Property Tax Abolition Won’t Fly in Florida: A Pragmatic Call for Property Tax Reform

Across the United States, homeowners are feeling the squeeze not only in terms of housing costs, but also in terms of increasing property taxes. The National Mortgage Association pointed out that since 2019, the median American has experienced a property tax increase of 27.4 percent (Cotality). The state of Florida is not an exception to this trend. Major Florida cities, such as Tampa, Miami, and Jacksonville, have experienced above-average property tax rate increases. Florida Governor Ron DeSantis seized on the public frustration, leading him to propose abolishing the property tax last month. 

Why Economists Prefer the Property Tax

On some level, I can see why the property tax is preferred over other taxes. A paper from the Organisation for Economic Co-operation and Development (OECD) found that property taxes provide a more stable source of revenue relative to most other taxes (Blöchliger et al., 2015). Property tax is less sensitive to economic downturn because people still need property, regardless of the level of economic prosperity. In terms of distortion, the immobile nature of land can have some influence on homebuilding decisions (Arnott and Petrova, 2002), but is less distortive than the income or sales tax. Out of local tax sources, property tax is the least distortive. While property taxes can be moderately regressive, they are not as bad as sales taxes, excise taxes, or capped payroll taxes. 

Why Homeowners Despise It

I can also see why people despise the property tax. It is not only because about two-thirds of taxpayers believe that the property tax is too high (Harris/AP NORC). The property tax is a large, lump-sum payment that is more visible than the sales tax. Because of the opaque assessment system to determine the property tax amount, taxpayers feel like they have little over a system that seems quite arbitrary. For DeSantis, he views property taxes as oppressive and ineffective, which is why he wants to eliminate them. 

The Libertarian Dilemma

From a libertarian lens, property tax can be viewed as a violation of private ownership because property taxes are a partial seizure of the property one owns. Property tax is like perpetually paying rent to the government. I understand a libertarian impulse to want to eliminate it because it would mean less coercion and more freedom. Upon further examination, abolition is not a viable option because property tax is embedded into local government finance. 

Fiscal Reality Check

The Right-leaning, pro-free-market Tax Foundation released a piece called There's No Good Way to Pay for Property Tax Repeal last month. The first point of consideration is that property taxes account for 70 percent of all local tax revenue. One of the reasons why DeSantis' plan is problematic that he does not have an answer to how he would replace that tax revenue. This gets at the heart of the issue: which tax would replace the property tax? It is not as if the idea of abolishing a tax is unprecedented. There were multiple countries that eliminated the wealth tax because it was so ineffective, yet there are no examples of property tax abolition. We can take a look at why. 

Income tax is collected at the state level. Aside from being a more distortive tax than property tax, relying on income tax revenue would make local governments more dependent on state government. Greater reliance on the state government risks having less liberty, not more. Plus, the Florida state constitution prohibits a state income tax.

What about the sales tax? The sales tax is subject to volatility, whether seasonal cycles, economic cycles, or disasters, such as hurricane season in Florida. Texas was considering the idea of abolishing the property tax. To do so, the Texas Taxpayers and Research Association calculated that replacing all the property tax would require a sales tax of 19 percent, which would be an approximate increase of 11 percentage points. Even when Idaho reduced property tax, it was offset by a sales tax increase. For Florida to replace property tax revenue, the Florida Policy Institute estimates that Florida would need $50 billion. 

Local government does not have many other tax levers aside from the property tax. Whether it is sales, income, excise, or corporate tax, that would in most cases come from the state level. Taking away property tax would make local government more dependent on state government. A reason why property tax abolition has not happened at scale is because no feasible replacement maintains fiscal balance and local autonomy. 

If Florida were to abolish the property tax, cities and counties across the state would face a multi-billion dollar gap. It would either require a collapse of local government or local government would lose autonomy to the Florida state government. Would Florida honestly be more free with fiscal collapse or if local governments decide to rely on more regressive forms of taxation? Property tax abolition would likely increase coercion because local choice would disappear, state bureaucracy would grow, and taxation would become less transparent. 

A Libertarian Case for Reform, Not Abolition

Property tax is the structural foundation that keeps local government going. They fund schools, police departments, roads, and local services. A pragmatic libertarian approach is not to fantasize about abolition, but rather reform tax policy. The James Madison Institute (JMI), which is Florida's conservative/free-market think tank, takes this approach. JMI views the property tax as increasingly burdensome, but stops short of abolition. A few suggestions that JMI provides include homestead exemptions, appraisal caps, levy caps, sales tax swaps, and gradual elimination of school-property tax millages. Other structural reforms, including assessment reform, zoning modernization, and spending caps, would help make the property tax reform options more lasting. With firm spending restrictions, property taxes and limited government can co-exist. But the way for that co-existence to occur needs to be with arithmetic and solid reform ideas, not alchemy or wishful thinking. 

Trump’s 50-Year Mortgage Plan: Slow-Walking Americans Into Generational Debt

Housing costs in the United States continue to skyrocket, which makes homeownership an increasingly elusive endeavor. Especially since owning a home is one of the essential staples of the American Dream, politicians are even more gung-ho on finding new ideas to ease the burden of buying a house. One of the proposed ideas that has grabbed headlines is Trump's idea of extending the standard mortgage term from 30 years to 50 years. The Trump administration is pitching this idea as a way to lower monthly mortgage payments and to open the door to homeownership. Before passing such a policy, the Trump administration should ask what sort of economic or policy implications a 50-year mortgage would have for the housing industry. 

Trump's Illusion of Affordability

Lowering monthly mortgage payments sounds like a dream come true. The problem is that it is too good to be true and comes with a steep tradeoff. Although the principal is spread out over a longer period, so are the total interest payments. Because of that longer time horizon, interest payments will be much higher. One estimate from Realtor.com puts the total at approximately double of that of a 30-year mortgage. An estimate from the Associated Press calculates that the average home will cost an extra $389,000 in interest payments in comparison to a 30-year mortgage. Lower monthly payments today come at the cost of decades of additional debt. 

Another Hidden Cost: Slower Equity and Higher Interest

A longer time horizon creates another issue. Since the majority of a mortgage payment goes to interest instead of the principal, it can take decades to reduce the loan balance. This means that the home equity stays minimal while most of the debt remains outstanding. What Trump is selling as "affordability" becomes deferred wealth-building. The tradeoff is lower monthly payments today for higher interest payments over time and a weaker financial position in the future. This does little to build lasting financial security. For decades, the borrower's wealth is trapped under the weight of interest and debt. 

Similar experiments abroad show the limitations of ultra-long mortgages. In Japan, some regional banks have offered 50- to 60-year home loans, yet these loans have not meaningfully improved affordability. Homeowners simply remain in debt longer, often into retirement (Harimaya and Jinushi, 2025). In the United Kingdom, 35- to 40-year mortgages have grown in popularity, but they have not lowered the overall cost of housing. They have only extended the period during which borrowers are highly leveraged (Franklin et al., 2017). 

A study of 17 advanced economies over more than a century shows that expanding mortgage credit does not reliably increase housing construction. Instead, the financialization of housing markets can inflate prices without producing more homes (Kohl, 2020), a dynamic that a 50-year mortgage would most probably amplify. The lesson here is clear: stretching debt over decades does not address home affordability.

Source: Kohl, 2020, Socio-Economic Review

Additional Financial Risks of Ultra-Long Mortgages

There is another tradeoff aside from 21st-century serfdom and paying more in interest payments. The Federal Housing Finance Agency (FHFA) shows that longer terms increase exposure to interest-rate changes, housing market downturns, and default risk (Larson et al., 2019). In other words, there are additional financial harms due to the longer time horizon that Trump is not thinking about because regardless of his motives, the political appeal does not change its economic flaws. 

Freedom of Contract versus Government Distortion

On the one hand, adults should have freedom of contract and the ability to voluntarily enter a contract, no matter how stupid it might seem. More options could theoretically create a more competitive market. On the other hand, this proposal is not about independent private loans. It is about government-backed loans. The problem with government-backed loans is that the upside is privatized, whereas the downside is subsidized and underwritten by taxpayer dollars. This creates moral hazard while artificially creating demand for housing.

Conclusion: A Policy That Misses The Real Problem

Ultimately, a 50-year mortgage has the illusion of "helping" with a lower monthly payment, but does a fine job of hiding the costs and trade-offs. Like with many government policies, this 50-year mortgage idea treats the symptom instead of the disease. It does nothing to address the main culprit, which is a manufactured housing shortage caused by well-intentioned government meddling. This is a topic I have covered multiple times, whether it is in the context of land-use regulations, rent control, redlining, the mortgage interest deduction, or making single-room occupancy all but illegal. The policy might be different but the outcome is the same: Government steps in to "help" the housing market and somehow manages to make matters worse. Funny how that works. 

Paying Americans to Pay More: The Economic Nonsense of Trump’s Tariff Dividend Plan

Very few things can be more alluring to voters than "free" money. Whether it is COVID-era stimulus checks, student loan forgiveness, or the child tax credit expansion, the idea that the federal government can cut a check and make everything hunky dory is populist hokum. To quote Milton Friedman, "there is no such thing as a free lunch." The latest twist on this handout scheme comes from the White House. This past Sunday, President Trump posted such a proposal on Truth Social: a $2,000 tariff rebate for low- and middle-income households. He frames it as a "dividend" to present it as a reward for his tariff policy. I would frame it as an insincere policy that, much like the rest of his tariff policy, is poorly thought out.

Mismatch Between Dividend Cost and Tariff Revenue

Trump is promising a $2,000 check funded by the tariff revenue. Similar to his proposal to replace the income tax with tariff revenue, the MAGA math does not math. According to the bipartisan Committee for a Responsible Federal Budget (CRFB), Trump's tariff dividends will cost $600 billion per year. This far exceeds the projected $300 billion in revenue from Trump's new tariffs. This math refutes Trump's claim that there is so much tariff revenue that he can both pay out these dividends and "substantially pay down national debt." This does not pay down the debt, but rather adds to it. This proposal is also within the context of the federal government racking up a $1.8 trillion deficit this past fiscal year. 

When the Dividend Defeats the Tariff

Even if the numbers somehow balanced, the policy would still fail on principle. This past April, I discussed Trump's tariff rationales. I detailed how none of them made sense on their own, never mind when combined. One of those rationales from the Trump administration was to increase government revenue. Especially since the rebates exceed the revenue by about $300 billion, rebating it directly to citizens defeats the Trump administration's purported fiscal purpose.  

It also undermines his goal to revive domestic manufacturing. Why? The point of the tariff with the manufacturing revival rationale is to make domestic goods or services cheaper relative to foreign ones. With the dividend check, it offsets the increase in import prices, which means that the consumer sees the same effective cost as they did pre-tariff. Some might still opt for the cheaper domestic option, but the dividend blunts the intended goal of boosting domestic manufacturing. 

Even worse, tariffs rarely go unanswered. Trading partners routinely implement retaliatory tariffs in response with tariffs of their own, targeting such industries as machinery, farm goods, and manufactured products, which are some of the industries that Trump purports to champion. Those retaliatory tariffs squeeze American producers, blunt the competitive edge gained from tariffs, and further illustrate how tariffs are an economic example of metaphorically shooting oneself in the foot. 

Trump Inadvertently Admits That Tariffs Harm Americans

This dividend is more perturbing than the dividends subverting his own administration's rationales for the tariffs. Trump claims that the tariffs will "make America rich again." If tariffs were truly enriching, there would be no need for a dividend in the first place. The fact that there is a dividend is a tacit admission that tariffs are harmful to the everyday American. It distracts from the reality that it is the U.S. consumers that pay for Trump's tariff tomfoolery. Last May, I covered how over a dozen studies confirm that Trump's tariffs from the first term increased consumer prices. On top of that, a working paper from the National Bureau Economic Research (NBER) released last month illustrates how domestic consumers paid the price of Trump's tariffs from his first term and that the cost of the tariff exceeded the government revenue collected (Flaaen et al., 2025).

Consumer price increases were not only observed during Trump's this first term. They are showing up in Trump's latest round of tariffs. Estimates from the Tax Foundation suggest that tariffs imposed under the current regime have already pushed retail prices up by about 4.9 percentage points relative to the pre-tariff trend. Part of the price increase comes indirectly when domestic firms raise their own prices after tariffs on imports make foreign goods more expensive and less competitive. 

Despite the increase, the pass-through to consumers is less than the full tariff rate, which points out that firms absorbed some cost and consumers acted cautiously, making the overall price impact more modest than many initial estimates suggested. A more modest price increase does not make this a win. These smaller costs still reflect economic inefficiency (also known as deadweight loss) since resources are diverted toward less competitive domestic production and away from the most efficient global suppliers. 

Tariffs and Inflation

Individual consumer price increases were not only due to the tariffs. These tariffs would have an inflationary effect. Both the St. Louis Federal Reserve (Soyres et al., 2023) and the San Francisco Federal Reserve (Jordà et al., 2022) found that the COVID-era stimulus checks contributed to the 2021-22 inflation. The COVID stimulus checks can be used as a proxy for what would happen. Both inject purchasing power into households, i.e., aggregate demand spikes. Since it is a one-time windfall, it would more likely lead to a burst in consumption (and not saving), much like with the stimulus checks. What makes the tariff dividends worse is that tariffs raise the cost of goods, which limits supply. Given that the tariffs raise prices while the rebates raise consumer demand, this dividend could very well create even more inflationary pressure than the COVID stimulus checks.   

Postscript

When all is said and done, Trump's dividend is more than cognitive dissonance or the mental gymnastics done to be apologetic for protectionism. It is a self-inflicted parody of supposedly sound economic policy. What Trump is doing is taxing the American people, laundering that money through Washington, and giving part of it back as a "dividend" so he can pat himself on the back and pretend that he solved a problem that he himself created. This is akin to setting your house on fire and then congratulating yourself for roasting some marshmallows and creating some s'mores over the ashes of what was once your home. With tariffs, consumers get burned through higher prices, fiscal discipline goes up in flames, and economic logic goes out the window. This is what happens when the U.S. government tries to fix a problem that it created: the everyday citizen pays the price while sacrificing freedom. Sadly, this is what passes for economic "wisdom" in 2025. 

Privatizing Air Traffic Control Can Work, But Only With Smart Execution

If you live in the United States and are looking to travel by airplane domestically anytime soon, you might want to reconsider. Last Thursday, the Federal Aviation Administration (FAA) announced a proactive measure to reduce flights by 10 percent at 40 high-traffic airports across the country. The reason for this reduction is there are air traffic control (ATC) staff shortages created by the government shutdown that has yet to end. Similar to when I discussed SNAP benefits last week, it astounds me how something as essential as air travel is more vulnerable when there is a government shutdown. Unlike essential services funded independent of annual appropriations, ATC operations under the FAA grind to a halt during political impasses, which shows how dependence on government budgeting makes even critical infrastructure hostage to politics. This latest fiasco, which could have been easily avoided, is one of many reasons why air traffic control needs to be privatized. 

FAA's Failure to Modernize ATC

When it comes to ATC, the FAA has decidedly and woefully dropped the ball. Take a look at this capstone memorandum that the Office of Inspector General released in September 2025. This summary of 50 OIG audits covers the FAA's Next Generation Air Transportation System (NextGen), which was the FAA's modernization program that began in 2003. This two-decade, $36-billion program to modernize achieved only 16 percent of its intended benefits. You can read more criticism based on this OIG memorandum here. I will say that the Government Accountability Office (GAO) and its September 2024 report concurs. According to the GAO, 51 of its 138 systems are unsustainable, whether due to lack of parts, outdated functionality, or an inability to fund, the latter of which is rich is given how much money the government has already thrown at ATC modernization. 

FAA's Institutional Challenges

The GAO is correct to point out that the FAA is slow to modernize. That is not a mere glitch or an issue of throwing enough money at the problem. The Cato Institute argues in its Handbook for Policymakers that the FAA, being funded by congressional appropriations and constrained by political oversight (e.g., the FAA is re-authorized every five years), makes it inherently and systematically ill-suited to manage ATC. The reason is because the incentive is to protect such programs as NextGen instead of innovating. Because every budget line is subject o congressional oversight and political trade-offs, FAA managers face incentives to avoid risk and preserve existing programs, even when modernization would yield long-term savings. 

Instead of cost-saving reforms, Congress is incentivized to demand politically motivated programs. This does not address the cost growth, schedule delays, or performance shortfalls that are endemic within the federal procurement regulations. Whether privatization could eliminate every challenge, what is clear is that the chronic delays in NextGen highlight how the FAA's political funding model and risk-averse procurement system hinder innovation. 

Canada as a Model for ATC Privatization

The FAA's performance is a contrast to how Canada has managed ATC, a structure that the Cato Institute has championed. In 1996, Canada privatized its ATC into a self-funded nonprofit corporation called Nav Canada. ATC funding was converted from a ticket tax to a user fee. Nav Canada has won multiple awards for having modern ATC technology and for being one of the safest ATC systems in the world. To support this point, a 2005 GAO report discussed what happened when Canada, Germany, New Zealand, and Australia privatized ATC in the 1980s and 1990s. The result was that privatized systems cut costs, invested in new technologies, and either maintained or increased safety. 

Understanding the Natural Monopoly in ATC: Privatization's Limitations

There is a nuance I would like to discuss today that I did not cover in my 2015 piece on ATC privatization. Much like when I analyzed water fluoridation earlier this year, the ATC industry has components of a natural monopoly: high fixed costs, safety and regulatory barriers, and large scale. Competition is possible for the airport towers (terminal services) in terms of contracting those services out to private providers, but the en-route services have the hallmarks of a natural monopoly (Eno Center for Transportation). The en-route, national network, which is the biggest component of ATC, is going to function as a monopoly, whether private or public, due to strong economies of scale and network externalities. Even the NAV CANADA success cited by the Cato Institute is privately owned, yet it remains a monopoly because it is the only ATC provider in Canada. Plus, safety oversight is still provided by the Canadian government through Transport Canada.

This gets to another point: a private monopoly has stronger incentives to innovate and contain costs because its survival depends on performance rather than political appropriations. This allows for increased likelihood to adopt newer technology, lower costs, and improve efficiency, whether those incentives are profit motive, market discipline, customer accountability, or operational autonomy that allows for faster and smarter implementation. 

Challenges of Privatization: Why Execution is Key

At the same time, privatization by itself does not guarantee success. A private monopoly still makes ATC prone to avoiding price capture, access denial, under-investment, or over-charging. The United Kingdom semi-privatized in the early 2000s. However, due to the financial difficulties following 9/11, the UK's National Air Traffic Services (NATS) had to be bailed out by the UK government in 2002. Even the aforementioned 2005 GAO study points out that these improvements were not strictly due to privatization.  It is not privatization itself, but rather governance during a transition to help ensure success.

Principles for Successful ATC Privatization

For privatization to succeed, there needs to be an independent, stakeholder-based board structure. A user-fee system linked to transparent cost-recovery and actual usage helps. So does an independent safety and economic regulator because it ensures safety without micromanagement. Many of these privatization efforts needed contingency funds to make sure that they were solvent (GAO, 2005). As the UK example shows, the transition needs to be gradual, negotiated, and with safeguards. If not, privatization can go off the rails, so to speak. It is the managerial, financial, and regulatory reforms that the governance allows for that determine privatization's success. Privatization does not guarantee success, but it at least establishes the correct incentive structure that the FAA simply does not offer. 

Conclusion

Short of full privatization, converting ATC into a public utility while implementing a user-fee payment system is one of the best courses of action. As the Reason Foundation details, there are 98 countries that have transitioned towards a user-fee payment system. They have more advanced technology and they are independent of the government budget process, the latter of which does not make it prone to rent-seeking, shutdowns, or other shenanigans that come with government budgeting. When done correctly, privatization is a great way to improve ATC. Until the American people can demand serious FAA reform, the United States will continue to suffer from subpar air travel. 

From Furniture to Semi-Trucks: When "National Security" Tariffs Go Wild

When you think about a country beefing up its national security, you might think about missiles, tanks, submarines, or cyber defense. For Trump, it looks a little different. Last month, the Trump administration implemented furniture tariffs, including a 25 percent tariff on upholstered furniture and kitchen cabinets (as of January 1, they will increase to 30 and 50 percent, respectively); as well as a 10 percent tariff on softwood lumber. On top of the furniture tariffs, there are the 25 percent tariffs on medium- and heavy-duty trucks that went into effect last Saturday. 

These tariffs were authorized under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs on imports deemed a threat to national security. In other words, we have to be on the lookout for killer kitchen counters and heat-sinking sofas. Tongue-in-cheek remarks set aside, Trump's manipulation of Section 232 is more than merely about the economic costs of tariffs, as furniture outlet IKEA deciding to hike furniture prices in response to Trump's furniture tariffs illustrates. There are major national security implications for what Trump is doing. 

As the American Trucking Associations pointed out, Trump's truck tariffs will increase costs for carriers, increase operational costs for fleets, reduce freight volumes, and disrupt the integrated North American supply chain. Keep in mind that national security is not solely about militaries. National security depends on robust logistics, well-functioning supply chains, and a healthy economy. When logistical readiness is diminished, supply chain resilience is eroded (see Supply Chain Today chart below), and the weak rationale creates policy uncertainty and subsequent delay in investments. In short, what Trump's tariffs on trucks do is undermine national security. 

While furniture and lumber tariffs do not have the same impact on logistics or the supply chain, they certainly weaken the economy. As the National Association of Home Builders brings up in its analysis, Trump's tariffs will likely raise housing and construction costs (up to an additional $10,000 per home), strain supply chains that already heavily depend on imports, exacerbate a housing shortage, and hamper the domestic building sector when domestic production is unable to meet demand. This is even more nonsensical given that about half of U.S. lumber imports come from Canada, a long-standing ally and trade partner. Similar to the truck tariffs, national security flows from economic strength, resilient supply chains, and robust global ties. What the furniture tariffs do is weaken those essential foundations.  

When all is said and done, Trump is not making the United States safer with tariffs. He is making it weaker. By weaponizing "national security" to justify his blatant protectionism, his administration undermines the very pillars on which true national security rests: a strong economy, reliable supply chains, and trusted alliances. Instead of fortifying our defenses, his tariffs drive up costs, strain critical industries, and alienate long-standing partners. National security is built on openness, cooperation, and resilience, which is similar to what I argued last year about how free trade improves national security. If the actual goal is to keep the United States secure, weakening economic foundations and global partnerships is not strength. It is protectionist stupidity.

The SNAP Dilemma: Addressing Hunger While Perpetuating Poverty and Government Dependency

The United States federal government is heading toward the longest government shutdown. Aside from the COVID-era Obamacare premium tax credits that precipitated the shutdown, another piece of policy was caught in the crossfire of this debacle: the Supplemental Nutrition Assistance Program (SNAP). More colloquially known as food stamps, SNAP is a federal welfare program to provide monthly food benefits to low-income households. The reason why this became a point of contention is that without a budget passed, SNAP benefits would be paused effective November 1. Last Friday, a couple of federal judges ordered the Trump administration to continue SNAP benefits amid the shutdown. There is still a possibility of those benefits being delayed a bit. 

It was not simply that the SNAP program was saved by a federal injunction that made me think more profoundly about SNAP benefits, an injunction that shows how its near-total reliance on federal funding makes the SNAP program fragile. According to the calculations of the Right-leaning American Enterprise Institute (AEI), if the SNAP benefits had been paused, 2.9 million people would have been pushed into poverty. When I read that, I thought to myself, "Really? That many?" The average monthly SNAP payment is $190.59 per person or $356.41 per household (or $4,276 per annum). After accounting for government transfers, the Congressional Budget Office (CBO) found that average household income for a low-income household was $48,700 (CBO, p. 18). This would mean that slightly less than 10 percent of income post-transfer came from SNAP. 

Although the average enrollment period for SNAP is under a year, the fact that a one-month disruption can cause so much chaos shows how reliant people have become on the government for something as basic as food. It is quite the indictment of the welfare state when nearly 3 million people can end up in poverty due to administrative or political shifts. While it illustrates SNAP's role as short-term relief, it does not contradict the concern that the very existence of SNAP creates structural dependency. This structural dependency is not the only systemic issue with the SNAP program.

• Poverty Relief: SNAP benefits are modest and temporary. They only help against short-term shocks and do not pull a household out of poverty. Furthermore, this program does not address the root causes of poverty in the way that a program such as workforce development would. The fact that SNAP benefits are created to help households survive instead of improving upward mobility shows the limits of the program.
• Administrative Issues: As I pointed out last May, the SNAP program has had a rising overpayment problem in the past decade. SNAP overpayments have increased from 2 percent in 2012 to 10 percent in 2023. How can people rely on such a program for food delivery when it is prone to basic administrative failure? 
• Unintended Health Consequences: In another piece, I wrote about how SNAP exacerbates obesity. SNAP might address immediate hunger, but it doesn't help with long-term health issues or economic mobility, especially since SNAP subsidizes caloric intake without accounting for nutritional value. If a recipient has worse health outcomes as a result of SNAP, it hampers their ability to work or advance economically. In other words, it perpetuates poverty and keeping people on government supports instead of helping alleviate poverty. 
• Disincentive to Earn More: SNAP's eligibility cliffs, which are where benefits phase out sharply as income rises, create a modest disincentive for recipients to increase earnings because small pay raises can lead to a disproportionate loss of support. This can make low-income households more reluctant to move upward financially, thereby staying in a lower income bracket. 
• Disincentive for Self-Sufficiency: Research suggests that children exposed to welfare programs often develop more favorable attitudes toward government dependence and place less emphasis on work (e.g., Hartley et al., 2024; Barón et al., 2008). Although SNAP benefits last less than a year on average, some households participate repeatedly or episodically, which exposes children to government support. This repeated exposure, especially combined with the exposure of other welfare programs, can signal that the government is the primary safety net in life, thereby dampening the incentive for economic self-sufficiency.

Ultimately, SNAP symbolizes the tension between wanting to provide short-term relief for those in need versus long-term economic mobility. It is true that there is evidence that SNAP benefits can help with hunger relief, especially when dealing with such short-term shocks as job loss or sudden illness. It is also true that its modest benefits, the administrative inefficiency, eligibility cliffs, and unintended consequences (e.g., poorer health outcomes) do little to lift SNAP beneficiaries out of poverty. One of the core problems is that a program designed as a temporary safety net becomes a crutch for longer-term dependence a variety of government programs. That is when the focus shifts from self-reliance to dependence. 

By creating a system in which people rely on the government for something as essential as food, it perpetuates economic vulnerability instead of promoting economic self-sufficiency. If the idea is to help low-income Americans thrive, policymakers need to take a harder look at reforms that steer people more toward economic stability rather than temporary sustenance and perpetually being in survival mode. 

Milei's Monetary Tightrope: Argentina Is Caught Between a Crawling Band and Whatever Comes Next

Last Sunday, I left Buenos Aires after spending 40 days. It suffices to say Argentina has been on my mind a lot. I have mostly examined Argentina through an academic public policy lens, but it was intriguing to see firsthand how it is to live there for a bit and to talk with Argentineans about life in Argentina. I knew that Argentina had its problems. It went from being one of the world's most powerful economies to succumbing to a populist and protectionist stranglehold of high taxes, tariffs, corruption, profligate government spending, capital controls, and currency controls. No other country in history went from being an economic powerhouse to middle-income economy the way Argentina did. 

The Challenge Ahead for Milei

I knew that whoever would try to clean up this mess would have their work cut out for them, especially given that President Javier Milei inherited one of the least free economies on the planet. It is not simply a matter of considerable political opposition that has gotten in the way. It is trying to untangle the quagmire of decades of poor economic and monetary policy choices that make it difficult. Bridging the gap between economic theory and implementing policies in practice can be quite tricky, as Milei has found. I realized this was especially the case for Milei's monetary policy. 

Understanding the Crawling Band versus the Fixed Peg

When I was in Argentina, I noticed considerable exchange rate fluctuation. I had to check daily how many pesos a dollar could purchase because it did change that drastically. As I discovered during my time in Buenos Aires, Milei has been implementing what is called a crawling band. A crawling band is an exchange rate system where a currency can fluctuate within a set range (a "band") that shifts gradually over time according to predefined rules or market conditions. The band currently is maintained between 1,000 and 1,400 Argentinean pesos (ARS) to the dollar. The premise is that it combines short-term stability with long-term flexibility. This is supposed to help avoid the shocks of a full float and issues that come with the rigidity of a fixed peg. 

Argentina had implemented a fixed peg prior to this latest crawling band. That fixed peg was unsustainable. The capital controls drained the foreign exchange reserves and incentivized importers and exporters to manipulate invoices, thereby undermining confidence in the system. A crawling band was more aligned to the market, allowed for greater transparency, and increased price signaling.  

Why a Floating Currency Is Ideal

While a crawling band is an improvement over a fixed peg, what bothers me in part is that Milei is a minarchist, which is someone who wants government only to perform the most basic of services. He studied Austrian economics and is quite skeptical of government intervention, especially when it comes to central banks. That is why it is so peculiar that he would go along with a crawling band, which is a form of government interventionism. It makes me wonder if he is abandoning his economic training or he is dealing with a clash of his ideals versus the reality of Argentina's situation. 

Ideally, Argentina would have a free floating peso. After all, a free floating currency is a good metric of a mature, stable economy. A free-floating currency allows market forces to determine the currency's value, providing a transparent signal of economic fundamentals and reducing the distortions caused by artificial pegs or interventions. It also encourages fiscal and monetary discipline, as policymakers cannot rely on fixed exchange rates to mask underlying economic weaknesses.

The problem is that Argentina's economy is neither mature nor stable. Argentina's current economic conditions, which are characterized by high inflation, low foreign reserves, persistent fiscal deficits, and weak institutional credibility, make a pure free-floating peso highly vulnerable to sharp devaluations and financial instability. A free float right now could trigger severe exchange rate volatility, capital flight, and a worsening of the current account.

That is not mere speculation. From 1991 to 2001, Argentina had pegged the peso 1:1 to the U.S. dollar. Fiscal deficits and a recession made the peg unsustainable. When the peg was abandoned, the peso plummeted and lost about 75 percent of its value in a matter of months. Hyperinflation and social unrest followed. I would not be the least bit surprised if this recent history has influenced Milei's decision to implement a crawling band. 

Lessons From Other Economies Liberalizing Currency Too Soon

Argentina is not the only country that felt pain after transitioning to a free-floating currency too quickly. In 1998, Russia allowed its ruble to free float in response to fiscal crisis. As a result, the ruble lost 70 percent of its value and inflation spiked. Prior to October 2008, Iceland had a managed float system tied to inflation targeting. Because Iceland had large foreign liabilities and small foreign reserves, its banking system collapsed and Iceland had to free float its krónur. In a matter of a few weeks, the krónur's value dropped by half and inflation surged. In 2018, Venezuela also tried to allow for floating mechanisms amid hyperinflation. However, it made matters worse. 

The takeaway here should not be that floating exchange rate systems are bad. On the contrary! A country that can manage a floating exchange rate system can handle the volatility and absorb the shocks that comes with letting the currency freely move. That is because such economies have the fundamentals to do so, whether that is a credible monetary policy; a sound fiscal policy; deep and liquid financial markets; or public and investor trust. 

Skepticism Behind Argentina's Crawling Band

The case studies above show a few commonalities with why their transition to a floating exchange rate system went awry, whether it was weak fiscal conditions, limited reserves, poor institutional credibility, or sheer panic. Argentina's current plight has such conditions. As of August, Argentina had about $33 billion in foreign reserves. In February, BNP Paribas estimated that Argentina would need about an extra $11-20 billion before the October elections to be able to lift the exchange controls. While the recent currency swap could help improve Argentina's reserves, I remain skeptical that it would be adequate to get Argentina off the crawling band:

• If the exchange rate approaches or exceeds the band in place, the central bank needs to use foreign reserves to defend the peso. Things seem to be improving, but as Argentinean economic history shows, that could change in a heartbeat. 
• Argentina still has an external financing gap of $15.2 billion. While Milei has done a good job of fiscal consolidation by reducing deficits, there is a question of whether it is sustainable, whether due to political opposition or social unrest. The midterm elections on Sunday suggest that Milei is on to something, but knowing Argentina, that could change. 
• The currency swap does not address the real exchange rate misalignment. In February, the central bank set the crawling peg at 1 percent per month. However, inflation in 2024 was 2.7 percent per month. That is a significant improvement from what it was before, but it still creates a gap. As long as domestic inflation outpaces the crawl of the peso, it will hurt export competitiveness while worsening the current account, which echo some of the unintended consequences that the Competitive Enterprise Institute warns about with such currency manipulation. Without addressing this gap, the currency swap is a temporary fix. 

As the Cato Institute illustrates in its criticism of the crawling band, when the gradual depreciation lags behind the inflation, it mirrors similar structural issues that resulted in the 1994 Mexican peso crisis and the 1997 Asian financial crisis. This could be more problematic if the currency swap does not go through or is discontinued. With this hybrid regime, speculators know the direction of the currency adjustment, which creates greater speculation. This expectation of a sharper devaluation encourages capital flight, which forces the central bank to use more reserves. This both undermines the stabilization effort and heightens the risk it was meant to prevent.  

Milei Needs an Exit Strategy

Here is my other issue with Milei's crawling band. The crawling band is often seen as a transitory regime. But what is Milei transitioning towards? Is it a free-floating peso? Is it dollarization? Is it a fixed regime? Milei's lack of an exit strategy plan makes the transitionary regime seem temporary. Investors are attuned to that lack of a plan, and as such make investors weary of investing in Argentina. Since there is not a rules-based adjustment system in Argentina, it can be viewed as a political tool rather than a credible anchor to lead towards long-term growth. Without a clear strategy, markets are not going to have enough confidence in Argentina. As the Peterson Institute for International Economics points out, a substantial currency swap line without deeper reforms will unlikely save the peso in the long-run. 

An Endgame That Could Work

As stated above, a free-floating system would be ideal. It allows market forces to set prices, it signals economic fundamentals, and it incentivizes monetary and fiscal discipline. Conversely, Argentina's structural weaknesses would make a full floating peso risky in the short run, much as history has taught us. While imperfect and prone to amplifying risks if mismanaged, it is the most viable mechanism in the short-run. My ultimate personal preference is a free-floating currency, but only when the Argentinean economy is ready for it, which it currently is not. 

Milei's crawling band could be seen as a short-term pragmatic compromise towards dollarization or ultimately a floating currency. It could be argued that markets need some gentle guiding in the short-run to reach long-term liberalization. That being said, the Milei regime needs to make the transitional crawling band head towards a credible currency system if he has any chance of a liberalized currency system to work. 

Milei could announce fiscal rules around spending limits or deficit caps. A published widening schedule or intervention triggers could improve transparency, thereby improving market confidence. Such monetary rules as a base money growth ceiling or inflation targeting paths could also help. Adhering to rules would improve institutional credibility. So would cutting public sector largesse, eliminating distortive subsidies, publishing public accounts, or ending the monetization of deficits because it signals to the markets that Argentina is breaking cycles of its dysfunctional past instead of doing it for optics' sake. Without reserves, fiscal anchors, institutional credibility, or a rules-based endgame towards a more liberalized currency regime, Milei's half measures would most likely send Argentina into more economic chaos. 

The Bank Secrecy Act at 55: Costly, Ineffective, and Still Violating Your Financial Privacy

Today marks the 55th anniversary of the Bank Secrecy Act (BSA), a law that has immensely shaped the relationship between financial institutions, the government, and individual privacy. Enacted in 1970, the BSA was designed to help detect and prevent money laundering, tax evasion, and other financial crimes. The BSA mandates the reporting of large cash transactions over $10,000; suspicious activities that might indicate criminal behavior, regardless of transaction amount; and certain foreign financial accounts.

The BSA was initially meant to regulate banks only. In the 1980s, this coverage extended to casinos and currency exchangers to fight the War on Drugs. Securities brokers were added to the list with the creation of the Financial Crimes Enforcement Network (FinCEN) in the 1990s. The Patriot Act significantly broadened the BSA's reach by extending anti-money-laundering (AML) obligations to a wide range of financial institutions. In the 2010s, FinCEN managed to extend the BSA to such companies as PayPal, Venmo, and Western Union. The Anti-Money Laundering Act of 2020 significantly updated the BSA by expanding its scope to include digital assets, requiring the reporting of corporate beneficial ownership, and strengthening FinCEN's enforcement and data-sharing powers. 

By requiring banks, credit unions, and other financial institutions to collect this level of data, the BSA has turned private institutions into surveillance agents for the state. The purpose of the Fourth Amendment was to prevent government intrusion into private affairs without judicial oversight. With the BSA, the government can monitor, store, and analyze citizens' financial data without ever proving wrongdoing. The Supreme Court ruled in Miller v. United States (1976) that there is no reasonable expectation of privacy in bank records. As such, law enforcement can use this Supreme Court case as precedent to gain access to large amounts of financial data under the guise of crime prevention. For more on the constitutional issues with the BSA, you can read this Coin Center report here.

Speaking of crime prevention, how is that going? Financial institutions employ over 14,000 individuals and spend upwards of $8 billion annually to comply with BSA regulations. What do the American people get for that? Has financial crime dropped as a result of the BSA? It is difficult to tell. This is not simply because the FinCEN interim director said in 2022 that there are no precise metrics to answer that question. The Government Accountability Office (GAO), which is the legislative watchdog, had something to say on the matter. More specifically, in a 2022 GAO report, the DOJ said that there is such a data overload that they are unable to meaningfully prioritize the data. That lines up with a 2019 GAO report stating that it was unable to determine whether the reporting results in prosecutions. 

According to the Bank Policy Institute, less than 4 percent of Suspicious Activity Reports (SAR) that banks have to file per BSA mandate have any sort of follow-up. Only a small subset of these result in arrest or conviction. Looking at last year, out of the 27 million reports filed for the BSA, the IRS only initiated 372 investigations (or less than 0.001 percent). Not only are banks wasting countless hours and spending $8 billion annually to comply with the BSA, but there are many false positives or low-value leads. This minuscule benefit also undermines the justification for violating civil liberties. 

Plus, it has a chilling effect in the finance industry. As the Competitive Enterprise Institute (CEI) is right to point out, the BSA has the ability to discourage small banks and fintech firms from innovating since they are focused on regulatory compliance instead of serving customers or developing new products. This concept coincides with a 2022 Cato Institute report on the BSA's inefficacy: "These rules have also likely contributed to financial firms' hesitancy to work with emerging industries, such as cryptocurrency-related companies and blockchain-based technologies." Every dollar spent satisfying redundant filings is a dollar not spent building new financial products, expanding access to credit, or improving cybersecurity. The large compliance costs also make it easier for large incumbents to maintain market concentration.

The mission creep over the decades turned a narrow crime-fighting measure into a system of massive financial surveillance. The banks should decide what information they collect, who they do business with, and what risks they are willing to take on. If law enforcement wants to access the data, they should get a warrant. Increasing the threshold to adjust for inflation or removing the reporting requirements of the BSA would be inadequate because it minimizes, but does not eliminate the scope of its harm. The only prudent measure that would protect civil liberties while removing regulatory waste would be to repeal the BSA in its entirety, much as CEI has argued for 25 years. Letting it continue for another year would cost the American people much more than a pretty penny. 

Trump’s $100K H-1B Visa Fee Is a Protectionist Penalty on Innovation and Growth

About a month ago, President Trump imposed a staggering $100,000 fee on each H-1B visa, which is a non-immigrant visa that allows U.S. employers to temporarily hire foreign workers in specialty occupations (e.g., STEM). Per his executive order, Trump believes that the H-1B program is displacing skilled Americans while posing a national security risk. Trump's concern is that foreign workers replace American workers in tech fields and that the program is exploited for labor cost reduction, although the Federal Reserve Bank of Richmond found that to be untrue (Morales, 2025). It is true that the fee does not apply to current holders or renewals, but it will have damaging effects all the same. 

I wanted to hold off on writing on this topic until there were at least some studies showing estimates, however preliminary they might be. Now I have something to write about. A study from Oxford Economics looked at the effects of Trump's immigration policies. The study shows that there will be 750,000 legal immigrants, which is 140,000 fewer immigrants than prior to Trump's policy. The study does not isolate the visa fee's effects because it is intertwined with other policies. At the same time, the fee considerably contributes to this slowdown of skilled labor inflows. This lines up with the prediction of JPMorgan Chase's economists that Trump's fee will lower H-1B visa authorizations by as many as 5,500 per month. Another major consequence of this fee is that, according to market research firm Forrester, buyers ought to expect a 2-3 percent increase in onsite billing rates for new contracts because of the higher labor costs.

There are no other visa fees to compare this to because there has never been anything in U.S. economic history this exorbitant. That is why I have to go to the next-best proxy: the H-1B cap. The cap is different in that it is a hard limit. Once the cap is reached, there are no new visas. At least with the visa fee, a company could theoretically hire if they are willing to pay the price. However, this high rate will deter H-1B hiring and price many companies out of hiring H-1B recipients, as the JPMorgan Chase estimate indicates. The visa cap and the visa fee are two sides of the same coin because they are government-imposed barriers to the influx of skilled labor. 

I pointed out as early as 2017 what happens when the H-1B supply is restricted: slower innovation, reduced competitiveness, and more offshoring or automation instead of hiring H-1B workers. An economist from the Peterson Institute for International Economics, Michael Clemens, demonstrates in his September 2025 report how beneficial H-1B visas have been. From 1990 to 2010, H-1B visa holders were responsible for 30 to 50 percent of all productivity growth in the United States (Peri et al., 2015). That includes Vinod Dham, the H-1B visa holder who led the team that launched the first Pentium processor. 

It will be the startups and smaller businesses that get harmed the most by this policy. Only the largest firms will be able to afford the fee. For context, the H-1B visa fee prior to Trump's executive order was $1,500, which represents a hike of over 6,500 percent. Legal sponsorship already costs $10,000. Throwing on an additional $100,000 is not going to make companies want to hire domestic employees. 

The visa fee is similar to minimum wage in some ways, although the minimum wage is a more direct cost than the visa fee. Both act as price floors on labor that reduce demand for the affected labor. In both instances, they are advocated for to protect workers, but the result is the opposite. As the Manhattan Institute points out, the visa fee will push employers to offshore technology and research or to automate. Both outcomes will lower U.S. employment, which is contrary to Trump's intent. This is similar to how the minimum wage incentivizes firms to either cut workers' hours, cut workers' benefits, let workers go, or automate. 

The opposite effect is also observable. According to the Partnership for a New American Economy, each H-1B visa recipient results in 1.8 new jobs. This is because H-1B workers often complement U.S. workers to be more productive in such areas as management, design, marketing, and sales. Creating a shortage, much like Trump is doing, will delay projects and reduce the competitiveness of U.S. companies, which undermines the U.S. economy that Trump thinks he is helping. 

The reality is that the H-1B visa program has vast benefits to the U.S. economy. A dynamic economy helps all workers prosper. It is also why Trump's mass deportation causes such negative economic impacts as lower GDP, employment, and wages. Trump would be more effective if he were to focus on education, apprenticeships, or workforce development. Instead, Trump chose a de facto tax on talent that effectively guts the H-1B program. This means the high-skilled workers will go elsewhere, such as Europe, Canada, or Australia. As a result, Trump is starving the United States of global talent instead of making America great again.

Premium in Name Only: The Pricey Truth Behind “Free” Obamacare Under COVID-Era Subsidies

Instead of passing a budget, the United States Congress allowed the government to shut down on October 1, 2025 and has been shut down since. When government shutdowns take place, the federal government limits services and ceases non-essential operations. This is not the first time such a shutdown has occurred. The longest shutdown took place during Trump's first administration in 2018-19 over funding for expanding barriers on the U.S.-Mexico border. The 1995-1996 shutdown under the Clinton administration was over spending cuts, whereas the 2013 shutdown during the Obama administration was about the implementation of the Affordable Care Act (ACA). While commonly referred to as the ACA, I prefer calling it Obamacare over the ACA because the ACA did nothing to make healthcare more affordable (see here and here), but we can call it ACA for shorthand purposes. 

Interestingly enough, the lack of affordability under ACA brings us to today because the current shutdown is primarily about ACA. During the COVID pandemic, Congress passed the American Rescue Plan, which included a temporary expansion of the ACA's premium tax credits (PTCs) to help soften the blow of the COVID pandemic. These tax credits, which account for 7 percent of the Americans who use the Obamacare-run insurance marketplace, had these tax credits extended under the Inflation Reduction Act in 2022. There is nothing permanent like a temporary government measure, right? Because now, the Democrats want to extend the Biden-era tax credits yet again, even though the COVID pandemic ended a few years ago. Democrat's commitment to extending the Biden-era tax credits was strong enough that they refused to pass a budget without them. Let us get into why this insistence to maintain the PTCs is short-sighted and make matters worse. 

It is a common talking point from proponents to say that the premiums will more than double if the PTCs expire. While technically true, the claim is also misleading. The PTCs act as a demand-side subsidy, which both artificially increase price and quantity consumed. Consumers are paying less for out-of-pocket premiums, but it does not mean the total cost of healthcare has decreased.  The subsidies, in fact, shift the cost from the individual enrollee to the taxpayer, a distinction that often involves the same individuals. People think it is cheaper because someone else is footing the bill. It is not about making healthcare cheaper, but it is a matter of budgetary sleight-of-hand. 

This subsidy is a classic economic distortion that functions similarly to the employment sponsored insurance tax credit. Since the subsidies scale with premiums, enrollees are insulated from rising costs, while taxpayers bear the increased burden indirectly. As a result, it encourages overinsurance, thereby reducing market discipline and increasing overall healthcare costs because insurers have less pressure to compete on price, thereby creating an upward price spiral (e.g., Cannon, 2022; Powell, 2012). 

The PTC subsidy fuels premium growth, which in turn raises subsidy payments further. The ACA did not contain premium costs. If anything, individual premiums increased much faster than medical care or overall prices since the ACA was written back in 2009. Individual premiums increased by 143 percent compared to 52 percent of medical care costs and 49 percent for overall consumer prices. Here is data from the Center for Health and Economy showing how ACA premiums have increased over time. As a result, healthcare costs rose in a similar way that federal subsidies to college tuition have caused tuition costs to skyrocket. Even before the pandemic and this PTC expansion, ACA premiums had already doubled, despite Obama's promises of family savings. 

What the PTC subsidies do to make the matter worse is that it lowers price sensitivity. Consumers have less incentive to shop around or demand lower-cost care, which undermines competition and encourages inefficiency. This distorts consumer choice signals, creates a moral hazard, and makes healthcare inflation all the worse. Much like I asked last May with regards to Medicaid, what good does it do to fund an insolvent and unsustainable program?  

In addition to the economic theory and reality of demand-side tax credit, expanding the tax credits will not fix the system. It will merely hide their failures behind market distortion and more debt. Speaking of debt, the Congressional Budget Office (CBO) estimated last month that extending the PTCs will cost $350 billion over the next decade. Combined with the corresponding interest costs of $60 billion, that brings the total cost to $488 billion over the next decade. This is close to the Paragon Health Institute's estimate of $450 billion. 

To put this into context, the PTCs cover 3.8 million enrollees, which would put the per enrollee cost for the premiums at around $13,000. This is crazy because the average spend for all healthcare per person (not only the premiums) is at around $14,000, according to the Centers for Medicare and Medicaid. If those on Obamacare under the PTCs are spending almost the same amount on premiums alone than the average American spends on overall healthcare, this is hardly an efficient or sustainable use of taxpayer dollars. 

To make matters worse, the legislation for the PTCs removed the 400% of poverty line cap, which means that a large share of subsidy dollars are going to higher-income households. The Cato Institute found that a third of those receiving insurance with these PTCs are above the 400% threshold. Similar to student loan forgiveness, these tax credits go to households that are, on average, better equipped to handle their finances, thereby questioning fairness of the PTCs. If you are arguing now that those at this threshold need subsidies, it is another reason showing us how the ACA has failed at making healthcare more affordable. 

This systemic instability is the sort of phenomenon that makes Obamacare even more unsustainable than it was pre-pandemic. As the Tax Foundation argues, the PTCs are a symptom of showing how federal subsidies and tax preferences in healthcare have increased the cost of healthcare, as well as how the healthcare industry is the most subsidized in the United States. The PTCs are another example of how the top-down model of the ACA has failed the everyday American spectacularly. 

The fight is ultimately not about coverage per se, but how far the government is willing to fund a broken system, a question that could also be asked about Social Security. These COVID-era credits were sold as temporary relief during an emergency. The emergency is long over, but the spending remains. This is hardly a new phenomenon. The Cato Institute calculated that at least $12.5 trillion has been spent on emergency spending since 1991. This also shows why the government needs to stop declaring emergencies to continuously expand government largesse into insolvency. As Milton Friedman once quipped, "nothing is so permanent as a temporary government program," and the PTCs are proving the rule.

The enhanced PTCs do not lower costs, but instead masks the cost increases. Instead of helping the vulnerable, they increasingly benefit higher-income households. Instead of fostering competition, they entrench price-insensitive behavior while rewarding the healthcare insurance industry with corporate welfare. And these premiums come at a cost that exceed the average cost of all healthcare spending. These PTCs are fiscal malpractice disguised as compassion. Do not get me started on how the ACA as a whole increases healthcare costs while receiving less care and fewer options. As I wrote last year, Obamacare has unsurprisingly fulfilled its promises, especially the one about more affordable healthcare. 

In the short run, the PTC expansion under the Inflation Reduction Act should expire because pretending that the PTCs make healthcare more affordable is a dangerous illusion. If we are going to have any serious conversation about how to make the quality of healthcare bette while lowering costs, Congress needs to stop doubling down on the very policies that make the problem of skyrocketing healthcare costs a problem in the first place. I am not going to waste my time to highlight real reform if lawmakers cannot take that first step of recognizing that endlessly expanding subsidies masks the systemic failures that they think they are fixing. First, Congress needs to end the PTC expansion and recognize the role that these subsidies play in artificially increasing healthcare costs. Then we can talk real reform.

Two Years and Home Again: Hostages, Grief, Gratitude, and the Torah’s Timeless Rhythm

October 7, 2023, is a day that will live in infamy in the Jewish world. It was the day that Hamas terrorists came into Israel to kidnap, torture, rape, and murder civilians. Not only were around 1,200 souls taken that day, but over 200 hostages were also kidnapped by Hamas. This was the worst pogrom carried out against the Jewish people since the Holocaust. A few weeks later, the Israeli Defense Forces entered Gaza to fight a war that has been going on for about two years. This past Monday, the remaining hostages captured in 2023 were released. Jews across the world celebrated this day of liberation from captivity. 

What is interesting is that on the Jewish calendar (as opposed to the Gregorian calendar), it was two years between the October 7 attack and the release of the hostages. The pogrom began on the Jewish holiday of Simchat Torah in 2023 and the hostages were sent home shortly before Shemini Artzeret began in 2025, thereby marking the completion of two years. When I went to one of the local Chabad houses in Buenos Aires to celebrate Shemini Artzeret, the Chabad rabbi explained the symbolism of two years in the Torah:

• Two years after the Flood, Noah's grandson, Arpachshad, was born (Genesis 11:10).
• Joseph was thrown into prison and was released two years later (Genesis 41:1).
• When Joseph's brothers were starving because of the famine, it was two years after the famine began that they came to Egypt asking for food (Genesis 45:6).

The Torah understands a rhythm that appears in life all too many times. There is the grief, the waiting, and then the redemption. Paradoxically, these moments of pain are not meant to be mere delays or wallowing in agony. They can become places of spiritual transformation, not by denying the suffering, but deepening our capacity for hope and meaning.

Yes, there is more to celebrate this Simchat Torah than there was last Simchat Torah because the hostages have been released. This is not to say that all is well. Those released from captivity have a long road ahead in terms of healing from the hell that Hamas put them through. There is also the grieving for those who did not survive the ordeal. There are many Jews who did not undergo the hostage situation or fight in the war, but nevertheless feel collective trauma on some level. And that does not even account for the spike in antisemitism worldwide as a result of what has transpired in the Middle East. How can we celebrate when there is still healing that needs to be done and things need to improve? 

We pray for rain on Shemini Artzeret through the Tefilat Geshem (תפלת גשם), but we do not wait for the rain to arrive before celebrating. Renewal begins before things are healed or whole. We move forward and celebrate in spite of the imperfect situation, in no small part because grief and joy are complex, nonlinear processes. This tension between joy and sorry in Jewish tradition is something I explained last year for Passover.

The Jewish wedding is one of the happiest life cycle events. At the same time, we break a glass to commemorate the destruction of the Temple in Jerusalem. Although the kiddush during Passover represents joy, we also remove a few drops of wine to mourn the loss of the Egyptians having to die during the Ten Plagues. We break the matzah at the beginning of the Passover seder to represent poverty and scarcity. At the end, we find the hidden piece of matzah, the afikomen, that represents redemption. Simchat Torah follows a similar dynamic. It symbolizes renewal because it marks both an end and a beginning. We finish the Torah cycle by reading about Moses' death and we start again by reading about the creation of the universe. We do not wait for everything to be perfect. 

I think an answer is a matter of a paradigm shift, particularly through gratitude. The phrase in Hebrew for gratitude is Hakarat HaTov (הכרת הטוב), which means to recognize the good. We are not meant to ignore the calamity that has befallen the Jewish people as a result of the October 7 attacks. This is about how to focus on appreciation for what we do have and the good that exists in spite of the pain, suffering, injustice, and unfairness that is part of this world. We do not erase the grief, but neither do we allow sorrow to have the final say. 

While changing perspective is important, it is not the final step. In the Passover seder, Jews are to taste bitters herbs not only to experience what the Israelites felt during the Exodus, but also to remind us that bitterness is inevitable in life. Conversely, the sweet mix known as charoset is optional. This teaches us that while bitterness is unavoidable, whether we add sweetness by translating mindset into action is up to us. That is where dancing on Simchat Torah comes into play because it is metaphor for turning a positive attitude into positive action, much like I explained with dipping apples into honey on Rosh Hashanah. 

Dancing on Simchat Torah is not a betrayal of the mourning process, but an act of resilience so quintessentially Jewish to remind us that we do so while carrying joy and grief together. It is an act to make life sweeter. We are meant to be greater than the sum of our pain, hurt, trauma, setbacks, and grief. This dancing reminds us that holiness exists in brokenness and that we are not meant to despair. We do not dance because everything is perfect or resolved. This Simchat Torah, we dance because something has shifted. We have seen a sliver of redemption, something that symbolizes a shift. We dance to honor the memory of those lost. We dance to express gratitude. We celebrate by dancing because what Jews do in the face of adversity is turn mourning into movement, pain into purpose, and suffering into song. In that celebration, we develop a mature sense of joy that reflects the multifaceted nature of life. 

The Veiled Threat: Italy’s Proposed Burqa Ban Won’t Fix Cultural Integration, But It Will Erode Liberty

In times of social tension, politicians often claim they are finding solutions in the name of safety, values, or protecting culture. It is amazing how liberty finds itself on the chopping block when the government pursues such goals. That dynamics is now playing out in Italy. Last week, the Fratelli d'Italia, which is the ruling party in Italy under Prime Minister Giorgia Meloni, proposed a "cultural separatist" bill in response to growing concerns over Muslim immigrants. Part of this bill includes a public ban on the burqa and niqab. Anyone caught wearing these garments would be fined anywhere from €300-€1,300. 

While there are various local jurisdictions throughout Europe with such bans, Italy would become the ninth country in Europe with a nationwide burqa ban. Proponents of these bans claim that they promote safety, liberate women from a form of religious oppression, and encourage integration. To be clear, I think Europe generally has had a major issue when it comes to integrating its Muslim immigrants. 

I first expressed my concerns in 2015. A lack of integration of Muslim immigrants was also a takeaway from my 2023 trip to Sweden. As I brought up earlier this year while criticizing the "it is Islamophobic to criticize Islam" argument, the influx of Muslim immigrants in Europe is importing oppressive and authoritarian practices and tendencies to the Western world. It is notable enough that I even question some of my views on immigration, at least contextually as they pertain to what is going on in Europe. That topic deserves its own discussion because I would need to think of how immigration in the U.S. is different from Europe. What I will say is that in spite of my considerable worries about Muslim immigrants not integrating into mainstream European society, a burqa ban is not the solution.  

I already have objections based on how this ban erodes freedom. A TikTok ban in the U.S. was based on "protecting values" or "security." A burqa ban uses similar justifications while giving the state a deeply concerning power over one's body and what one can wear. Unless you can prove a direct harm from a fashion choice, a burqa ban is a considerable violation of bodily autonomy. If a government can tell people what they can wear in the name of security or cultural cohesion, what else can the government dictate? 

At the heart of a liberal and free society is the principle that individuals have the right to live in accordance with their sincerely held religious beliefs, even if those beliefs are not shared by the majority or are uncomfortable. Without that freedom, I would not be able to freely practice Judaism. Article 9 of European Convention on Human Rights is supposed to protect this right, even in spite of the European Court of Human Rights upholding such bans. 

Like lockdowns, burqa bans show how governments respond to fear by restricting freedom rather than trusting individuals. All a burqa ban does is set the precedent that individual expression and religious identity can be quashed by majoritarian discomfort. By viewing clothing as a threat, Italy risks the problem of eroding the democratic pluralism it claims to defend. 

I find such a ban to be problematic more than on terms of freedom of expression, bodily autonomy, or freedom of religion. I have criticized bans over the years, showing that government uses bans as a blunt instrument that are prone to backfiring. This was the case with the gas stove ban when it restricted choice while not solving anything of substance. Burqa bans also do not solve anything of substance, particularly when it comes to whether they increase integration. 

One study from Cambridge University (Paul, 2024) covering French and Belgian bans indicates that "A law or regulation that prohibits or governs the wearing of Islamic veils in the public sphere, pressures pious Muslim women (that is, those who habitually wear veils in public) to stay home and to avoid public places." This study also found that a majority of women interviewed reduced their outdoor activities and made them feel like they were living in a jail. Even if some women are pressured into veiling, the solution is not to punish them by further isolating them from public life with a burqa ban. That doubles down on their marginalization.

Another study from Stanford University (Fouka and Abdelgadir, 2020) covered the 2004 France headscarf ban in public schools. The ban does only cover schools, but it does show the backfiring effect, which resulted in discrimination both from non-Muslim peers and Muslim community members who thought the girls were selling out. Muslim girls were shown to have lower rates of completing secondary education and were more likely to repeat courses. 

Then there is a study from the Open Society Foundations interviewing 35 Muslim women showing that a full veil ban resulted in increased mental health issues, isolation, disruption in family life, and avoidance of health services. While much of the evidence of these bans are qualitative in nature and limited in sample size, we are still able to get valuable insight into how these bans directly and negatively affect those most impacted by these bans. The problem with burqa bans is that they result in more alienation than they do assimilation. 

A burqa could represent illiberalism because it sends the message that women should not be seen or that it is a form of systemic subjugation. However, a ban is also an illiberal policy. You cannot fix coercion with another act of coercion. Bans are a broad, coercive, and typically counterproductive policy that disrespects the liberty of individuals to live their own lives. There is no strong evidence that a burqa ban would improve the integration of Muslim immigrants. 

Much like Trump making English an official language, age verification laws, or banning flag burning, a burqa ban is another form of right-wing virtue signaling. It is a costume change masquerading as a cultural fix because it is more concerned with optics than actual outcomes. The main question here is how do we maintain an open, liberal society that welcomes immigrants without becoming illiberal ourselves? 

A few suggestions come to mind. Provide women confidential support services for those who are in religious or cultural pressure situations. Increase legal and police protection for Muslim women who want to integrate and would otherwise face abuse or intimidation. Improve access to education and employment choice, both of which are shown to improve autonomous choice and independence of women. Prosecute the explicitly coercive acts, such as forced marriage and honor violence. Support community outreach and mentorship to break the segregation without banning cultural expression, much like the Migrant Women Mentoring Programme focuses on doing. Provide better training for instructors so they can help migrants learn basic civic, cultural and language skills. 

If your argument is that women are being coerced into wearing the burqa, empowering women with the skills to make their own choices is far more effective than banning clothing. Cultural integration needs to come from a place of education, dialogue, and leadership. Part of that includes criticizing Islamist ideology and influences, as well as rejecting Sharia-based legal frameworks to influence secular law. If attempting cultural integration comes from force, like we have seen in France, all it is going to do is isolate Muslims and increase resentment from Muslims about mainstream society. Criminalizing someone's fashion choices is not going to fix these multifaceted cultural issues, but they will erode freedom in an illiberal fashion in the meantime.