Welcome to the Cato Podcast. I'm Ryan Bourne, Cato's R. Evan Scharf Chair for the Public Understanding of Economics. Last night, President Trump delivered his 2026 State of the Union address to Congress. In it, he said America is back, bigger, better, richer and stronger than ever before, and that on the 250th anniversary of the country's Declaration of Independence, we were on the cusp of the golden age of America. Like most modern state of the unions, this wasn't a speech with a clear through line that kind of justified how America is being governed and why. There perhaps wasn't even a setting out of clear priorities. But there was a story, a claim of dramatic turnaround and a catalogue of victories and human interest stories used to push certain narratives and assorted pieces of legislation. Nevertheless, from economic claims to serious passages about our international adversaries. There were some interesting nuggets. So to search for the rare pieces of policy meat on the rhetorical bones, I'm delighted to be joined by my colleagues, Clark Neely, Cato's Senior Vice President for Legal Studies here. Good morning. And Evan Sankey, a policy analyst in our defense and foreign policy studies shop. Good morning. So gentlemen, welcome. It was a one hour, 48 minute speech, the longest state of the union in history. raucous and partisan as ever, with all the spectacle and stories that we've come to expect. So other than that rousing patriotism at the start and the end, the middle of the sandwich did contain some policy. So I just want to start with a general question. What stood out for you about this speech in the area that you're responsible for studying? Well, I think the fabulism. You know, trying to fact check in real time was a real effort. Just to take one example, Trump says there's no crime now to speak of in Washington, D.C. Anybody who lives here can see that that's false. You could also go online and discover that D.C. is actually among the less safe large cities in America and remains so today. So I think that for me really set the tone for the whole speech. There's really nothing in the speech. Not every single word was false, but there's nothing in the speech that you could rely on. And a lot of it was complete fabulism. This was a domestic policy speech. And for the foreign policy department here, that was a relief. President Trump has assembled an enormous military force in the Middle East and for weeks has seemed poised to attack Iran in some fashion. He broke no new ground on foreign policy issues last night. He said he still committed to diplomacy with Iran. His language regarding other hotspots was pretty mild. China was mentioned just briefly in relation to Venezuela. Russia also mentioned just briefly. And so from the perspective of those of us who'd like to, who favor US military restraint, President Trump didn't break anything last night in foreign policy terms. And so that is a relief. I can be grateful for that. I mean, on the economics, from my perspective, I agree with Clark, there was a lot of triumphalism there that I don't think really matches up to the underlying statistics. Trump said that he'd slain Joe Biden's inflation, that the country was experiencing tremendous economic growth, and that his tariffs had delivered not just more revenue to the federal government, but also helped deliver peace and stability around the world while correcting for other countries' unfair trade practices. I think if you look at, under the bonnet, all of the actual statistics here. The reality is that real GDP did grow by a healthy clip last year, 2.2%, but that was actually slower than the 2.8% in the year before. So a solid economy, but certainly not a boom. And where inflation is concerned, the president really did pick and choose his metrics. If you actually look at the headline rates that the Federal Reserve cares about, inflation has been very stubbornly above target. It's about 2.9% at the moment, so almost 50% above the 2% in target. And as a result of that, President Trump is deeply underwater on inflation and prices in terms of his net approval. And I think that's why he's scrabbling around for many ideas to try to improve affordability. So perhaps we'll come back to that a bit later. But I want to start, Clark, with the big subplot just before this speech, which was on tariffs. And Trump explicitly referenced last week's Supreme Court decision that overturned his ability to use emergency economic statutes to impose broad-based tariffs on countries around the world. He called it an unfortunate ruling and then later described the Supreme Court's unfortunate involvement. It seems to me that it's a constitutional role to get involved in these things. But in plain English, could you just really describe, first of all, what did the Supreme Court actually say the president can't do here? Well, we're talking about the learning resources case, or we could call it the IEPA case. It's the acronym for the law at issue. And the question in the case was whether Congress had delegated to the president the authority to implement a broad set of tariffs, essentially at his own discretion, not only to implement them but to change them at will, which, of course, he proceeded to do. There's even a paragraph in the majority opinion. So this is a 6-3 decision striking down President Trump's tariffs under AIPA. And Chief Justice Roberts wrote the majority and there's a paragraph early on in the majority opinion in which Justice Roberts kind of ticks off the different ways in which Trump adjusted tariffs. You know, the heavy implication being kind of on a whim just, you know, and I think that's that's right. And that's not why the president lacks the authority to impose tariffs, but it provides sort of some atmosphere and backdrop. The basic problem in this case is that, as we've seen in a number of cases before this one, you've got a broadly worded statute that was pretty clearly written to address one particular problem or set of problems. And then it's pressed into service years or even decades later so that the president can implement a policy that Congress could have explicitly embraced in legislation and has not done so. But you have a president that wants to pursue that policy anyway. And what they'll essentially do is you have their legal staff parse through existing federal statutes and just find some language that maybe could plausibly support the president's implementation of that policy. And that's exactly what happened here under this AIPA law. The basic point that the Supreme Court made in this case and one that I agree with is that if we're going to attribute to Congress the intent of delegating an extraordinary power like the ability to completely rework international trade policy, they need to speak with clarity. It needs to be clear that that's what Congress was doing. And as the six justices in the majority explained, I think, quite persuasively through the voice of the chief justice, this law just didn't meet that standard. There was an interesting kind of sub-argument among the justices is whether this was a major questions doctrine decision. For those who don't know, the major questions doctrine is simply basically the label for what I just said, that if we're going to attribute to Congress the intent of delegating to the president some extraordinary power, like to forgive $400 billion in student loans, for example, the law needs to say that clearly and not, you know, with these kind of General terms like in IEPA, like regulate, doesn't obviously mean the power to implement tariffs, which are, after all, tax. And that was the other point that the majority really emphasized, is that the power to tax is one of the most important and potentially destructive powers that government possesses. There's a very good reason why the founders were extremely careful about the tax power when they drafted the Constitution. Among other things, bills to raise revenue have to originate in the House, which, of course, is the body of government that's at least in theory the most accountable to the electorate because they have to stand for election every two years, all of them. And the list goes on. So the bottom line here is that the government, just the Trump administration, just did not make a persuasive case that Congress had delegated to the president this extraordinary power to implement these tariffs that are functionally taxed. Now, three of the conservative justices, Kavanaugh, Alito, and Thomas, saw it otherwise. And Justice Gorsuch, to his immense credit, wrote a concurring opinion in which he basically took a number of his colleagues to task for their seeming inconsistency. On both sides, right? On both sides, right. So in this case, you had the liberal justices, Kagan, Sotomayor and Jackson, in effect embracing, if not the label major questions doctrine, then at least to my view anyway, the sort of the framework that this statute doesn't say with any clarity what the president says that it says. And so he doesn't have the power to do the thing. But in this case, you had the conservatives who switched sides. These conservatives were solidly in the majority in a number of Biden era cases including not only the student loan case but another one involving electrical power generation where they embrace this idea that if you going to say you know Congress gave to the president this immense power it needs to say so clearly In this case they felt that it was sufficiently clear that this IEPA statute gave to the president the power to essentially unilateral power over tariffs of all kinds. And I just think that's wildly implausible. And obviously, so did Justice Gorsuch, and he didn't hold back. I think many people expected some really pointed criticism of the Supreme Court justices at the State of the Union. And in President Trump's terms, He was pretty restrained on that, but he did quite pointedly promise to reconstruct the protectionism that had been deemed illegal using other statutes. He explicitly said congressional action will not be necessary. So, you know, it wasn't directly challenging the decision, but perhaps challenging the spirit of the decision. I guess the hope when that judgment came down was that this would provide businesses who haven't known where tariffs are going to end up for the best part of the year would be provided with more certainty. But at the moment, they face both the uncertainty of whether they're ultimately going to be refunded for the illegal tariffs that transactions involving them incurred and now whether the courts will quickly strike down some of these new attempts to reconstruct the tariffs through other statutes. Am I essentially right on that? Do you think this is going to be rolling on for months and months and months to come? Unfortunately, I think so. As you pointed out earlier, that was the adjective of choice for Donald Trump during the State of the Union that the president described the Supreme Court's involvement as unfortunate. And the ruling was unfortunate, which is about as gentle rhetoric as you can get from President Trump. One wonders if maybe he realizes that the Supreme Court will probably also be reviewing the constitutionality or the legality of these alternative tariff mechanisms. One in particular that he mentioned, he described this one as, quote, fully approved and tested as an alternative is Section 122 of the Trade Act of 1974, which is apparently the one that he's already turned to to impose, I don't know what it is, 10 or 15 percent tariffs. As our Simon chair, Professor Elias Soman, points out in a piece that he published just recently, these alternative statutes actually contain significant constraints. There's a lot of hoops and hurdles that have to be surmounted before the president can even plausibly invoke these authorities. That particular one, Section 122, for instance, requires a showing that there's a fundamental international payments problem. Yeah, balance of payments crisis. Balance of payments, right. That is large and serious or imminent depreciation of the dollars, things of this nature. And so there's just not carte blanche in any of these other statutes. They're all going to be problematic in some way. And I think it's not certain, but I suspect that the federal judiciary is going to take from the IEPA decision at least a tacit message from the Supreme Court to perhaps cast a bit of a jaundiced eye on these fallback positions. You may remember that President Biden did something very similar with the student loans. He said, well, I can just fall back on another statute and do the same thing. I think that just is not a plausible response. it's doubtful that they would have started with a relatively weaker tariff statute. So I don't think they probably have much to fall back on. Unfortunately, they probably can spin this out for a while. I would say probably months and possibly years, but hopefully not that long. And the lower courts do have the power to bring some of this stuff to a head. So we're not just sort of in perpetual tariff limbo. but we're it's not going to be the answer we're not going to get this question answered next week or next month sometimes when we host these podcasts where we're discussing lots of issues at once there are you have to think of quite awkward ways to join together different disparate topics but the president did say that one of the consequences of his tariffs was that they were bringing peace around the world you know historically we free marketeers have tended to think global integration through trade is a kind of bulwark against bellicosity, but Trump seems to think the exact opposite. But the most consequential foreign policy passage, I have no doubt, was about Iran. As you said, Evan, Trump claimed that last June the US had obliterated Iran's nuclear weapons program with Operation Midnight Hammer, but he then denounced the regime, denounced the morality of the regime and the recent killing of tens of thousands of protesters. Certainly went about them more than any other foreign adversary and kind of brought it all the way back around and said Iran is again pursuing their nuclear ambitions, that the countries were in negotiations, but that he wanted Iran to say those secret words, we will never have a nuclear weapon. So with this big military buildup in the Middle East, it's difficult for me, somebody who doesn't follow foreign policy as closely as you do, to know whether this is still a really high stakes game of diplomacy or we're very much on the glide path to strikes and this is kind of rolling the pitch for that. So where are you on this? Put the case for me that this is still ultimately high stakes diplomacy, which I think is what you believe. That's right. I'm still in the high-stakes diplomacy category here. There are talks between Steve Wyckoff, Jared Kushner, and their Iranian counterparts scheduled this Thursday. I think it's clear from the way that President Trump spoke about Iran last night that he wants to give room for those talks to unfold and give room for Iran eventually, hopefully to make concessions. I think the language on Iran last night, it was sort of a greatest hits of President Trump's lines on Iran from the recent past. He mentioned again, Midnight Hammer destroyed the nuclear program. Interestingly, he also said Iran is trying to reconstitute that program, which is kind of a tacit admission that maybe Midnight Hammer didn't accomplish everything he said it accomplished originally. I guess you can square the circle that they're really ultra fast at rebuilding. That's right. And he mentioned, you know, Iran had killed 32,000 protesters. That number is probably a little high. He also mentioned Iran is building missiles that can hit Europe and that they're working on missiles that can hit the United States. So in the terms of the motivations of a potential strike on Iran, it's still a muddle. Trump has never quite zeroed in on a single thing. It seems like the nuclear issue is the most important issue. And Trump had said a couple days previously to the speech that that is the key thing. But in this speech, again, it was a little bit of a muddle. He repeated again that Iran's leaders won't say the secret words that we will not get nuclear weapons. That is false. They have said those secret words, including a couple of days ago, their foreign minister actually tweeted them out explicitly. Our intention is not to get a nuclear weapon. So I think overall, you know, my worry and the worry of some of my colleagues here was that he would announce that bombing was commencing on television. And thankfully, that did not happen. The naval and air forces that have been deployed to the Middle East are still there. So that angle to the diplomacy is present, and it is always possible that he will order strikes. In the past few days, there's been leaks from the administration that his military advisors have begun to emphasize the costs and unintended consequences of strikes. Unclear how that's weighing on Donald Trump. He denounced those leaks on Twitter. But then in the State of the Union, it's clear that he's still, for now, on a diplomatic track. And we're happy to see that. Could you just put this military buildup in context for us? In terms of the scale, the amount of ships that are actually there, the movement, are there any parallels in terms of just prior to previous conflicts or previous avoided conflicts? Sure. It is the largest buildup of U.S. military forces in the Middle East since 2003, since the invasion of Iraq. About 50% of our deployable air power, so about 50% of the U.S. Air Force's combat aircraft and logistics aircraft are deployed in the region right now. So the Navy, I'm less clear on the totals. There are two aircraft carriers, a number of destroyers. Submarines are always kind of hard to get a handle on, but it seems like it's among the largest deployments of naval power ever in the Middle East by us. Um, what there isn't, uh, is a built buildup of land power of the sort that you would have seen before the Gulf war or the, or the second Gulf war, um, which, which fits with president Trump's, um, pretty consistent inclination to avoid boots on the ground or at least boots on the ground for long periods of time. So another area of foreign policy that did get some attention was a lot of the celebratory rhetoric around the overthrow of President Maduro from Venezuela. It was quite interesting that Trump talked about a brighter future for Venezuelans But he described Venezuela right now as a new friend and partner obviously cited the I think he said 80 million barrels of oil that were being shipped from there. But he didn't really say anything about next steps, which was quite intriguing. Some might worry this is legitimizing a regime that the president thinks he can do business with, but is still obviously deeply associated. and individuals who were within Maduro's pretty brutal authoritarian regime. So am I reading too much into that? How did you read the runes on that language about Venezuela? I think the administration is still feeling its way with Venezuela. They are unsure the extent to which the new president, Delcio Rodriguez, is on side. they're unsure the extent to which um you know early on trump says oh we're going to run venezuela i think uh that was the exact word that he used and i think there's been a growing awareness that you know it's going to take it's going to take more diplomatic care for from the administration particularly from marco rubio to kind of get the things that we want obviously there's a threat of military force in the background. But Delce Rodriguez is not an American puppet. And I think the way that President Trump spoke about her last night, that, what did he say? He said that she's a friend now. I mean, it was pretty mild. It wasn't like we're running the place, like he said, shortly after the operation to take Maduro. So I think overall, the Trump administration is, they're managing expectations on Venezuela. So Clark, going back to your issues, there was a lot in there on crime and law and order, not just the discussion of justification for sending troops out into the speech, into the streets, sorry, and of major American cities, but also a lot of very harrowing individual stories about people who've been either brutally murdered by illegal immigrants or, you know, the National Guard's people who were shot here in DC. Now, obviously, probably using anecdotes as a justification for new legislation tends to produce bad law in many cases. But I mean, where do you put the big picture on crime in the United States? Give us some kind of context for where we are in this, because to hear the president speak, you would think that we're in the depths of the biggest crime wave in recent history. And I accept that in many US cities, crime is still a big problem. It still has many costs, a lot of which are unseen, you know, putting things behind barriers, just inconveniencing people's lives, meaning that they won't aren't willing to go out and walk in certain places at certain times. But, you know, you're looking at this from a policy perspective, just give us the bigger picture of where we actually what is the state of crime in the United States? You know, looking at crime rates is a bit like looking at the stock market, depending on what snapshot you take. You can essentially come away with just about any picture that you want. But if we look at it in context, and by that I mean, let's say over the past half century or so, the clear trend is a substantial decrease in crime since, let's say, the 1970s. And that would include the most serious crimes like homicide, which Trump actually led by saying that the murder rate is the biggest decline in 125 years. And part of that is because we had such a spike under COVID. There was a spike in all crimes, including particularly violent crimes and homicide associated with the COVID epidemic. And so, yeah, there has been a tremendous decline, but that was in part because there was a spike. And so what's happened essentially is that we've not only returned to historic lows, but that trend has continued. So the most important takeaway is that from the standpoint of the average person, we're in much better shape now as far as crime than we have been in generations. And the causes of crime are not well understood. the reasons why crime declines are not well understood. Of course, that doesn't prevent President Trump from taking credit. You'll never see a politician accept responsibility for increasing crime rates, but you'll always see them take credit when crime decreases. But I think that on balance, that's a kind of a—I wouldn't say it's a non-issue. I mean, of course, crime touches people's lives, but it's one area in which we can, I think, look to over a period of, again, many decades and say the trend here is somewhere between good and very good. And so on that particular subject, I think that there's a reason why President Trump was, you know, essentially resorting to these lurid anecdotes. And I don't in any way want to diminish the tragedy of the stories that were shared. Some of them were quite harrowing. And And as is his way, President Trump was inclined to describe those in extremely vivid and even lurid terms. But again, looking at it from a broader perspective, the trends are quite good. Yeah, and I think one thing that I took away was that when it came to the illegal immigration issue and the deportations, Trump very much in this speech reverted to the more defensible policy goal which was to get rid of illegal immigrant criminals like hardened criminals so he used those descriptions of many of those stories to justify deportations of course the deportations that we've actually seen in the agenda that we're seeing on US streets go far goes far further than targeting violent criminals indeed you know the big criticism of what he's been doing from our immigration experts like David Beer here at Cato is that he's not using the marginal resources of government to target those hardened violent criminals and is actually, you know, wasting a lot of resources targeting people who are just going about their lives, trying to earn a decent living and contributing to society in various different ways. So I thought that was interesting the way that he reverted to the more defensible stuff rather than, you know, a broader justification for what he's doing on deportations more broadly. Evan, the dog that didn't bark on foreign policy was China. I think it was mentioned once in the context of the failure of its kit to defend the Maduro regime in Venezuela. But, you know, China was arguably the origin story for all of the tariffs that threatened to dominate this Trump presidency and blow up this presidency potentially. um did you read it as strategic that uh china wasn't mentioned uh or a sign the administration is being overtaken by events elsewhere in the world or or something else how did how did you read the the lack of mention of china when in previous trump speeches it's very much been heralded over a long period of time as um the united states chief geostrategic adversary I think there are a couple of things going on here. First is that Trump has a summit coming up with President Xi in Beijing in April. And in the lead up to that summit, he has been careful about what he says about China and about new policy initiatives towards China. Uh, so for example, he has slow walked some, some new economic sanctions moves towards China. He has been careful about what he says about Taiwan. Uh, he reportedly held a phone call with the prime minister of Japan where he, it's unclear what exactly he said, but it's widely thought that he asked her to back off of some of the comments that she had made about Taiwan. And so Trump invests a lot of importance in his relationship with President Xi, and he wants to get a deal in April in Beijing. And that means that if he didn't have to talk about China in a public setting like this speech, he probably They didn't want to. Second thing is the Trump administration is deeply divided about China internally. There's a group that wants to have a more moderate balance of power policy. There's a group that are sort of traditional Republican hawks who would like to turn up the temperature. And then there's a group that wants to buy time for the United States to become more economically self-sufficient and reduce these supply chain vulnerabilities that we have vis-a-vis China. And the interplay between these three groups has, over the past year of Trump's time in office, produced some incoherence. There have been cases where policies have been announced and then suddenly reversed. There have been cases where Taiwan policy has flipped from one day to the other. And I think that if your own administration is internally divided, the safest thing in a speech like this is to not say too much about it. I would add that Russia also did not get much of a mention. There was like a brief couple of sentences on it. I think in each case it kind of because Trump doesn have much to show for either relationship yet There a fragile trade truce with China There is still not a ceasefire with Russia. And so it's harder for him to brag about. It's also more risky to say stuff about because it might interrupt negotiations going on behind the scenes. Was there also the sense that it might have been impolite to go hard on the need for peace with Russia and Ukraine, given it was, as I understand it, the fourth anniversary of the invasion yesterday? I also wonder, from my own reading, and maybe you could clarify this, my understanding is that Ukraine has been making more gains recently. So, you know, Trump, when Ukraine was struggling last year, really turned up the urgency of a ceasefire in trying to end that conflict. But perhaps with Ukraine seeming to do a bit better on the battlefield, the urgency of that has diminished somewhat for the administration. There may be a little bit of that. It remains the case that battlefield gains or losses on both sides are very tiny. Um, I think president Trump, you know, they, they, they still have the correct judgment, which is that a ceasefire is in us interests, ceasefires in Ukrainian interests. Um, but they haven't, I, I frankly think that the, the key constraint has been Putin. Putin just hasn't been willing to play ball. Uh, that remains the key constraint. and they're kind of spinning their wheels on it and didn't have much to say as a consequence. So a big theme of President Trump's now since the 2020 elections really has been the issue of supposed electoral fraud. Trump last night in the speech talked about fraud from illegal migrants, if I'm remembering correctly, and he also talked about the need for less postal voting, unless you have a good reason to, and the need for everybody to show voter ID. I believe he also invoked Mayor Mamdani in New York requiring people to show two forms of ID in social security to help shovel snow in the city as a comparator for justifying his support for this type of legislation. So, Clark, I know that this is something that you and your colleagues at Cato have been working on closely. what does the president kind of get wrong with this narrative well an easier question might be does he get anything right I think you can certainly make a case for voter ID it's a perfectly defensible position but I think this was in some ways the the nadir of of his state of the union address I think for me as a citizen I found it kind of depressing because it was just deeply cynical attack on our democratic process of electing our leaders. And it's absolutely false that it is rife with cheating, as the president said. There will always be some irregularities in every election. It's simply not possible to have perfection. But the idea that cheating is rampant in U.S. elections is not only empirically false, as we at Cato and others have shown repeatedly, but I think it's deeply corrosive. It invites people to reject the legitimacy of those elections. And ultimately, if you reject the legitimacy of elections, you're ultimately rejecting the legitimacy of the government that emerges. And I can't think of I can't think of anything that's really more unfortunate, more corrosive to our democracy. And maybe the absolute worst line of the entire night, as far as I was concerned, is when he said that the only way Democrats can get elected is to cheat, which is to, of course, repudiate the very clearly expressed preferences of a significant number of citizens in this country who absolutely vote for Democrats and for reasons that they consider to be perfectly good reasons. And that's the essence of living in a democracy is that people disagree about all kinds of issues, including who should represent us in government. And the idea that one of the two main parties can only get people elected to office by cheating, which is not something that President Trump insinuated. It's not something that he inferred. He came out and said it is just, I think, in some ways, a dagger at the heart of the of the whole democratic process. So I wasn't surprised to hear it, but I was extremely disappointed. Yeah. And I mean, it was very much you could very much kind of juxtapose that against some of the sugary rhetoric towards the end of the speech about the promise of America and American as a bastion of fair play and liberty and doing the right thing. If you played those clips side by side, there's a real kind of disconnect there. Just, I mean, on the economic stuff, I think that there's some corrosive issues there as well around trust in actual statistics, in understanding what's going on. I think it's definitely fair to say, to reiterate a point I made earlier, that the US economy has many fundamentals that are incredibly strong. and in many respects, Donald Trump's instincts, particularly on regulatory issues, his permissiveness towards allowing frontier AI technologies, his inherent liberalism and allowing different forms of energy extraction, you know, puts the US in a very, very strong position to benefit from this forthcoming industrial revolution that we seem to be on the cusp of potentially experiencing. My kind of read of the first year plus of the second Trump administration is that all of those tailwinds have been kind of undermined by the headwinds of unnecessary policy shocks, whether it be the tariff stuff, the slow burn corrosive effect that you get as the president of the United States takes active equity stakes in various different companies, tries to shake down individual businesses for certain activities and certain investments. Over time, that just creates an environment in which businessmen more and more tailor the activities of their, what should be profit-seeking companies towards the whims of politicians rather than underlying consumers. And so that's kind of what I'm worried about. And again, there was a big disconnect there between the liberties that are being celebrated for the 250th anniversary and how Donald Trump was celebrating those. And then the way that he was kind of undermining them on many of these economic policy issues. So you were not completely reassured when the president disclaimed any desire to reform our entitlements. He said he was going to protect Medicaid and Medicare, which are, of course, you know, two of the costliest programs. But then he reassured us that that wasn't a problem because Vice President Vance is going to go out and by eliminating fraud from the system, that's just – that's going to take care of our $1.78 trillion deficit just by getting rid of the fraud. Don't even have to touch waste and abuse. Just all you got to do is address the fraud. Yeah, I mean, this is an area where, you know, this does undermine trust in politics because some people do believe that. But if you just look at the raw numbers, those things just don't stack up as you're getting out. I mean, the Government Accountability Office has a deep look at fraud rates across all programs, tries to look at improper payments, which is a broader conception than fraud. you can find statistics that show at the top end that there's perhaps 500 billion dollars per year of fraudulent activity in terms of payments from the united states government now that's a lot and that should we should go after that you're always going to have some degree of fraud in any extensive program but that's a lot but uh there's a huge difference between 500 billion and 1.7 trillion which is um the deficit that we ran ran last year heading towards three four trillion deficits over the next decade. So those sums don't add up, nor do the suggestions that we could replace a large chunk of the income tax with tariff revenue. I think income tax revenue this year is projected to raise around $3 trillion. I believe the full year tariffs, when you take all of the tariffs into consideration, was producing revenue of around $300 billion. so you know 10 times disconnect where uh this is not going to solve the u.s budget problems which are overwhelmingly being driven by the interaction of pairs you go entitlement programs with an increasingly relatively aging population and until politicians are willing to tackle that we're going to face this sustained systemic uh budget problem and everything else is going to have to be carved up at various times in order to keep that show on the road. I'm afraid, though, that that's all we've got time for today. It's been a whistle-stop tour across economics, crime, constitutional issues, and foreign policy. But I really appreciate you both coming in to talk about it. You can listen to episodes of the Cato podcast released every Tuesday and Thursday on your favourite podcast channel. But thank you for listening, and see you next week. m� m
