenged Keynesian reliance on spending. His policy prescription was clear: maintain steady, predictable money supply growth and avoid discretionary interventions that distort markets or fuel inflation.

Friedman’s monetarism also carried a fiscal corollary: government spending should be restrained, as excessive borrowing and money creation sow the seeds of economic instability. He viewed inflation as “always and everywhere a monetary phenomenon,” warning that printing money to finance deficits—whether directly or through central bank purchases—would erode purchasing power and burden future generations. Had Friedman’s principles guided policy, the unchecked debt accumulation of recent decades might have been curbed by a focus on monetary discipline and productive allocation of resources.

 How Neo-Keynesian Overreliance Fuels Debt

The neglect of Friedman’s insights is evident in the trajectory of government debt. Neo-Keynesian policies have encouraged a spending spree detached from economic fundamentals. Post-2008 quantitative easing, where central banks bought government bonds to finance deficits, exemplifies this trend—effectively monetizing debt in a manner Friedman cautioned against. By 2025, U.S. debt-to-GDP ratios exceed 130%, levels unseen since World War II, yet Neo-Keynesian advocates argue that low interest rates render such burdens sustainable. This optimism ignores the crowding-out effect, where government borrowing siphons capital from private investment, and the risk of future inflation as money supply growth outpaces output.

Moreover, the Neo-Keynesian fetishization of spending overlooks productivity. Projects like high-speed rail boondoggles or bloated bureaucracies consume resources without delivering commensurate economic value, yet they are justified as “stimulus.” Friedman’s framework, by contrast, would demand accountability: government outlays should align with a stable monetary environment, not serve as a catch-all solution to every downturn. The 1970s stagflation, which validated monetarism by exposing the limits of Keynesian demand management, has been forgotten, replaced by a dogma that equates deficits with virtue.

Consequences of Ignoring Friedman

The consequences of this imbalance are dire. Ballooning debt threatens fiscal sustainability, with interest payments alone projected to surpass $1 trillion annually by the late 2020s, diverting funds from productive uses. The Neo-Keynesian dismissal of monetary restraint has also fueled asset bubbles and eroded savings, as loose policy distorts price signals—outcomes Friedman predicted. Meanwhile, the absence of his rules-based approach leaves policymakers ill-equipped to address emerging challenges, such as cryptocurrency’s impact on money supply or the inflationary pressures of supply-chain disruptions.

 Conclusion

The towering government debt of 2025 is a testament to Neo-Keynesian overreach, a paradigm that venerates spending as an economic panacea while ignoring Milton Friedman’s monetary wisdom. By treating all government expenditure as inherently good, even when it fails to produce tangible results, Neo-Keynesian thought has paved the way for fiscal recklessness. Friedman’s call for monetary discipline and fiscal prudence offers a corrective lens, one that could have tempered the debt spiral had it not been overshadowed. To avert a looming crisis, economists must reconsider their reliance on Neo-Keynesian orthodoxy and revive the insights of monetarism, ensuring that policy prioritizes productivity over profligacy.