Will Federal Spending Be Brought Under Control?

With the federal debt ceiling fight looming in Congress, now is a good time to look again at how much the federal government owes, and whether the new Republican House majority will be able to keep spending under control. Figure 1 shows how federal debt held by the public as a percentage of the economy […]

Super-tight policy is still struggling to control inflation

In october we examined the fortunes of Hikelandia. In this group of eight countries—Brazil, Chile, Hungary, New Zealand, Norway, Peru, Poland and South Korea—central banks have thrown the kitchen sink at inflation. They started raising interest rates well before America’s Federal Reserve and on average have done so more forcefully, too. Yet we found little […]

The Power to Regulate Is the Power to Control

In his 1819 opinion in McCulloch v. Maryland, US Supreme Court Chief Justice John Marshall famously stated what everyone already knew, “the power to tax is the power to destroy.” Americans also knew that the power to regulate imposes costs too, so it is akin to the power to tax. And they are now relearning […]