Last week, President Donald Trump pushed for another round of economic stimulus, including a payroll tax cut. The question is who’s going to pay for it?

This new stimulus spending would pile on top of the trillions already approved. The U.S. Treasury projected that it would borrow $2.99 trillion in the second quarter fo this year. The Trump administration also plans to borrow another $677 billion in the July-September quarter, bringing the total fiscal 2020 deficit to $4.48 trillion. Meanwhile, The national debt hit $25 trillion just a few weeks ago and it’s already knocking on the door of $26 trillion. By the end of the fiscal year, it will likely be well north of $27 trillion and climbing.

Remember when Republicans opposed stimulus? Remember when conservatives railed against government borrowing and debt? Remember the Tea Party?

Today, virtually everybody agrees that trillions in government spending is “necessary” to boost the economy through the COVID-19 government shutdown – Republicans and conservatives included. Everybody is a Keynesian now.

But again, nobody seems to be asking the operative question: who will pay for all of this?

I can answer that question: You will.

So, enjoy that stimulus. You will either pay for it in higher taxes real taxes or inflation — probably both.

If Joe Biden wins the White House and the Democrats take control of the Senate, you will almost certainly see tax increases. And even if Trump wins, fiscal realities will likely necessitate some increases in taxes. But let’s imagine you somehow manage to evade the federal taxman. You’re still going to pay an inflation tax.

And it will be steep.

When the economy started to tank as governments shut things down in response to the coronavirus, the Federal Reserve fired up the printing press and created trillions of dollars out of thin air to monetize the debt. In practice, the central bank buys U.S. Treasury bonds on the open market with newly created money. It holds those bonds on its balance sheet and the newly minted dollars go into circulation. This increases the money supply.

An increase in the money supply is by definition inflation.

When you boil it all down, the Fed can’t do anything other than print money. It doesn’t manufacture any products or provide any services. It just creates inflation and devalues the dollars already in circulation. In effect, prices ultimately have to rise so the larger quantity of money can buy the same quantity of goods.

This devaluation takes away the spending power of the dollars you already have. It punishes savers. And it ultimately serves as a stealth tax.

FInancial analyst Peter Schiff summed up what is happening in a recent podcast.

“The way we’re paying for all this government is a massive inflation tax. The government is going to steal the purchasing power of anybody who has U.S. currency. And it’s that stolen purchasing power that everybody is spending now.”

When all is said and done, you will end up with a lower standard of living. The effect is no different than if the IRS pulled the dollars right out of your bank account. One way or another, you pay.

Mike Maharrey

The 10th Amendment

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”



Featured Articles

On the Constitution, history, the founders, and analysis of current events.

featured articles


Tenther Blog and News

Nullification news, quick takes, history, interviews, podcasts and much more.

tenther blog


State of the Nullification Movement

232 pages. History, constitutionality, and application today.

get the report


Path to Liberty

Our flagship podcast. Michael Boldin on the constitution, history, and strategy for liberty today

path to liberty


Maharrey Minute

The title says it all. Mike Maharrey with a 1 minute take on issues under a 10th Amendment lens. maharrey minute

Tenther Essentials

2-4 minute videos on key Constitutional issues - history, and application today


Join TAC, Support Liberty!

Nothing helps us get the job done more than the financial support of our members, from just $2/month!



The 10th Amendment

History, meaning, and purpose - the "Foundation of the Constitution."

10th Amendment



Get an overview of the principles, background, and application in history - and today.