The White House (via OMB) strongly protests Congressional efforts within the FY 2027 NDAA to prohibit the purchase of warships from foreign shipyards. The Administration argues that these restrictions undermine national security by limiting flexibility and hindering its strategy of leveraging allied yards, such as in the 'Finland model,' to drive investment into U.S. shipbuilding capacity. This signals a significant policy shift toward integrating international partners into advanced naval construction, suggesting the Pentagon is prepared to bypass traditional domestic build requirements for future combat vessels.
The Large Balance Sheet Is Costly Regardless of What the Fed Claims
English Summary
CATO’s analysis argues that the Federal Reserve’s large balance sheet, regardless of claims to the contrary, carries significant and ongoing costs. The core argument is that proponents, like Dallas Fed President Lorie Logan and Fed Governor Chris Waller, justify maintaining the current system by citing complexities arising from post-GFC regulations and fiscal flows, effectively blaming external factors for the Fed’s own policy choices. Specifically, the argument that the Fed’s marginal cost of supplying reserves is small is misleading, ignoring the broader economic consequences of artificially maintaining low interest rates and the impact of IOR on bank behavior. Reducing the balance sheet and ending IOR payments are therefore critical policy reforms to restore a clear separation between monetary and fiscal policy and mitigate these financial burdens.
中文摘要
CATO 的分析認為，聯邦準備銀行龐大的資產負債表，無論其否認聲明如何，都帶來了顯著且持續的成本。核心論點是，像達拉斯聯邦準備銀行主席 Lorie Logan 和聯邦準備銀行官員 Chris Waller 這樣的支持者，藉由引用因金融海嘯後（GFC）的法規和財政流動所產生的複雜性來合理化維持現狀，實際上將外部因素歸咎於聯邦準備銀行的政策選擇。 尤其，聲稱聯邦準備銀行提供儲備的邊際成本微乎其微的論點，忽略了維持低利率所帶來的更廣泛的經濟後果，以及 IOR（儲備金機構）對銀行行為的影響。 因此，縮減資產負債表並停止 IOR 支付，是恢復貨幣與財政政策之間明確分界線，並減輕這些財政負擔的關鍵政策改革。
Related Entries
-
1.
-
2.
The Western Pacific remains a highly active theater defined by sustained U.S.-led military exercises and escalating great power competition. Key evidence includes continuous joint operations, such as RIMPAC 2026 in Hawaii and the deployment of CSGs into the South China Sea, juxtaposed with increased naval activity from both China (PLAN task groups) and Russia near Japan's critical straits. These movements underscore a strategic push by non-allied powers to assert presence and challenge regional norms. Policy implications dictate that allied nations must maintain robust multilateral cooperation and interoperability to safeguard freedom of navigation and manage escalating tensions in the Indo-Pacific.
-
3.
The article argues that the post-Cold War era of U.S. unipolarity, established by the perceived invincibility demonstrated during the Gulf War, has ended. This decline is driven by globalization and technological diffusion, which have democratized advanced military capabilities, allowing regional actors to challenge major powers. Consequently, policymakers must prepare for a more volatile international order marked by frequent crises, heightened costs for securing global trade chokepoints, and reduced predictability from American power. The new rules dictate that great powers can no longer effortlessly impose their will through force.
-
4.
The article argues that current market borrowing costs are rising independently of the Federal Reserve's policy stance, challenging the assumption that the Fed controls all rates. Evidence shows significant increases in key rates—such as 2-year Treasuries and mortgages—even while the effective federal funds rate remains steady. This divergence occurs because market rates reflect complex factors like inflation expectations, credit risk, and geopolitical volatility, which are outside the central bank's direct control. Policymakers should therefore recognize that sustainable rate moderation requires credible disinflation and disciplined government budgets, rather than relying solely on Fed intervention.
-
5.
Mini cities are temporary, child-run educational models—originating in Germany and Austria—that simulate real civic life by having children manage businesses, elect officials, pay taxes, and handle legal disputes. The core argument is that these hands-on experiences provide a superior learning environment compared to conventional schooling because children learn through the natural consequences of their actions rather than abstract grades. Policy implications suggest expanding this model from temporary summer programs into permanent, year-round structures that blur the line between play and real economic activity, potentially serving as a comprehensive 'launching pad' for future adult careers.