Douglas Holtz-Eakin

In the aftermath of the global rise in long-term rates, last week a panicky Trump Administration trotted out Treasury Secretary Scott Bessent to make a series of announcements regarding planned Treasury purchases of long-dated bonds. Per Bloomberg:

To quickly recap recent trade developments, the United States declined to renew the United States-Mexico-Canada Agreement (USMCA), leaving it up to year-by-year review. President Trump also used Section 338 of the Tariff Act of 1930 to levy 50-percent tariffs on Canadian motor vehicles, alcohol, and dairy in response to supposed trade discrimination by Canada. Intense negotiations […]

One can imagine – well at least Eakinomics can imagine – a situation in which the government budget is balanced, private domestic saving is used to finance private domestic investment, and there is no trade deficit. Everything is nicely in balance. Suppose then, that the government spends more – say $100 billion – or taxes less by the same amount. There result would be a budget deficit of $100 billion and the need to issue $100 billion of Treasury debt.

AAF President Douglas Holtz-Eakin and Director of Trade Policy Jacob Jensen join us to discuss Medicare for All (again), Iran's economic D-Day, and the trade war with Canada.

The Small Business Administration (SBA) would like to change the definition of a small business. The summary of its proposal in the Federal Register is matter-of-fact in tone:

Readers will recall that during the Iran War preseason, the Trump Administration seized Venezuela. It was far from obvious how this fit into the administration's strategic plan, but there was a lot of happy (and unrealistic ) talk about oil supplies for the United States. Now there are reports of an actual plan. The news, as usual, came from the president's Truth Social account:

Treasury watchers are probably aware of the fact that the department said it would increase “by at least double” (to $4 billion) the size of buybacks of longer-dated securities. Secretary Bessent attributed the move to liquidity issues — the need to ensure orderly trading in a “thin” summer market. They are probably also aware of the drama that ensued, in which Bessent mentor and veteran investor Stanley Druckenmiller took to the pages of The Wall Street Journal to sharply criticize the move:

The United States has an affordable housing issue, problem, or crisis. Which of these depends on how optimistic one is. (If you are at all optimistic Torsten Slok's Daily Spark from Tuesday will cure you.) In the course of any discussion about “what to do,” however, the point is inevitably made that most of the policy levers are in the hands of local governments. This was brought home vividly by a paper entitled How NYC Council Legislation Impacts Affordable Housing (hat tip: Thomas Kingsley) prepared for the New York Housing Conference (NYHC).

The opinions expressed herein are mine alone and do not represent the position of the American Action Forum. I am grateful to Dan Goldbeck, Brian Faughnan, Angela Kuck, and Sarah Smith for their assistance. All errors are my own.

The failure of the popular press to appreciate the magnitude of the Trump Administration's regulatory accomplishments (both now and in the president's first term) has been a frustration. Eakinomics finds the burden cost reductions catalogued in Regulation Rodeo ( regrodeo.com ) utterly compelling. Particularly when it comes to deregulation issues, however, most people seem to presume that any reduction in regulation or its costs must mean that some apocalypse has been unleashed.