Mamdani's "Free" Universal Childcare and What Happens Socialism Meets Economic Reality

Socialists have a peculiar relationship with mathematics. Much like protectionists think that arithmetic is for globalists, socialists think that adding up the costs of a program is a form of capitalistic oppression. Costs are somehow lower than expected, savings are larger than advertised, and somehow someone is expected to pick up the tab. 

And this is where New York City Mayor Zohran Mamdani comes into play. On his campaign trail, he made a campaign promise for universal childcare at a price tag of $6 billion per annum. It turns out that his math was off and that it will cost about 50 percent more. According to a recent study from The New School's Center for New York City Affairs, it will cost anywhere from $8.7 billion to $9.3 billion. This is not about a single headline. It is the idea that making things "free" comes at a high price tag. 

Calling something "free" is one of the oldest tricks in politics. The word focuses attention on the person receiving the benefit while hiding the costs somewhere else. Universal childcare requires caregivers, facilities, equipment, and administration. Guess what? All of that costs money. 

Plus, when government sets the price of the service at zero, demand rises because consumers no longer face the normal costs of their choices. That means the government must fund a larger system than anticipated. Economics has a habit of ruining politically attractive slogans by introducing something called arithmetic. 

If this were just about a single overly optimistic estimate, that would be one thing. But Mamdani's childcare proposal fits the broader pattern of government programs that sound affordable until someone has to calculate the costs and pay the bills. 

Consider his other proposals. His rent freeze assumes that the government can make housing more affordable by restricting prices, while ignoring the incentives those prices create for landlords, maintenance, and future housing supply. His government grocery store proposal assumes that City Hall can enter a competitive market and somehow deliver better outcomes at a 30 percent discount. His free bus proposal fell through because he forgot that buses still require drivers, maintenance, and fuel, all of which cost money. 

Each proposal involves a different policy mechanism, but none of it can avoid the reality that resources are limited. Building still need maintenance, workers still need wages, and services still require resources. Costs do not vanish simply because a politician invokes the word "free."

The appeal of socialism has been its promise to remove difficult choices. If only government were ambitious enough, everyone could have what they want while nobody would have to sacrifice. Unfortunately, the world doesn't work that way. Every society faces tradeoffs. Pretending otherwise only ensures that those tradeoffs appear later and do so in much more painful forms. 

The best ideas survive scrutiny because they account for costs and benefits, not because they assume those pesky costs disappear. Campaign promises don't need to balance the books, but someone eventually has to pay a price for those who decide to implement them.

August 13, 2026 Addendum: Speaking of high price tags, the Cato Institute published a solid analysis of what it would cost if the Democratic Socialists of America got everything on their wish list, which includes universal health care, reparations, a federal jobs guarantee, housing for all, paid family leave, and free college. On the high end, it would cost $211.6 trillion over the next decade. Even in the low-bound estimate (which given what I previously wrote, is most likely a woeful understatement), it is still $71.2 trillion. 

The Sanctioning Russia Act Won't Stop Putin, But the Tariffs Will Expand Presidential Power

When Russia invaded Ukraine in 2022, Western governments responded with one of the most sweeping sanctions regimes in modern history. At the time, I questioned whether economic sanctions would compel Vladimir Putin to change course, noting that they often impose heavy economic costs while producing mixed political results. 

Four years later, Russia remains at war, and Congress is now debating legislation that would expand presidential tariff authority in an effort to increase pressure on Moscow. Instead of rushing forward, lawmakers should consider what the past four years have actually taught us about sanctions, tariffs, and constitutional government.

Ryan Young, a senior economist at the Competitive Enterprise Institute, scrutinizes the argument that the Sanctioning Russia Act would have any meaningful impact on the war in Ukraine. Since direct trade between the United States and Russia is already minimal, new tariffs would do little to reduce Russian export revenue. The bill's broader use of secondary tariffs against countries buying Russian energy also raises concerns. Young argues that these tariffs are unlikely to change the policies of major trading partners while potentially creating diplomatic conflicts and disrupting broader U.S. trade relationships.

The National Taxpayers Union's chief concern is not simply the size of the proposed tariffs, but the uncertainty surrounding them. The legislation gives the president broad discretion to determine which countries are targeted and what tariff rates they receive, while requiring the list of affected countries to be recalculated every 180 days. 

As global energy markets change, countries could move on or off the list with little warning. Businesses can adapt to almost any rule, but they struggle when the rules themselves are constantly changing. This is why Congress should write clear, predictable laws rather than leave fundamental trade decisions to executive discretion.

If that were not enough, there are issues with constitutional governance. Rather than asking whether additional sanctions on Russia are warranted, the Cato Institute asks whether Congress should grant the president another broad source of unilateral tariff authority. 

The bill allows the executive branch to determine which countries are targeted, what data are used to identify them, what tariff rates apply, and which nations qualify for exemptions. Such discretion extends far beyond Russia policy and could easily be used as leverage in unrelated trade negotiations. Congress should be reclaiming its constitutional authority over tariffs, not delegating even more of it to the executive branch.

Russia's aggression deserves a firm response, but good intentions are no substitute for sound public policy. If additional tariffs are create uncertainty for businesses, further erode Congress's constitutional authority, and are unlikely to change Putin's behavior, lawmakers should think twice before rushing this bill into law. 

Effective foreign policy requires realism, constitutional restraint, and a willingness to question politically popular ideas. Otherwise, Washington risks punishing everyone except the people it intends to punish. Hope is not a strategy, and tariffs are not a substitute for one.

Elon Musk, the First Trillionaire: A Capitalist Success Story with Some Caveats

Just when you thought Elon Musk could not have gotten any richer, he announced the initial public offering (IPO) of SpaceX, an aerospace manufacturing company. The SpaceX shares combined with Tesla made Musk the world's first trillionaire. 

There were those, particularly on the Left, flipping out. The Institute for Policy Studies called it a dark day for democracy. Senator Elizabeth Warren decried it while making a call for a wealth tax, which is a bad idea. Senator Bernie Sanders thought it was absurd and pitched the idea of removing the cap on taxable income for Social Security. It is certainly a reminder that the income inequality debate is not dead, and neither is envy for success or rich people. 

Forget what I think about his missed opportunity to reduce government largesse with DOGE, the man's accomplishments are remarkable. He helped the foundations for PayPal, built Tesla into a transformative company, and founded SpaceX. If he is successful in making routine space travel possible, it would rank among one of the biggest entrepreneurial achievements in human history. 

More importantly, Musk is creating value. And that brings us to a point often lost in this discussion. Elon Musk is not sitting on a trillion dollars in cash. A net worth is not a bank account. It is largely an estimate of the value of investments, businesses, and other assets. 

Nor is he hoarding wealth. The economy is not a fixed pie in which one person's gain necessarily comes at another person's expense. Wealth is created through innovation, investment, and productivity. Musk's fortune reflects the belief of millions of investors that the companies he built have generated enormous value and may generate even more in the future. 

His rise to trillionaire status is a reminder of what can be accomplished through ideas, perseverance, risk-taking, and a market economy that allows individuals to create wealth on a massive scale. That being said, I would say that there are two important caveats. 

The first has to do with monetary policy. The Federal Reserve spend decades expanding the money supply and eroding the purchasing power of the dollar. One consequences has been rising asset prices, which in turn have produced ever-larger fortunes on paper. Musk unquestionably created wealth, but the emergence of the world's first trillionaire is less shocking given how much the dollar has devalued. 

The second has to do with the government subsidies, contracts, or regulatory breaks received by Musk's companies as evidence of unfair advantage. This argument often misses the broader institutional point. When the government has the authority to subsidize industries, grant tax advantages, and regulate entry into markets, it inevitably creates incentives for rent-seeking.

Musk's success is best understood not as the product of government intervention, but it cannot be understood as something that happened in a purely free market either. His success and value creation took place in a system in which markets remain the dominant engine of value creation, but also where political discretion occasionally distorted outcomes at the margins. 

Musk's story is one that took place in an economy with considerable rent-seeking and monetary expansion.  The story is less about whether anyone should be a trillionaire and more about the fact that propserity depends on sound money, competitive markets, and limits on political favoritism. 

Shock and Oil: The Hidden Economics of War with Iran

About a month ago on February 28, the United States and Israel launched surprise attacks on Iran that killed Iranian Supreme Leader Ali Khamenei and other military bigwigs. Since then, there have been military strikes from both sides. The fallout from this war and how it will end remains to be seen. We have already seen one of the predictable outcomes come to fruition. 

There is about 20 percent of the world's petroleum and liquified natural gas that passes through the Strait of Hormuz. Because of the Strait being all but closed, oil barrels have already increased from $73 a barrel at the eve of the war to around $113 a barrel. What is interesting here is not merely the magnitude of the spike, but its timing. The market did not wait for a sustained disruption in supply. They moved almost immediately after the war started. 

And because energy is a universal input into the economy, the price movement does not stay confined to the oil market. It feeds directly into transportation costs, manufacturing inputs, agricultural production, and electricity-intensive sectors like artificial intelligence and data infrastructure.

But this is more than the immediate shock of the military escalation. It is uncertainty about the future. A study from the Federal Reserve Bank of Dallas finds that even when the increase in the probability of a worst-case scenario rises, the prices start to rise and the output starts to drop. As the conflict progresses, the probability does not disappear; it intensifies. 

The risk becomes more realized with higher insurance costs, higher shipping costs, and increased precautionary behavior. The risk premium driven by expectations blends into a price increase driven by reality. As this other study from the Federal Reserve Bank of Dallas calculates, the longer the conflict persists, the more permanent those price hikes remain and the bigger the impact on the GDP (see below).

The costs go beyond the energy market. As of March 23, there has been nearly $29 billion spent on this war. The Cato Institute points out that this undefined war has no clear exit strategy, which makes it more like the war in Afghanistan. Then there's the fact that when geopolitical risk rises, companies do not invest; they wait. Research from the Federal Reserve shows that heightened uncertainty about wars and conflicts causes business to delay capital spending and hiring, which leads to a sizable drop in investment.  

Taken together, the economic consequences of war extend beyond headline figures. Higher gasoline prices are the most visible cost, but it one of many costs in a long chain of government expenditures, business decisions, and long-term economic growth. As uncertainty rises, investment falls along with economic growth. 

In that sense, war operates like a hidden tax that shows up in the form of higher prices, larger deficits, and a slower-growing economy. It's amazing because it's a tax that no one in the U.S. voted for, that no one in the U.S. can escape, and will get explained away afterwards as if nothing happened. 

Trump’s $625 Million Coal Cronyism: Fueling Failure of the Dying Coal Industry

Residential electricity prices have been surging in the United States. Since the COVID-19 pandemic in 2020, U.S. citizens have dealt with around a 30 percent increase in electricity prices, according to Energy Information Administration (EIA) data. Such a rise makes it more difficult for the everyday American to afford basic necessities. In line with his presidential campaign promise to lower electricity costs, President Trump has come up with a solution: taxpayer subsidies for coal plants. 

Last week, Trump's Department of Energy announced that it was going to commit $625 million to revitalizing the coal industry, whether it is for recommissioning coal plants, retrofitting coal operations, or for coal power projects aimed at making energy more affordable. For the DOE, this $625 million will help keep "electricity prices low and the lights on without interruption." The press release then said "Coal built the greatest industrial engine the world has ever known, and with President Trump's leadership, it will help do so again." Much like with manufacturing, Trump is clinging to a past that cannot repeat itself in the present moment. 

I understand that $625 million in a $6.8 trillion budget might seem like a small amount to quibble over in the grand scheme of things. If Trump ramping up tariffs or immigration policies shows anything, it is that his subsidies could plausibly go beyond the initial $625 million. However, it is a matter both of principle and the fact that this amount will still cause economic harm to the everyday American. Let us set aside for the moment that this $625 million will be paid by taxpayers to benefit utilities and coal companies. The bigger question is whether it is worth spending money on salvaging the coal industry. 

As I pointed out in 2017, the U.S. coal industry is on the decline. EIA data show that this trend has continued since my 2017 piece. Why is that the case? On some level, environmental regulations have gotten in the way of the coal industry market expansion. However, the main factors behind coal's decline are market-based, as this report from the Cato Institute illustrates. Demand for coal has declined in no small part due to natural gas and renewable energy becoming less costly to produce, not to mention the development of such storage solutions as lithium-ion battery storage and iron-air batteries. As the demand for clean energy continues to increase, coal demand will continue to decline. 

While the subsidy targets supply by bolstering coal infrastructure, its effects could ripple into the demand side if utilities are nudged to favor coal through capacity contracts or guaranteed purchases. In theory, it could arguably decrease price while increasing supply. However, that will probably not happen. 

Coal plants are uneconomical relative to natural gas and renewable energy, especially given that about a quarter of coal plants are expected to retire within the next four years. According to financial services firm Lazar in its 2025 report on energy costs, coal costs $69-168/MWh, which is more than natural gas ($48-$107 MWh), solar ($38-78/MWh) and wind ($37-86/MWh). 

This subsidy would most likely create a crowding out effect that makes it harder to develop alternative energy sources. This has happened before with fossil fuel subsidies crowding out renewable energy (Monasterolo and Raberto, 2019). This takes place because energy subsidies "adversely affect price signals and lead to misallocation of resources" (Hartono et al., 2020). Even the Right-leaning Heritage Foundation, which is generally pro-coal, recognizes that coal subsidies calcify the industry and stymie technological progress for coal. 

We should not be allocating taxpayer dollars to a dying industry. Biden threw billions at green and renewable energy, which I also criticized. Trump is now doing the same with coal. Regardless of political affiliation, the government has no business in subsidizing energy, especially if the goal is to keep energy prices low. We can delve into regulations in the coal industry and what their effects are on energy prices, pollution, etc. Odds are that if I scrutinized each regulation individually (see 2017 example here), I would most probably conclude that the government should regulate less than more, although you never know. Even so, if the idea is to let market forces determine which energy source is best, that also means that the government should not be using subsidies or any price supports instead of picking favorites. If nostalgia powered the electric grid, coal would be king. That is not how economic reality works. Propping up coal would only burn through taxpayer money while doing nothing to lower prices.  

Morocco's Jobless Trap: When High Taxes, Labor Laws, and Corruption Stifle Economic Opportunity

Morocco is a country with such vibrant cities as Fez and Tangier, a diverse geography, a rich culture, a wealth of historic sites, and has been featured in such films as Casablanca and Game of Thrones. Guess what else Morocco has? High unemployment. According to the Moroccan government's Haut Commissariat du Plan, Moroccan unemployment is at 13.3 percent, which is slightly below the 30-year high (see below).

Youth unemployment is even worse, reaching a 25-year high (see below). Sadly, the problem is nothing new. NPR complained about high Moroccan youth unemployment in 2012. So what is causing this increase in unemployment? Sure, there was the COVID pandemic, but unemployment in Morocco is higher now than it was during the pandemic. 

As the International Monetary Fund (IMF) illustrates in its Article IV Consultation report, Morocco has withstood five droughts in six years that have led to production shortfalls of 40 percent. This seems like it explains the problem: lower agricultural output. However, Morocco's agriculture sector contributes about 15 percent to Morocco's GDP. That is a higher percentage, especially considering that high-income countries only have 2 percent of their GDP in agriculture. 

I bring this up because as economies develop and mature, they become less dependent on their agricultural sector. Similar to this recent article from the Institute for Research in Economic and Fiscal Issues (IREF), I argue that Morocco's dependency on agriculture is a larger symptom of government largesse getting in the way of true economic development. 

Taxation. Morocco's corporate tax can reach as high as 35 percent. You can read my analyses on corporate tax here, here, and here as to why that rate is too high. The standard value-added tax (VAT) in Morocco is 20 percent, which is higher than the global VAT average of 15 percent. A high VAT is significant because it reduces disposable income and discourages spending. On top of that, the Moroccan tax system has a narrow tax base and is riddled with tax exemptions that make evasion and avoidance common (Moutii, 2025). 

Government Spending. The good news is that Morocco is working on fiscal consolidation (IMF, p. 10). The bad news is that Morocco's debt-to-GDP ratio is 70.9 percent, which is about 30 percentage points higher than the recommended limit that should not be exceeded on the long-term for developing countries. Whether the Moroccan government can maintain fiscal discipline will determine how much this becomes a factor and avoids heading towards a fiscal cliff similar to that of the United States.

Labor Law Rigidity. The Legatum Institute details in its case study on Morocco that the Moroccan labor market is characterized by a lack of inclusion of women and youth, slow job growth, and low quality of jobs (also read this 2025 World Bank report on boosting the business environment in Morocco). This lack of labor market flexibility is brought on by a quickly growing minimum wage and high overtime costs, regulations that cause redundancies in businesses, rigidity on temporary contracts, and stringent barriers on terminating the employment of workers, all of which contribute to the high cost of labor. Additionally, a skills mismatch and lack of workforce development exacerbate the labor law rigidity (ibid., p. 50).

Corruption. According to Transparency International (TI), Morocco's corruption is worse than the global average. Even worse, its TI Corruption Perceptions Index score has declined since 2018. As I pointed out last year, corruption erodes economic growth. This is due to the fact that corruption impacts business confidence and hinders investment, as is illustrated by over 16,000 enterprises collapsing in Morocco last year. 

Postscript. It is true that there were global challenges such as pandemic and drought. It is also true that Morocco's high unemployment rate is more structural in nature. Punitive corporate taxes, a high VAT rate, and rigid labor laws make it difficult to modernize and diversify the economy. A richness in culture, geography, or global visibility is not going to save Morocco. It is a policy paralysis that will keep employment rates stubbornly high until the Moroccan government removes the barriers to economic prosperity.

City Hall Shouldn't Bag Your Groceries: A Case Against Government-Run Grocery Stores

Last week, New York State Representative Zohran Mamdani won the Democratic primary for the New York City mayoral election. In addition to being a Democrat, Mamdani is part of the Democratic Socialists of America (DSA), which is the U.S.' largest socialist organization and represents the Far Left in the U.S. Forget Mamdani's anti-Semitism for a moment. If you read his platform, he is a major proponent of the idea that the government should give the people things for free or should heavily subsidize them. He has advocated for many ill-conceived policies that I have previously criticized, whether it is rent control, fare-free buses, or raising the minimum wage to $30. Today, I would like to criticize another one of his ridiculous ideas: city-owned grocery stores. 

Mamdani sees food prices as being out of control due to profit. He would like to "create a network of city-owned groceries focused on keeping prices low, not making profit." He believes that he can create savings by having the government pay for capital costs while waiving property taxes for these grocery stores. In a TikTok campaign video, Mamdani said that grocery stores should not operate on profit motive, but their mission would be "lower prices, not price gouging." 

Other proponents have argued that government-run grocery stores could increase access to healthy food, especially in areas with food deserts. Their idea is to provide grocery stores to neighborhoods that seem "economically unfeasible." This is where wishful thinking collides into reality in a rather unpleasant way. Similar to when I critiqued Kamala Harris' price controls on groceries last year, Mamdani has a profound misunderstanding of how markets work generally and specifically how the grocery store market works.

How big of a problem are food costs? Yes, food prices have increased. We have pandemic-era expansionary monetary policy and fiscal policy to thank for that price increase. More to the point, as U.S. Department of Agriculture (USDA) data shows, food at home as a percent of disposable income decreased from 12 percent in 1964 to 5 percent in 2024. In the 1940s, it was a quarter of disposable income. If food prices are not a primary strain on people's finances, this makes government-run grocery stores a less urgent policy issue. 

The nature of the grocery market. The grocery store market is a highly fragmented market. Not only that, but Mamdani's premise about grocers' motives is wrong. If grocery stores were looking to gouge customers, they would make a lot more money. In spite of most people believing the contrary, the reality is that grocery stores operate with razor-thin profit margins, ranging from 1 to 3 percent.

The joy of profit motive. Private firms have something that a public-sector one lacks: profit motive. Maximizing profit means maximizing the difference between revenue and expenses. As this article from the Foundation for Economic Education (FEE) reminds us, profit motive incentivizes lowering the cost of inputs (e.g., shopping carts, cash registers), innovation, scaling supply chains, and effectively meeting customer demands. This more often than not leads to lower prices and higher quality. 

Perverse incentives. In contrast to profit motive, city-operated grocery stores create perverse political incentives, including price manipulation, product selection, staffing decisions, and remuneration for political gain. The risk for cronyism minimizes any likelihood that Mamdani's dream would come true. 

Lack of business viability. Private grocery stores have enough trouble with profit margins. Again, city-run grocery stores do not have profit motive to optimize efficiency. They would struggle without relying on subsidies or government funding. That is not mere economic theory. The "best" success story I could find is one small government-owned store in the rural area of Erie, Kansas. This store has created a modest profit of 1.1 percent, required volunteers, and relied on donations. The supposed success story of Erie operated more like a co-op than it did an actual grocery store. However, on the whole, government-run grocery stores have not been viable, as has been the case in Baldwin, Florida and Little River, Kansas. 

That does not even count the catastrophic government ownership of food with Venezuela, the former Soviet Union, or Maoist China and the Great Leap Forward, the latter of which caused the deaths of upwards of 55 million people. I understand that the United States is not the same as communist China, government-run grocery stores come with the same centralized control and bureaucracy, price fixing, and lack of profit motive that the aforementioned Communist countries faced. All the same, it should make us pause and question how much we want the government in charge of food distribution and sales.

Case studies in proxy markets. As we question whether or not New York City (or any municipality) should operate grocery stores, it would be helpful to look at proxy markets. Some in favor of Mamdani's proposal, such as the opinion editor at Washington Post, point to liquor control states where government handles the distribution and sale of all alcohol. That is a bad argument because government ownership of liquor sales resulted in higher prices (Siegel et al., 2014), which undermines Mamdani's fantasy that he can lower grocery prices. In addition, take a look at the New York City's very own Housing Authority, which is straddled with $78 billion with unmet capital needs. I feel like I am beating a dead horse, but a lack of profit motive results in wasteful spending from the government. 

Postscript. It is amazing how socialism's loudest proponents are well-off, educated theorists who understand nothing of how the real world works. Government-run grocery stores face challenges stemming from a lack of profit motive, including inefficiencies and political manipulation. The private-sector grocery market is highly competitive with tiny profit margins. Because of those slim profit margins, government-run grocery stores would have to rely on considerable government funding, which would further drain taxpayers. Private businesses are better equipped to meet customer demands, lower prices, and innovate. Private firms have the advantage of "massive economies of scale, decades of market experience, and complex supply chains." What government-run grocery stores will do is increase prices and lower quality for the citizens that Mamdani is purporting to help. 

Providing tax incentives to grocers and removing zoning laws are two policy alternatives I can come up with off the top of my head. Or in the case of New York City specifically, you can lower the high sales tax and minimum wage, both of which are costs passed on to the everyday grocery shopper. We can sit around and spitball ideas to make groceries more affordable, but I will conclude by unequivocally stating that the government has no business selling groceries.

Is the Reign of the U.S. Dollar Coming to an End?: Assessing the Future of Global Reserves

Tariffs notwithstanding, the United States has fiscally been in such a tumult in recent years. Last month, the credit rating agency Moody's downgraded the United States from Aaa to Aa1. This downgrading is significant for two reasons. One is that the United States is the largest economy in the world. The second reason is that Moody's is the final major credit rating agency to downgrade the United States below its top credit rating. Much like with Fitch's downgrade in 2023, Moody's cited long-term debt issues fueled by the mandatory spending. Moody's anticipates that the United States' fiscal performance is to deteriorate at a faster rate relative to other highly-rated sovereigns. 

This got me thinking about a major topic related to all this mess. The United States dollar (USD) is the most held currency in global reserves. However, that clout has been declining over the years (see above). International Monetary Fund (IMF) data show that at the end of 2024, 58 percent of foreign exchange reserves are USD. Contrast that with the dollar being 65 percent a decade earlier. How legitimate is the concern that the percent of dollars in foreign reserves will continue to decline over time?  We should first ask what could replace the dollar as the primary global reserve. 

• Chinese yuan (人民币). China has the second largest economy and is continuing to grow, hence why it is a main contender. However, as long the Chinese central bank (中国人民银行) has exchange rate regime (currency manipulation), capital controls, and institutional weakness, the Chinese yuan will not be a global currency reserve. 
• The euro. The European Union rivals that of the United States and has political stability. However, it has internal economic issues that I have critiqued since 2010 and have done so since then (see here, here, and here). It is not only the lack of a common treasury or a unified European bond market, not to mention that its capital markets are inadequately integrated to muster the assets necessary to become a global leader. As a research paper from the European Commission points out, the euro zone crisis last decade resulted in the downgrade the credit rating of various European countries, thereby strengthening the dollar (Arroyo, 2022). 
• Other currencies. The Japanese yen, Korean won, Australian dollar, Canadian dollar, and British pound lack the scale and liquidity to pull it off. The BRICS countries cannot cobble together a currency basket to rival the U.S. economy because of the structural challenges that do not make their countries' central banks robust. 
• Digital and blockchain alternatives. This option could have potential in the future. However, given current regulatory hurdles and the fact that these alternatives are still relatively nascent, they are not viable options, certainly in the short-term.

There is still no viable contender to step in and replace the U.S. dollar in the short-term. The United States remains a large, powerful economy that accounts for 26 percent of the world's GDP with rule of law and investor confidence. Because it takes a lot of time, money, effort, and political willpower to change currencies, there is inertia vis-à-vis the network effects that are in the U.S.' favor. The U.S.' market for Treasury securities remains large and liquid. The dollar is still the dominant currency choice for international trade transactions because the dollar is so entrenched in global trade and finance. That being said, it is clear from the Moody's downgrading that the U.S.' fiscal situation is untenable and it is looking like there is a lack of political will to change things. 

In July 2024, the CFA Institute surveyed nearly 4,000 global financial professionals. Not only did 77 percent of respondents find that the U.S.' finances are unsustainable, but nearly two thirds had the professional opinion that the U.S. will lose its global reserve status (52 percent in a marginal way and 11 percent in a material way). It was also interesting to see the reasons that respondents thought this would happen. Debt was number one, followed by a downright default (see below).

What does this mean for the global reserves system? Going back to the CFA Institute survey, what the respondents believed to be the most likely systems to replace the dollar would be a multipolar currency system, a digital currency, and hard currency (e.g., gold). If I were to speculate, I would say the system is becoming more multipolar and there will be an emergence of digital currency in global reserves. I believe that the dollar's prominence will remain in the short term but also decline gradually, much like it has in the past couple of decades. The fiscal cliff is not imminent, but it is the direction in which the United States is heading.

What came as a result of the COVID pandemic and the lockdowns has taught me to be more humble with my educated guesses, especially when prognosticating beyond a year or so. What I can say with certainty is that that more the United States government avoids meaningful fiscal reform and adds on deficit spending, the more that dollar will lose its dominance. The question simply will be a matter of how much dominance is lost, what will take its place, and how ugly of a process it will be.

Moody's Downgrades U.S. Credit Rating, But Congress Still Chooses Insolvency Over Fiscal Discipline

As Congress debated Trump's tax cuts with the "Big Beautiful Bill," the credit rating agency Moody's delivered another coup to the U.S. government. Last Friday, Moody's decided to downgrade the U.S. government's credit rating from Aaa to Aa1. This is significant not simply because of the U.S.' economic clout or that Aaa is Moody's highest credit rating. All three major credit rating agencies (the other two being Fitch and Standard & Poor's) have downgraded the United States below their top credit rating.

Why did Moody's decide to make this call? It is due to "the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns." It is not only what has led the United States to this precipice, but also what is to come. To quote Moody's once more: 

We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration. Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat. In turn, persistent, large fiscal deficits will drive the government's debt and interest burden higher. The U.S.' fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns. 

Pro-Trump economist Stephen Moore questioned the timing of the downgrading. Trump thought it was a political hit job, even though he conveniently neglected to mention that Fitch Ratings downgraded the U.S. government's credit rating during the Biden administration. And while the Biden administration made some fiscally poor decisions (e.g., Inflation Reduction Act, American Rescue Plan Act), this is not the world trying to stick it to Trump, no matter how much Trump would like to think otherwise. 

For those who have been paying attention the United States' fiscal outlook, this downgrade does not come as a shock. This downgrade is quite frankly overdue given how the U.S. government has spent money as if it grew on trees. I have covered this topic about long-term government debt since 2013 and have covered it since (see here, here, here, and here). When a government consistently spends more money than it has and spikes its debt-to-GDP ratio in such a fashion, this is an example of "you reap what you sow." And as Moody's was correct to illustrate, Trump's income tax reduction extension from the Tax Cuts and Jobs Act (TCJA) is only going to exacerbate that ratio. If you need more information on how rising debt will have negative impacts on economic growth, jobs, investment, and income, you can read this report from the Peter G. Peterson Foundation that was released last week. 

The significance of Moody's downgrading is not simply about the exorbitant spending. As I brought up during the COVID pandemic when I wrote about how we should still be concerned about growing federal debt, there is a certain debt-to-GDP ratio that focuses more government expenditures on interest payments and less on other programming. Moody's is correct to point out that the United States has reached that level. As the Peter G. Peterson Foundation pointed out last January, interest payments have gotten to the point of surpassing what the United States pays in defense spending. This likely means that the days of the United States borrowing tons of money without dealing with inflation or higher interest rates is over, which will have ripple effects not only in the U.S. economy, but also the global economy. In the meantime, lagging economic growth and a debt spiral will ensue if Congress does not act.

What Moody's has to say should not be taken lightly. All major credit rating agencies are sounding the same alarm. The U.S. fiscal situation is unsustainable and what Congress is looking to do is only going to make matters worse. The American Action Forum accurately identifies Social Security, Medicare, and Medicaid as the major culprits since those programs account for the majority of non-interest federal spending. Not addressing that entitlement spending is also why DOGE's attempts to deal with government has been paltry thus far. There is not even an independent fiscal committee to deal with the matter. Whether the political will exists remains to be seen (I doubt it does), it is clear that not even Moody's is hopeful in the short-term. I will say that if Congress does not work to make important decisions now, the United States will go through some truly hard times as this century progresses. 

Reexamining Economic Sanctions: Why Trump’s Syria Sanction Decision Was a Smart Move

In his second term, Trump has worked on trying to make Greenland great again by offering to buy it, as well as trying to make Gaza great again by proposing an annexation. Now Trump has his sights on making Syria great again by saying that he will remove economic sanctions. This decision is a considerable change in how the United States has dealt with Syria in the past few decades. 

The United States has implemented at least some form of sanctions on Syria since 1979, which is when the U.S. declared Syria a terrorist state. Sanctions intensified in 2004, and again in 2011 when the civil war began in Syria. The purpose of these sanctions, particularly the 2011 version, has been to deprive the al-Assad regime of resources to harm their citizens, as well as ultimately transition to a democratic regime. 

I am not here to say that the sanctions were the only thing to shock Syria in recent year. In addition to the civil war and the sanctions, there was the COVID pandemic, the Lebanese banking crisis that limited Syria's access to credit, an earthquake in 2023, the fluctuation in food prices caused by the Russia-Ukraine War, and regional conflicts that disrupted trade flows. That being said, it took about 13 years of civil war to finally overthrow Bashar al-Assad, and Syria is still not a democratic regime. Aside from that, the results do not look good:

• The World Food Programme reported in 2023 that "following 12 years of conflict, an economy crippled by runaway inflation, a currency that has collapsed to a record low and soaring food prices, 12 million people do not know where their next meal is coming from."
• As a February 2025 report from the United Nations Development Programme mentions, "Sanctions have played a key role in isolating Syria from the global financial system, restricting trade, increasing import costs, and significantly reducing both exports and remittances. These factors have contributed to the continued depreciation of the national currency." 
• A research paper from Security in Context shows how the sanctions deteriorated the humanitarian situation by bludgeoning the agriculture and health sectors (Arslanian, 2024).
• Even with carveout exemptions, financial institutions were wary of doing business with Syria, thereby cutting off banking channels and making it difficult to process transactions for humanitarian aid, trade, and private sector engagement (Human Rights Watch).
• Reuters reported on how the sanctions hit Syria hard. One such outcome was resorting to the black market for ill-gotten gains, particularly from fuel smuggling production of an amphetamine-like substance called captagon.

It is clear that the sanctions on Syria have not deterred human rights abuses, but rather has exacerbated human suffering in Syria. This is hardly the first time that economic sanctions have failed. As the Cato Institute points out in its academic review, sanctions can range from ineffective (see Pape, 1997) to backfiring because an oppressive regime's response to the desperation caused by the sanctions is to be even more repressive (e.g., Wood, 2008). 

A meta-analysis from the Peterson Institute for International Economics (PIIE) analyzing 200 economic sanctions from World War I to the early 2000s found that sanctions made at least "a modest contribution to a goal that was partly realized" 34 percent of the time (Hufbauer et al., 2007). If we are going to be fair to economic sanctions, economic sanctions have the potential to work when the scope is limited and the goals are targeted in nature. 

However, that has hardly been the case for Syria. The broad sanctions on Syria have caused humanitarian suffering to the point where 90 percent of Syrians live in extreme poverty, as well as having undermined Syria's ability to economically recover. If this recent transition has any chance of succeeding, Syrians need to see that their economic wellbeing is improving. 

This is not to say that removing the sanctions comes with zero risk. As the American Enterprise Institute points out, it is not clear that the current leader, Ahmad al-Sharra, has complete control of Syria. AEI also mentions that this could have spillover effects in terms of accelerating terrorist aggression in the Middle East. 

Forget for a moment that such an argument comes with mission creep and is well beyond the initial mission of quelling Assad's attack on his own people. Much like the Brookings Institution argues, continuing the sanctions could likely be more costly because Syria needs economic relief to best guarantee  a legitimate political transition. Given the humanitarian and economic situation in Syria, Trump is right in acknowledging that the costs of the sanctions outweigh the potential benefits.

Trump's Attempt to Slash Prescription Prices with Price Controls Will Slash Healthcare Quality

In an attempt to slash prescription drug prices, President Trump signed an executive order earlier this week addressing high prescription drug prices. Trump is going to implement a "most favored nation" (MFN) pricing model, which means that the cost of a prescription drug does not exceed the lowest price that other high-income countries pay for the same drug. Trump is exerting pressure on drug manufacturers to accept MFN pricing. While the executive order directs the Secretary of Health and Human Services to take "aggressive measures," it is unclear what those measures are. 

What we see President Trump doing is implementing price controls, which is rich since he called Kamala Harris a communist for her ridiculous idea of price controls for groceries during the presidential campaign. It does not matter which political party endorses price controls: they are a bad policy idea. It is not simply because there are centuries of price controls that have failed, whether that those are rent control, an overdraft fee cap, fixed exchange rates, price-gouging laws during natural disasters, and consumer loan interest rate caps. 

In 2022, I heavily criticized President Biden for the prescription drug price controls in the Inflation Reduction Act (IRA). I will be bringing those same criticisms to Trump's proposal because they still hold. By definition, price ceilings create shortages because the drug companies will be disincentivized to produce more drugs at reduced prices. The truth is that price controls do not eliminate costs, but rather shift costs at the expense of something else. What is that something else? 

One outcome of these price controls is that lower access to drugs would mean greater death. One study from the University of Chicago estimated that the casualties caused by the IRA would be 331.5 million life years across a 20-year timespan (Philipson and Durie, 2021). To give you some context, the COVID pandemic resulted in the loss of 9.7 million life years (Quast et al., 2022), which would be about 34 times the life lost during the worst pandemic in the past century. 

Not only that, but drug price controls in Europe translated into less drug research and development (Golec and Vernon, 2006). Fewer new medicines means worsening healthcare outcomes than would have occurred otherwise. That is not only for the United States, but across the globe. Another study found that the drugs that do get developed can have their entry into the market delayed by a year (Maini and Pammolli, 2023; Danzon et al., 2004). To reiterate an earlier point, a longitudinal study found that these delays reduce life expectancy (Lichtenberg, 2005).

Trump's executive order is going to be even worse than Biden's IRA price controls. Why? At least under the IRA, the laws mainly affected Medicare. With this executive order, Trump is expanding the scope of the price controls to the private sector, which means it will affect all prescription drugs. If Trump actually cares about reducing prices and making prescription drugs great again, he could focus on policy that makes the prescription drug market more competitive, such as allowing for increased reimportation of drugs, expanding access to generic drugs, or ending prescription requirements for a number of drugs. Otherwise, Trump will make prescription drug pricing an even bigger disaster than under the Biden administration.

Trump's Tariff Rationales Are As Incoherent As They Are Self-Contradictory

"They left as soon as they came." That is somewhat an accurate depiction of Trump's latest barrage of tariffs. On April 2, what Trump called "Liberation Day," he implemented a two-tier tariff system. In addition to there being a baseline 10 percent tariff on imports, he also imposed so-called "reciprocal" tariffs on 90 countries based on what he purported were other countries' tariff rates. As I pointed out in my critique of Trump's "Liberation Day" tariffs last week, his tariff rates were not calculated based off of other countries' tariff rates (he lied about that part), but rather other countries' trade imbalances. Rather than being taken as liberating news, the stock market ended up crashing to the point of causing the biggest two-day wipeout in U.S. history. 

Last Wednesday (April 9), Trump announced a 90-day pause on that second tier of tariffs (i.e., the ones above 10 percent), with the notable exception of China. The baseline 10 percent tariffs on imports remain intact. The Dow Jones, NASDAQ, and S&P have somewhat recovered from the fall. However, JP Morgan and investment firm Blackrock are still anticipating a recession this year, as are a majority of respondents from the quarterly Chief Financial Officer (CFO) Council Survey. 

I had a piece about how these tariffs could unsurprisingly cause a recession all ready to go, but I had to hold off because of this latest development....at least for now. I might end up publishing it here at a later date if Trump reinstates the second, higher tier of tariffs. In the meantime, I want to point out how incoherent this whole strategy has been. He threatens these high rates and then he rescinds them, at least temporarily, the moment the stock market decides to tank. It is not simply the haphazard, unpredictable modus operandi that bothers me, but also the rationales that Trump uses to justify the tariffs. From what one can gather, the Trump administration has laid out three main rationales for these tariffs.

1. A negotiating tool. On April 4, Trump said that the new trade barriers give the U.S. great power to negotiate better trade terms. This gets to the theme that Trump is trying to rectify what he sees as "injustices of global trade" that the U.S. has had to endure.
2. Increase government revenue. This is the argument particularly used by Trump's lead trade advisor, Peter Navarro. Even Trump himself has floated the idea repeatedly of repealing the income tax and replace it with tariffs. The Tax Foundation explains how that plan would not work, but I digress.
3. Bring manufacturing back to the United States. In a White House fact sheet, the Trump administration claimed that trade deficits are hollowing out the U.S. manufacturing base. He plans on using tariffs to revitalize U.S. manufacturing. 

Forget for a moment that the Trump administration's messaging about whether the tariffs are short-term negotiating tool or a long-term source of government revenue is inconsistent. I take issue with all three of these rationales by themselves. Trade deficits are not bad for the United States. The manufacturing sector is not going to have a revival akin to what it was like in the 1950s, in no small part to technological progress. U.S. tariffs are ultimately a tax on U.S. consumers and producers because that is where most of the tax incidence occurs. That is how it worked with the Trump tariffs from his first term. And as I have explained numerous times, collecting tariffs come with considerable economic harm to the American workers and small businesses that Trump claims to help. 

What makes the Trump administration's rationales for tariffs is that when put together, they make zero sense. They create an impossible trinity because if one of these rationales is true, then the other two cannot be true. How so?

Take the "tariffs as a negotiating tool" argument. If tariffs are merely a negotiating tool to make other countries comply with Trump's demands, then the tariffs are not collecting revenue because they are not ultimately implemented. That also means the tariffs cannot afford domestic manufacturing the protection it would need to rebuild. 

What about the "government revenue" argument? If the government is collecting this tax revenue, it means that the tariffs were more than a negotiating tactic. It also means that if the tariffs are successful in collecting tax revenue, it also means that foreign goods are still crossing the border. So naturally, they are not creating jobs at home because the trade flows have not significantly changed.  

If the tariffs are being used to bring manufacturing back, then they are more than a mere negotiating tool because the taxes have been implemented. However, if manufacturing has indeed come back to the United States because of the tariffs, that means production is taking place in the United States and the United States is exporting. The idea with this rationale is to create a cheaper domestic product, which ideally for Trump would mean avoiding imports. Since the tariffs here are import taxes, the government is not going to be collecting all this wonderful revenue to make government coffers great again. 

As I have pointed out since 2016, Trump's love affair with tariffs is a torrid one rife with torment and anguish. The Trump administration's communication with tariffs has been incoherent, showing that impulse is dominating the decisions, not clearly thought out, serious policy decisions. Sometimes tariffs are presented as a short-term negotiation tool used to bludgeon other countries into submitting to Trump's will. On the other hand, Trump says things like "my policies never change." His Commerce Secretary also said that the tariffs will stay in place, which was only three days before Trump announced the pause. So which is it: short-term negotiating tool or long-term government policy? 

An important lesson I remember from my days as a market researcher is that the one of the only things that business owners generally have a bigger issue with than red tape is market uncertainty. Why? Uncertainty is not conducive for businesses to make investment decisions. Businesses make plans months or years in advance in the hopes that investments pay off in terms of increasing profit and equity. Consumers also feel better when purchasing goods or services from businesses and knowing that those businesses have a high likelihood of staying in business. It is hard to maintain that confidence when Trump is being impulsive and making major trade policy decisions "from the heart."

Although the Trump administration is uncertain with how it wants to try to dupe the American people in falsely believing that tariffs are the greatest thing since sliced bread made solely in the US of A, what is certain is that this inordinate amount of trade uncertainty with Trump's tariff nonsense is going to put the American economy in a tumult and the stock market going up and down like a yo-yo until there is clarity. 

Unless Congress can end the president's deceptive "emergency" declarations and retake the tariff power that the Constitution grants it, odds are we will be back here in three months with Trump reinstating the tariffs because he is the one holding all the cards. In the meantime, it will be the American people and businesses who will suffer from this tariff nonsense. 

How Lockdowns and Other COVID Measures Have Caused Suffering, Even in 2025 (Part II)

While the COVID pandemic might seem like a distant memory that started about five years ago, the truth of the matter is that we are still not over the impact of the lockdowns or other COVID measures. The fact that there are multiple impacts does not shock me in the slightest. I was against lockdowns before they started in the United States, and I was adamantly opposed once implemented because of the harm it was going to cause. This is hardly the "I told you so" I want to write, but here we are. I was thinking about this enough where I decided to write a multi-part blog series on how we still feel that impact to this day. 

Part I covered the health-related suffering, whether that was greater backlog in health services, higher obesity rates, higher rates of substance abuse, or less trust in public health experts. In Part III, I intend on covering the political costs that we still pay today. As for Part II right now, I will cover the costs related to the economy. 

School closures harmed the economic future of today's children. School closures meant that students were unable to effectively learn. In terms of academic achievement, students have still not recovered from the pandemic. As I pointed out in 2022, that loss in academic achievement and attainment will translate into diminished wages in the future. Not only will it reduce wages, but life expectancy, thereby diminishing their quality of life in the long-run. So much for the mantra "Think of the children!"

Lockdowns stunted our social skills and socializing, and by extension, can impact the economy. As I wrote in 2023, the lockdowns lowered children's social-emotional skills in comparison to the pandemic. That makes sense because childhood is a formative moment in one's emotional development and depriving children of socialization erodes social skills. While children were the most affected, they were not the only ones affected. 

According to a recent study from the Journal of the American Planning Association conducted by researchers at UCLA and Clemson University, people spend an average of 51 minutes a day less on out-of-home activities than they did pre-pandemic (Morris et al., 2024). This 51 minutes does not count the reduction of 12 minutes for daily travel. There also seems to have been at least some impact on college students, as well (Cerutti et al., 2024). Less socializing not only has impact on our mental health, but less socializing and going out can mean less economic growth. 

Increased poverty and income inequality, especially in developing countries. Before the pandemic in 2019, 37 percent of U.S. citizens could not cover a $400 emergency without needing to borrow or sell something (Federal Reserve). Economic insecurity was even more pronounced in developing countries, where 50 percent of households could not able to sustain basic consumption in the event of income loss for more than three months (Badarinza et al., 2019). As the World Bank illustrates (but does not explicitly state), having to endure lockdowns for multiple months exacerbated income inequality. 

As the International Monetary Fund points out, the ability to work remotely is highly correlated with education, and thus pre-pandemic earnings. This was more pronounced during the pandemic because those who worked remotely during the pandemic were able to maintain their financial status better than those who could not. As the IMF shows in another research paper (Fuceri et al., 2021), this trend impacted employment of lower-income households. Since it diminished the employment prospects of these individuals, the effects of lockdowns continue to exacerbate income inequality, and by extension, their future earnings. 

Federal debt made worse by policy choices. As I covered last year, the greater the COVID restrictions, the greater the budget deficit due to the economic downturn. The Coronavirus Aid, Relief, and Economic Security (CARES) Act cost over $2 trillion, with the American Rescue Plan (ARP) Act costing $1.9 trillion. And that was just the COVID-related Federal spending in the United States during the pandemic. 

The trajectory of U.S. debt was already not in a good place before the pandemic. As I brought up during the pandemic, greater debt means more interest payments and less savings and investment for citizens. Because Trump is not showing any interest in reducing debt in any significant way, the federal debt gained during the pandemic combined with greater anticipated deficits will ultimately diminish quality of life for us all. Sadly, this was not a strictly U.S.-based phenomenon. Average global debt levels have increased by 12 percentage points as a result of profligate spending during the pandemic. 

Trump's Mass Deportation Idea Is As Massively Lousy As When He First Proposed It, If Not More So

There has been no shortage of terrible policy ideas to criticize and scrutinize during this presidential election cycle. Vice President Harris wants to implement such inane ideas as taxing unrealized capital gains and price controls on groceries. Trump has cranked out multiple absurd ideas, including, but not limited to, absurdly high tariffs and a temporary credit card interest rate cap. Today, I would like to cover one of Trump's longest-standing policy proposals: mass deportation. It is long-standing enough where I criticized the idea back in 2015. I did not like the idea back then and I certainly do not like it now. Here is why I think it is a terrible idea. 

Mass deportation is costly. There is the matter of how much this would cost. Think about what would go into enforcement. The government would need to identify, locate, detain, and legally process, and then remove 11 million unauthorized workers. Then there is the matter of creating and expanding upon detention facilities, courtrooms, and other infrastructure, not to mention hiring additional personnel. According to the American Immigration Council's October 2024 study on Trump's deportation plan, that would cost an estimated $967.9 billion over the next decade. 

Mass deportation would harm the U.S. economy. Immigrants are a net gain for the economy, and yes, that includes low-skill immigrants. Aside from the labor they provide, undocumented immigrants pay about $100 billion in taxes annually. Also, as this policy analysis from the Brookings Institution points out, unauthorized immigrants typically take different jobs from low-skilled U.S.-born labor (e.g., housekeeping, construction, caregivers), not to mention contribute to the long-term fiscal health of the U.S. 

As such, removing these laborers that are positively contributing to the economy would harm the economy, a concept I explored earlier this month with the housing construction market. The Peterson Institute for International Economics (PIIE) found that deporting 8.3 million unauthorized workers would brings the GDP to be at 7.4 percent below the baseline by 2028. The Wharton School of Business, which is the premiere business school in the U.S., similarly estimated a negative trend regarding GDP: a reduction of GDP per capita by one percent between now and 2050. 

PIIE also found that deportation would decrease the number of employee hours worked by 6.7 percent. That makes sense, especially since deportation has been shown to lower the employment and hourly wages of U.S.-born citizens because of an increase in labor costs and reduction of local consumption (East et al., 2023).

Mass deportation would not solve crime-related issues. During the Vice Presidential debates, J.D. Vance said that a Trump 47 administration would start by deporting the undocumented immigrants who are criminals. Trump also said he wants to target migrant criminal networks. The idea is that by deporting migrant criminals, it would lower the crime rates because there are fewer criminals. Forget for a moment that immigrants are 60 percent less likely to commit crimes than U.S.-born citizens (Abramitzky et al., 2023).

Theory gets in trouble with practice here because the U.S. government has already tried this before. Secure Communities was a program through Immigration and Customs Enforcement (ICE) that targeted unauthorized immigrants with the cooperation of law enforcement. A study from the Institute of Labor Economics found that the SC program did not reduce property or violent crime (Hines and Peri, 2019). Why would that be the case? Enforcing deportation is a labor-intensive endeavor. It does not make police more efficient in solving cases and it ties up resources that could be used to solve cases. 

Not only does deportation do nothing to lower crime rates, but it also exacerbates the victimization of Hispanics. Why? They are less likely to report crimes because there is lack of trust in law enforcement to do their job when the possibility of deportation is looming over their heads (Gonçalves et al., 2024). 

Mass deportation would violate a lot of civil rights, as well as destroy lives and erode civil society. This would destroy the lives of migrants and have migrants that have yet to be detained live in a climate of fear. As for the Constitution, it does not take much to see how much abuse of Fourth Amendment and Sixth Amendment constitutional rights would take place if Trump were given the green light to deport immigrants. 

Worksites, immigrant neighborhoods, and Catholic churches would be raided. The amount of surveillance to carry this out would be staggering. Police officers knocking on doors at the middle of the night would be reminiscent of the Stalinist regime. In the meantime, detaining Latino migrants would come with human rights abuses that FDR committed against Japanese-Americans during World War II. I would be worried about the detainees in detention camps. As a September 2024 report from the Office of Inspector General already lays out, ICE already has issues being able to "maintain a safe and secure environment for staff and detainees."  

If you look at history and such examples as Argentina in the 1970s, the Pinochet regime in Chile, or Stalinist Russia, detaining and deporting people is not the hallmark of a free society, but of an authoritarian one. 

What is the likelihood this would actually happen? On the one hand, Trump talked a big game about deportation for his first term but did not carry it out. 

On the other hand, Trump is better poised to implement mass deportation should he be elected. For one, he appointed 245 judges during his first term, thereby being fewer legal obstacles. Two, this idea is more popular than I thought. According to a U.S. Today/Suffolk University poll conducted earlier this month, 45 percent of American support the idea of mass deportation. 

On the other other hand, our immigration system is already dealing with considerable backlog. Going door-to-door to detain people is labor-intensive. It is not something our current immigration system can handle and would require cooperation from state and local police, which is not a given. Plus, it would require cooperation from the migrants' native countries, which is tenuous at best. 

Postscript. From a political lens, it makes sense why this is popular. People are getting fed up with what is taking place on the U.S.-Mexico border, not to mention how endemic and normalized crime has become. From a policy lens, deportation makes zero sense. Deportation is a costly endeavor that will harm the economy (including U.S.-born workers) while doing nothing to lower crime. Meanwhile, the U.S. government would have to trample constitutional rights and ruin millions of lives in the process. It is not only anti-immigrant, but anti-American.

It would take a lot of violence, force, and taxpayer dollars to make this a reality. Why should we deport largely peaceful, non-violent, hard-working people who are contributing to the economy and paying taxes? Why create a culture of distrust, paranoia, and division? Why pay so much money and derive no benefit? I agree that this country could use considerable immigration reform, but mass deportation is not the answer. For all of our sakes, I hope that this policy proposal is nothing more than a campaign gimmick and not a reality in which this country becomes more despotic and tyrannical, a prospect that would have the Founding Fathers rolling in their graves.