Bob Murphy

I think the U.S., as it's getting less of a footprint in the global market, that the Fed is not as powerful as it used to be.

I mean, nobody worries about the central bank of some small country somewhere influencing global affairs.

And I think over time that, yes, the Fed, even though it remains powerful compared to any other private company, but in the grand scheme that, yes, its influence is waning.

Sure, great question.

So I've been trying to be fair and balanced on this stuff, because a lot of my libertarian free market colleagues are reflexive free traders, and so am I, that I like free trade, I don't like tariffs per se, I don't like any taxes.

But the points I was making modestly was to say,

If you could get a package, and Trump's chief economic advisor, this was what he was recommending, if you can have a whole package deal where you drastically cut federal spending,

get massive income tax cuts, and then offset that partially with tariff hikes, and you had deregulation.

If you coupled all those together, that would make a lot of economic sense.

So it's true, if you hold everything else constant and just raise tariffs, then yeah, that's just an extra tax, and that interferes with global commerce or whatever, and that per se is not quote good for the economy.

But if it is done in conjunction with all these other pro-growth measures, it could make sense.

I mean, just for one reason,

In general, economists think that sales taxes are more economically efficient than income taxes, right?

That if you're taxing consumption, that doesn't distort things as much as if you tax income, okay?

So just on that narrow point, if you shift away from taxing income and shift to just, you know, taxing goods as they come in, that is a point in its favor.

And also there's the privacy element.

that an income tax besides being economically destructive means everybody has to send records to the IRS about all their dealings.

And so if you could get to a system where you didn't use income taxes, that would be wonderful.

So I think that's partly why historically when the US was just funded mainly through customs duties and such, we had such great growth.

But the problem is you can't raise that much revenue from just taxing imports.