In the last post, we went back to a period when America’s socio-economic system really did stop working.

The Great Depression wasn’t simply a recession that got very bad. Failures began feeding other failures. Banks collapsed and credit contracted. Businesses struggled and workers lost jobs. Household spending fell, putting still more businesses under pressure.

America responded by changing the system.

We created deposit insurance, Social Security and unemployment insurance. We established new rules for financial markets and gave workers greater ability to bargain collectively. Government invested in roads, dams, electricity and other infrastructure, while the federal revenue system changed dramatically.

Not every experiment worked. Some created consequences their designers hadn’t anticipated, and some programs that helped millions of Americans also excluded others. But by the time the United States emerged from World War II, it had a very different socio-economic architecture from the country that had entered the Depression.

And then something remarkable happened.

From roughly 1948 through 1973, the United States experienced one of the most extraordinary periods of sustained prosperity in its history. The 2015 Economic Report of the President gave this period a particularly interesting name:

The Age of Shared Growth.

The word shared is what interests me, because the remarkable thing wasn’t simply that the economy grew. It was how broadly that growth seemed to spread.

What did shared growth look like?

Between 1948 and 1973, real economic output per person increased by roughly 85 percent.

Worker productivity grew at an average rate of about 2.8 percent a year. At the same time, workers’ real hourly compensation grew at almost the same pace, about 2.6 percent a year.

We can see the change in household incomes too. Real median family income increased by roughly 40 percent just between 1947 and 1960. The share of income going to the top 1 percent fell substantially, while the share going to the bottom 90 percent rose slightly.

The official poverty series doesn’t begin until 1959, but from then until 1973 the poverty rate fell from roughly 22 percent to about 11 percent. Homeownership, which had already begun climbing rapidly during the 1940s, rose from 43.6 percent in 1940 to nearly 62 percent by 1960.

America was producing substantially more wealth, and improvements were showing up in the material lives of a very large portion of the population.

That prosperity wasn’t equally shared, something we’ll come back to. But the breadth of the gains was still remarkable.

What conditions allowed a growing economy to translate into broadly rising prosperity?

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Was America prepared for its opportunity?

I’ve known people who spent years building businesses before something happened that, from the outside, seemed to make them successful almost overnight.

Maybe they landed an enormous customer. A competitor disappeared. A market suddenly opened. The right investor arrived. A new technology created an opportunity no one had anticipated.

Looking backward, it’s easy to point to that event and say, That’s why they succeeded.

Sometimes luck really did matter. But there was usually another part of the story. For years before the opportunity appeared, they had been learning their business, developing products, building relationships, hiring people, acquiring equipment, surviving mistakes and figuring out what worked.

When the opportunity finally arrived, they were capable of doing something with it.

I wonder whether postwar America was something like that.

America certainly emerged from World War II holding some extraordinarily good cards. Much of the industrial capacity of Europe and Japan had been devastated by war, while the continental United States had escaped that physical destruction. American industrial capacity had expanded enormously during wartime production. Consumers had accumulated savings and pent-up demand after years of Depression followed by wartime rationing. Millions of households were being formed. Technologies developed before and during the war were finding civilian uses. Reconstruction abroad created new demand, and the United States occupied an extraordinarily powerful position in the emerging global economy.

Those advantages mattered enormously.

But America didn’t arrive at that moment as a blank slate.

The capacity had been building for years

Some of what made postwar growth possible had been accumulating long before the war ended.

The country had transportation, electrical and communications networks built over generations. Depression-era investment had added roads, bridges, dams, public buildings and rural electrification. Banking reform had made the financial system more stable. Social Security and unemployment insurance had begun creating shock absorbers for households, while new securities laws changed the rules under which financial markets operated.

Then wartime mobilization dramatically expanded American industrial capacity. Factories were built and converted, production methods improved, scientific and technological knowledge accumulated, and millions of people acquired skills through military service and wartime industry.

America had spent years building capacity. But here’s something I hadn’t fully appreciated until I began looking at the numbers:

It didn’t stop building when prosperity arrived.

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America kept investing

During the 1960s, federal investment averaged nearly 6 percent of GDP and represented more than 30 percent of federal spending. That definition includes defense investment as well as physical infrastructure, education and training, and research and development, so we shouldn’t picture all of that money going into highways and schools. But the scale is still striking.

The Interstate Highway System was being constructed. Investment continued in other infrastructure and education. Federal research and development spending approached 2 percent of GDP at its peak in 1964, and during much of the 1960s the federal government funded more than 60 percent of all research and development performed in the United States.

Much of that was driven by defense and the space race, but those investments also expanded American capabilities in aerospace, electronics, computing, materials, communications and other fields.

Private businesses were investing too, with private nonresidential fixed investment generally representing roughly 10 to 12 percent of GDP during the period.

And investment was happening in people. In 1950, only about 34 percent of Americans age 25 and older had completed high school. By 1970, the share was about 52 percent. Millions of veterans used GI Bill benefits for education and training. Colleges and universities expanded, and the National Defense Education Act increased federal support for education in science, mathematics and other fields.

So perhaps the story isn’t simply that America built capacity and then enjoyed the benefits. It kept adding physical capital, human capital, scientific knowledge and infrastructure while the economy was growing.

That begins to look less like a one-time boost and more like a reinforcing process.

The workforce was expanding too

Growth requires more than factories and technology. It requires people capable of putting them to use.

Millions of servicemen returned to civilian economic life after the war. Educational attainment rose. The population was growing. And another enormous change was underway: in 1948, only about 35 percent of prime-age women participated in the labor force. By 1973, the share had risen above 50 percent.

The economy wasn’t simply adding workers. Workers were becoming better educated, businesses were giving them better equipment, technology was allowing them to produce more, and infrastructure was making businesses and workers more efficient. Several different sources of productive capacity were expanding simultaneously.

That helps explain how America could produce more.

But it doesn’t necessarily explain why so much of that increased prosperity reached ordinary households.

How did growth reach ordinary households?

Producing more doesn’t automatically mean that ordinary households receive a proportionate share of the gains. One of the striking features of the postwar period is that productivity rose substantially while worker and household prosperity broadly rose with it.

There probably wasn’t one mechanism responsible.

Strong demand for labor was part of it. Unemployment wasn’t continuously low, and recessions occurred throughout the period, but there were extended stretches of tight labor markets. When businesses are competing for workers, workers generally have more leverage to demand higher wages.

That leverage was reinforced by labor institutions. American unions were near the height of their strength during the middle of the twentieth century. Research examining workers around 1950 finds that union wage gains were particularly strong toward the bottom of the wage distribution and among less-educated and Black workers, and that unions substantially narrowed wage inequality in urban labor markets.

Federal policy also established a floor beneath wages and working conditions. The federal minimum wage was increased repeatedly during these years and its coverage expanded. Social Security and unemployment insurance provided some protection when income from work disappeared, while later expansions of the social safety net added other forms of household support.

Education mattered from another direction. As Americans became better educated, more workers could qualify for higher-productivity and better-paying work. Meanwhile, the rapid increase in women’s paid employment meant that a growing number of households had access to additional earned income.

Housing policy helped some of those earnings become wealth. Federally supported mortgage finance, the GI Bill and a rapidly expanding housing stock helped millions of families become homeowners, although access to those opportunities was far from equal.

None of these mechanisms by itself explains the broader pattern. Taken together, however, they suggest that the postwar economy had multiple channels through which rising productive capacity could become rising worker and household prosperity: strong demand for workers, bargaining power, rising skills, expanding employment, social insurance and access to asset ownership.

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And household prosperity helped reinforce growth

The relationship didn’t necessarily stop once income reached households.

Rising wages and employment gave families more money to spend on houses, automobiles, appliances, food, clothing and services. That spending became revenue for businesses, creating reasons to expand production, invest and hire.

At the same time, public and private investment continued adding productive capacity. Better infrastructure, education, research, technology and business investment helped workers produce more. Higher productivity made rising living standards easier to sustain.

Parts of the system could therefore reinforce one another:

Investment and knowledge increased productive capacity. Greater productivity supported higher incomes. Higher incomes supported demand. Demand encouraged investment and hiring. Strong employment supported household incomes and bargaining power.

Social insurance helped stabilize that process when people encountered unemployment, disability or old age.

It wasn’t a perfectly balanced machine, and we shouldn’t assume every connection was equally important. But it helps explain why looking for a single cause of postwar prosperity may miss what was distinctive about the period. Several parts of the socio-economic system were operating together.

Where did taxes fit?

The federal revenue system supporting this economy looked very different from the one we have today.

Top statutory individual income-tax rates exceeded 90 percent for much of the 1950s and early 1960s. But that figure is easy to misunderstand. It was a marginal rate applied only to taxable income above a very high threshold, after deductions and other provisions of the tax code. A wealthy household did not simply hand more than 90 percent of all its income to the federal government.

Corporate income taxes also supplied a substantially larger share of federal revenue than they do today. The tax code treated ordinary income, corporate profits and capital gains differently and included provisions such as accelerated depreciation and, beginning in 1962, an investment tax credit intended to encourage business investment.

Those high tax rates didn’t cause postwar prosperity. But the revenue system did something important within the larger system we’ve been examining: it gave the federal government substantial capacity to keep investing while the economy grew.

That revenue helped support defense and the space program, highways and other infrastructure, scientific research, education, Social Security and an expanding set of public programs.

That brings taxation back into the feedback loop. A growing economy generated income and profits. The revenue system captured a portion of them. Some of that revenue financed infrastructure, research, education and other forms of productive capacity, which could in turn contribute to future productivity and growth.

Taxation undoubtedly affected private economic decisions as well, but those effects are much harder to isolate. The clearer point for our purposes is that the government had a revenue system capable of supporting substantial continuing investment while the private economy was expanding too.

That was another part of the system.

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Shared didn’t mean everyone

“Shared growth” describes an important economic pattern, but averages can hide who was excluded from it.

Black Americans and other minorities continued to face discrimination in employment, lending, housing and education. Redlining and discriminatory implementation of housing programs helped some families accumulate wealth while preventing others from accessing the same opportunities. Benefits available under the GI Bill were not always equally accessible in practice. Women were entering paid employment in growing numbers while still encountering substantial legal, professional and cultural barriers.

Those failures don’t erase the extraordinary gains we’ve been examining. They reveal something else about systems: a system can work remarkably well by some measures while failing badly by others.

That distinction matters if we’re trying to learn from history rather than romanticize it. We can ask what worked, how it worked, who benefited, who didn’t, and why.

Maybe there wasn’t one secret

The more I look at this period, the less satisfying single-cause explanations become.

America entered the postwar period with accumulated physical, institutional and human capacity. It encountered unusually favorable circumstances, and it continued investing as the economy expanded. At the same time, a collection of institutions and economic conditions helped translate rising productive capacity into rising household prosperity.

Those pieces could reinforce one another.

That doesn’t mean every element was necessary, that each contributed equally, or that recreating them today would recreate the same results. The United States also benefited from an extraordinary global position that cannot be separated from the story.

But perhaps the most interesting possibility is that several favorable conditions reinforced one another for an unusually long period of time.

That’s a systems explanation rather than a policy prescription.

And it gives us something much more useful to investigate.

Then something changed

The period I’ve been describing didn’t continue indefinitely.

Around the early 1970s, some of these relationships began to change. Productivity growth slowed. Over time, worker compensation and productivity increasingly diverged. The international monetary system built around fixed exchange rates and the dollar’s convertibility into gold came apart between 1971 and 1973. Energy shocks hit. International competition intensified. Union strength began a long decline. Technology, taxation and the structure of American business continued changing.

It would be a mistake to pick one of those changes and declare it the cause.

If the prosperity of 1948 to 1973 emerged from a collection of conditions that reinforced one another, the more interesting question is what happened to those conditions.

Which remained? Which weakened or disappeared? What replaced them? And what new forces entered the system?

That’s where I want to go next.

Because the purpose of looking back isn’t to recreate 1955. It’s to understand something more useful:

What conditions help a society turn its productive capacity into broadly shared prosperity?

And once we understand that better, we can begin asking which of those conditions might be at play for the very different America we live in today.

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How do we know when a socio-economic system is working? Or not working?

“Socio-economic system” sounds like an academic term, but I mean something fairly simple: the interconnected institutions, markets, rules and public systems that shape our economic lives. Banks are part of it. Businesses and workers are part of it. So are financial markets, taxes, Social Security, healthcare, education, housing, government and the laws that establish the rules under which all of these operate.

And, of course, people are at the center of it.

The United States today is an extraordinarily wealthy and productive country. But when we look at the socio-economic system, there are warning lights flashing.

Housing has become difficult to afford for many families. Healthcare and childcare can consume significant portions of household income. Retirement security remains a concern for millions of Americans. Workers have become enormously more productive over the past several decades, but those gains haven’t always translated into comparable improvements in compensation. The federal government routinely spends substantially more than it collects.

There is another kind of warning sign that’s harder to find in an economic table: trust.

In a 2024 Pew Research Center survey, 74 percent of Americans said the U.S. economic system unfairly favors powerful interests. That view crossed political lines: 85 percent of Biden supporters and 62 percent of Trump supporters agreed. In September 2025, only 17 percent of Americans said they trusted the federal government to do what is right always or most of the time. When the question was first asked in 1958, the number was 73 percent.

Those numbers don’t prove that our socio-economic system is broken. But they’re signals worth paying attention to.

A healthy system isn’t only about GDP. It needs to produce material outcomes, but it also needs a sufficient degree of legitimacy. People need some reason to believe that the institutions surrounding them are trustworthy, that the rules are reasonably fair, that effort can improve their circumstances, and that the system is capable of responding when something clearly isn’t working.

So perhaps the question isn’t whether our system has crossed some threshold at which we can officially declare it broken. Maybe the better question is whether we really need to wait for catastrophic failure before we’re willing to examine the parts that aren’t working well.

America has confronted an extreme version of system failure before. What lessons can we learn?

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When the system really did break

It’s difficult from our vantage point to comprehend the scale of what happened after 1929. U.S. economic output fell by roughly 30 percent. Unemployment reached approximately 25 percent by 1933. Prices fell sharply, the money supply contracted dramatically, and approximately 9,000 banks suspended operations between 1930 and 1933.

Behind those numbers were millions of individual lives. People lost jobs, businesses, farms and savings. It was an incredibly difficult time.

There were many points of failure. But what interests me here is how those failures interacted.

Banks failed and depositors became frightened. Credit contracted, making it harder for businesses to borrow. Businesses failed and workers lost jobs. People without income spent less, putting additional pressure on businesses. Falling prices increased the real burden of existing debt. One failing part of the system put pressure on another.

Confidence mattered too. If you believed your bank might fail tomorrow, withdrawing your money today was perfectly rational. But if enough depositors made the same rational decision at the same time, they could help produce the bank failure they feared.

The situation was so dire something had to be done, and small adjustments around the edges weren’t going to be enough. The country faced failures involving banking, employment, household security, financial markets and productive activity simultaneously.

Action was required. Solutions were needed. And some of those solutions would have to be big.

The people confronting those problems didn’t have a repair manual. They had competing theories, political constraints and incomplete information. They tried things, made mistakes and adjusted.

They experimented.

We often remember what followed as an alphabet soup of programs and agencies: FDIC, SEC, WPA, CCC, TVA and many others. But perhaps there’s a more useful way to understand what was happening. Instead of starting with the programs, start with the problems they were intended to solve.

Goal: Make it safe to trust a bank with your money

A bank account seems remarkably ordinary today. During the Depression, depositing money in a bank could mean accepting the possibility that if the bank failed, your savings might disappear with it.

That created a systemic problem. If depositors became worried about a bank, withdrawing their money made sense. But that often led to bank runs and subsequent failures.

The response included major banking reforms and, in 1933, creation of the Federal Deposit Insurance Corporation. The goal was straightforward: people needed to be able to trust that money deposited in a bank would still be there.

Deposit insurance wasn’t simply a benefit for individual depositors. Confidence itself was part of the infrastructure necessary for a functioning banking system.

Goal: Keep an economic shock from becoming a household catastrophe

Losing a job creates an obvious problem for the person who loses it, but the consequences don’t end there. A worker without a paycheck cuts spending. The grocery store, landlord and other businesses receive less income. Multiply that across millions of households and falling purchasing power can contribute to still more unemployment.

The Social Security Act of 1935 established the federal-state unemployment insurance system. Its immediate purpose was to provide some temporary economic security to workers who lost their jobs, but maintaining household income during a downturn could also help keep millions of individual crises from adding as much force to the larger economic contraction.

This is one of the things that makes socio-economic systems interesting. A policy created to help individuals can also affect the way the larger economy behaves.

Goal: Create greater security after a lifetime of work

For many Americans, becoming too old to work could mean severe economic insecurity. Social Security created a national system of old-age benefits financed through payroll taxes.

Its goal reflected a judgment about what kind of society Americans wanted to build: people should have some basic degree of economic security when they could no longer work. At the same time, retirement income allowed older Americans to continue participating in the economy as consumers after their wage income ended.

Social policy and economic policy weren’t always separate things. They interacted.

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Goal: Make financial markets more trustworthy

The stock-market crash didn’t single-handedly cause the Great Depression, but the financial markets of the 1920s had exposed serious problems involving disclosure, manipulation, conflicts of interest and speculation.

Congress responded with the Securities Act of 1933 and Securities Exchange Act of 1934, which created the Securities and Exchange Commission. The goal wasn’t to eliminate financial markets. It was to establish rules under which they could function more reliably and investors could participate with greater confidence.

We sometimes talk about regulation as though it exists outside a market and interferes with it. But markets themselves depend on rules: property rights, contracts, accounting standards and disclosure requirements among them. Some rules constrain markets, but others help create the trust that allows them to function.

Goal: Give workers greater ability to participate

The Depression also exposed an enormous imbalance between workers desperate for employment and employers deciding whom to hire and what to pay. An individual worker frequently possessed very little negotiating leverage.

The National Labor Relations Act of 1935 changed the rules surrounding collective bargaining, establishing federal protections for workers seeking to organize. The mechanism was collective bargaining; the larger goal was to give workers greater ability to negotiate over their wages, working conditions and place within the economic system.

Organized labor would grow substantially in the years that followed. We’ll come back to why that might matter.

Goal: Put idle people and resources to productive use

One of the strange features of a severe depression is that enormous unmet needs can coexist with enormous idle capacity. Roads needed building. Schools needed improving. Communities needed water systems. Much of rural America still lacked electricity. At the same time, millions of people desperately wanted work.

Programs including the Works Progress Administration, Public Works Administration, Civilian Conservation Corps, Tennessee Valley Authority and rural electrification efforts attempted, in different ways, to connect those conditions.

The immediate effect was employment and income, but that wasn’t necessarily the only result. A paycheck was spent and eventually gone. A road, bridge, school, dam or electrical system could remain, sometimes contributing to productive capacity for decades afterward.

That distinction between spending and investment will become important later in our story.

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Goal: Build the capacity to pay for a government doing different things

All of these new responsibilities raised another question: how would government pay for them?

The answer evolved through the Depression and then changed dramatically again during World War II.

In 1940, total federal receipts were only about 6.7 percent of GDP. Individual income taxes produced about 0.9 percent of GDP, while corporate income taxes produced about 1.2 percent.

By 1944, federal receipts had risen to roughly 21 percent of GDP. Individual income taxes accounted for about 9.5 percent, while corporate income taxes accounted for about 7.2 percent.

The revenue system had been transformed.

Part of that story is the famous increase in tax rates on the highest incomes. By the middle of World War II, the top statutory marginal income-tax rate exceeded 90 percent. But that number is frequently misunderstood. It doesn’t mean wealthy Americans handed over 90 percent of everything they earned. It was a marginal rate applied only to taxable income above a very high threshold, while deductions and other provisions meant effective rates were considerably different.

The broader transformation may be more interesting. The federal income tax went from affecting a relatively limited portion of Americans to becoming a mass tax. The number of individual income-tax returns rose from roughly 14.7 million in 1940 to nearly 50 million in 1945, and modern wage withholding arrived during the war.

In a remarkably short period, the United States had built a revenue system capable of financing a federal government operating at a scale that would have been difficult to imagine a generation earlier.

Naturally, that raises another question: what does the federal revenue system look like today?

In 2025, total federal receipts were about 17 percent of GDP. Individual income taxes accounted for roughly 8.7 percent of GDP, surprisingly close to their 9.5 percent share in 1944. Corporate income taxes, however, were only about 1.5 percent of GDP, compared with roughly 7.2 percent in 1944. Today’s system also relies much more heavily on payroll taxes supporting Social Security and Medicare.

That comparison doesn’t tell us what the tax system should look like. But it does tell us something important.

Revenue systems change.

The federal government hasn’t always gotten its money from the places it gets its money today. As the economy changed, government responsibilities changed and Americans made different choices, the revenue system evolved too.

So, what worked?

The good news is that America slowly but steadily pulled itself out of that extraordinarily difficult period. So we should want to learn from the experience. What worked? What didn’t? And perhaps most intriguingly, did some of these changes help create the conditions for the remarkable period of prosperity that followed?

Those are much harder questions.

It would be convenient if we could isolate each change, adjust it while holding everything else constant, and measure what happened. Real societies don’t give us that opportunity.

Tax policy interacted with monetary policy, banking reform, labor institutions, social insurance, infrastructure, private investment, technology, demographics and international trade. World War II transformed American industrial capacity and employment, while America’s position in the world economy changed dramatically. Even the recovery itself wasn’t one continuous upward march; the United States experienced another severe recession in 1937–38.

So we need to be careful about drawing straight lines from particular policies to particular national outcomes.

But there’s an equally serious mistake we could make: deciding that because the system is complicated, none of these policies can meaningfully be connected to the outcomes.

Taxes affect incentives and government capacity. Infrastructure affects productive capacity. Banking rules affect credit and confidence. Labor institutions affect bargaining relationships. Social insurance affects household security and purchasing power. Trade policy affects consumers, producers and trading partners.

These things matter precisely because they’re parts of a larger system, even when isolating their individual contributions is difficult.

Perhaps the right standard isn’t certainty, but evidence. What changed? What happened afterward? What mechanisms could connect the two? What does the research tell us? What else was happening at the same time? Do other periods or countries give us additional evidence?

Complexity should make us more careful about causation. It shouldn’t make us give up on understanding.

That’s important when studying policies enacted ninety years ago, and it’s equally important when evaluating proposals today.

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Experimentation also means getting things wrong

The people responding to the Depression weren’t omniscient. Some policies failed, some produced unintended consequences, and some were abandoned or revised.

The Smoot-Hawley tariffs, enacted in 1930 in an effort to protect American producers, contributed to declining international trade and retaliation from trading partners, although they were only one part of a much larger global economic collapse.

Other shortcomings became clearer over time. Early Social Security and labor protections excluded categories of workers in which Black Americans were disproportionately represented. Federal housing policies eventually helped millions of American families accumulate wealth while discriminatory housing and lending practices denied many Black families access to the same opportunities.

Economists still debate how much various New Deal policies contributed to the recovery. We don’t need that debate to have a simple answer for the history to be useful.

The lesson isn’t that policymakers in the 1930s figured out how to build the perfect socio-economic system. They clearly didn’t. The more useful lesson is that they identified problems, decided what outcomes they wanted, tried substantial changes and learned from the results.

That’s what experimentation means.

These weren’t separate systems

Banking affected credit, which affected investment and employment. Employment affected household income and demand. Social insurance affected security and resilience. Labor institutions affected bargaining relationships. Infrastructure affected productive capacity. Taxation affected incentives and government’s ability to act. Rules affected trust, and trust affected people’s willingness to participate.

We separate these subjects because it makes them easier to study.

The system itself doesn’t separate them.

The outcomes emerge from their interaction.

And then?

By the time America emerged from World War II, it had inherited a very different socio-economic architecture from the country that entered the Depression: deposit insurance, Social Security, unemployment insurance, regulated securities markets, stronger organized labor, new infrastructure, enormously expanded industrial capacity and a dramatically different federal revenue system.

Then came one of the most remarkable periods of broadly shared economic growth in American history.

What conditions were in place when that happened, and how did they work together?

We’ll explore that next.

We don’t have to wait for the system to break

There’s a danger in using the Great Depression as our example. It can make systemic change seem like something reserved for emergencies, when perhaps the more useful lesson is the opposite.

By the time unemployment reaches 25 percent, output has collapsed by 30 percent and thousands of banks have failed, you’ve waited far too long to start asking whether something isn’t working.

Today we have vastly more economic data, decades of research, better measurement and the ability to observe troubling trends before they become catastrophic. If housing becomes increasingly difficult for working families to afford, we can investigate why. If productivity grows without producing the improvements in living standards we would expect, we can investigate why. If people increasingly believe the economic rules favor powerful interests, or lose confidence in the institutions responsible for addressing common problems, we can pay attention to what those signals might be telling us. If government repeatedly spends substantially more than it collects, we can examine the systems producing that imbalance.

None of those observations automatically tells us what policy to adopt.

They tell us where to look.

And perhaps there’s something else we can borrow from the way Americans responded to the Depression: start with the goal.

What outcome are we getting? What outcome do we want? What parts of the system are contributing to the difference? What changes might improve it? And then, importantly, did the change actually work?

Because changing a system isn’t the goal. Making it work better is.

The problems we face aren’t the problems Americans faced in 1933. Our economy, society, technology and institutions are profoundly different. We don’t need to recreate their solutions.

But neither do we need to wait for another catastrophic failure before we’re willing to improve our own system.

When something isn’t producing the outcomes we need, we should pay attention, ask why, and begin exploring what might work better.

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A few weeks ago, I wrote that due diligence has a way of pulling on threads. You start with an assumption that seems reasonably solid. Then you look underneath it, ask a few more questions, and discover that the answer is more complicated than you thought.

We’ve been doing a lot of that lately with the Financial Settlement Tax.

Our current research is taking us market by market, and sometimes segment by segment within those markets. We’re looking more carefully at what the enormous numbers reported for equities, Treasuries, repo, foreign exchange, futures, options, swaps and other financial activity actually represent.

And we’re learning something important.

A number tells us how much. Before we know what that means, we need to know: how much of what?

There can be several perfectly legitimate “big numbers” describing the same financial market, and they may be measuring very different things. Gross transaction volume, notional value, outstanding exposure, settlement obligations and cash funding may all be related, but they describe different points in a transaction journey or different ways of measuring value and exposure.

A derivative’s notional value, for example, generally describes the reference amount used to calculate contractual payments. It is not necessarily an amount of money that changes hands.

Those distinctions matter enormously when we’re trying to determine what should be subject to a levy and how much of a levy that activity can reasonably tolerate.

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The $100 bill that became $100,000

Here’s a deliberately simple example.

Imagine a machine that gives you one penny every time you feed it a $100 bill. You get the $100 bill right back, so you feed it through again.

Do it once and you make a penny. Automate the process and do it 1,000 times, and you’ve made $10. But someone measuring the gross transaction activity sees something very different:

$100 × 1,000 transactions = $100,000 of activity.

There was never $100,000 of capital involved. There was one $100 bill turning over again and again.

Now suppose we impose a transaction tax of one basis point, or 0.01%. That’s one cent on each $100 transaction, so our penny of profit disappears. If earning that penny was the entire purpose of the transaction, there is no longer any reason to keep feeding the machine.

Measured transaction volume falls by $100,000, but only $100 of capital stops moving through the machine.

What should we make of that?

If those transactions were purely speculative and contributed little to supporting the Real Economy or helping financial markets function smoothly, perhaps we wouldn’t be particularly concerned if they disappeared.

But real markets aren’t that easy to categorize. Some activities that are important to healthy markets also operate on extremely small margins and enormous turnover. Market makers, for example, stand ready to buy and sell securities, providing liquidity that allows other investors to transact more efficiently. Their economics can depend on earning very small amounts across very large numbers of transactions.

So a large decline in transaction volume isn’t automatically good or bad. We need to understand what activity is disappearing and what economic function it was performing.

That’s a distinction worth understanding before we decide how much tax a particular kind of activity can bear.

Thirty days of financing, two very different transaction totals

Repo gives us a more realistic version of the same issue.

Imagine an institution needs $1 million of short-term financing for 30 days. It might arrange to borrow $1 million for a 30-day term. Or it might obtain $1 million through an overnight repo and continue renewing that financing each day.

Those arrangements aren’t identical. Overnight repo offers greater day-to-day flexibility and is repeatedly renewed and repriced. But both can serve a broadly similar underlying purpose: providing approximately $1 million of financing over the month.

The way we count the activity, however, looks very different.

The 30-day loan begins with one $1 million financing transaction. With the overnight repo, each daily renewal is a separate transaction. If $1 million of financing is renewed every day for 30 days, that creates roughly $30 million of gross transaction volume, even though approximately $1 million is being financed at any one time.

All 30 transactions are real. But $30 million of transaction volume does not mean $30 million of distinct capital was financed.

And in this case, we know the underlying function matters. Repo markets provide important short-term financing and liquidity throughout the financial system.

For the FST, then, the question becomes: How much of that recurring transaction flow can reasonably support a levy without causing serious damage to the financing function underneath it?

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Activity can multiply another way too

Turnover through time isn’t the only reason financial-market numbers can become enormous.

One underlying economic objective can sometimes generate a series of related transactions as it moves through the financial system. An investor transacts with a dealer. The dealer may hedge that position with another party. Another intermediary may transfer or offset some of the resulting exposure elsewhere.

These are all bona fide transactions, and the fact that they are related doesn’t necessarily mean they shouldn’t each pay the FST. It means we need to understand what each transaction is doing and whether taxing every step creates an appropriate levy on distinct transactions or an unintended cumulative burden on one underlying economic activity.

This also forces us to look more carefully at one of our original FST design principles: the one-touch rule.

The idea sounds simple. A transaction should be taxed once rather than repeatedly as the same transaction moves through clearing and settlement.

But once we get down into the machinery, we have to define what “once” means.

If an investor makes a trade and the dealer then enters another bona fide trade to hedge the resulting risk, those may well be two separate taxable transactions. But what about additional activity created as trades are cleared, settled, financed or intermediated? At what point are we taxing new economic activity, and at what point are we touching the same underlying activity again?

That’s one of the questions our research now needs to answer more precisely.

Variations of these issues appear in futures, foreign exchange, derivatives and other markets. The details differ enough that we’re increasingly reluctant to treat all of this activity as economically interchangeable. That’s why we’re examining the potential FST base market by market and, where necessary, segment by segment.

Which big number do we actually want?

This question has become much more important as we’ve gone deeper.

A market can have enormous gross transaction volume, an enormous notional value, a much smaller amount of exposure outstanding at any particular moment, and yet another number representing the cash or funding actually changing hands.

Each measurement can tell us something useful. The challenge is figuring out which one, or which combination, is relevant to the tax we are trying to design.

And there’s another principle we need to keep in mind. Our goal is not necessarily to design a tax that causes no change whatsoever in financial markets. That isn’t a realistic standard for any meaningful tax. Some activity may decline. Prices and strategies may adjust. Participants will respond to new costs.

What we want to avoid is serious damage to important market functions or the broader economy, while raising as much sustainable revenue as we reasonably can.

That makes the composition of the base as important as its headline size.

Some of the activity we’re measuring represents the same capital or exposure turning over repeatedly. Some reflect a series of related trades used to establish, finance, hedge or manage a desired position. Some operate on margins so thin that even a tiny levy can materially change its economics. And some high-turnover activity performs functions we very much want to preserve.

Understanding those differences may lead us toward different rates for different activities, different definitions of the taxable event, or different treatment of particular market segments. It may also reveal possibilities we haven’t considered yet.

That’s why we’re doing the research before locking down the design.

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Transaction volume is not economic value

One of the more consequential lessons from this due-diligence journey may ultimately be a fairly simple distinction.

If a $100 transaction happens 1,000 times, then $100,000 of gross transaction activity occurred. If $1 million of overnight financing is renewed 30 times, there really were 30 financing transactions. And if one investment decision produces a series of trades as dealers and other intermediaries manage the resulting exposure, those trades are real too.

But those numbers are telling us different things about the underlying economic activity.

Transaction volume isn’t the same thing as capital. A derivative’s notional value isn’t necessarily the amount of cash at risk or changing hands. And a chain of related trades can generate several legitimate transactions while ultimately supporting one underlying investment, hedge or financing objective.

That feels strangely familiar.

We’ve spent a lot of time in this project talking about the distinction between money and wealth. They’re related, but they measure different things. Money can help us measure and exchange wealth, but it isn’t wealth itself. Understanding that distinction changes how we think about what an economy actually has available to it.

We’re discovering a similar distinction in financial markets:

Transaction volume is not economic value.

A very large transaction number tells us that a great deal of activity occurred. But before we can decide what that number means for the FST, we need to distinguish what kind of activity it represents. Understanding that doesn’t automatically tell us which transactions should be taxed. It provides information to make that decision.

This is what the exploration is for

I’ll admit that some of this research has been uncomfortable.

When you begin with a hypothesis, it’s easy to become attached to the assumptions underneath it. You build calculations on those assumptions and other conclusions on top of the calculations. Change something near the bottom, and the effects can travel a long way downstream.

That’s exactly why those assumptions need to be tested.

A deeper understanding may narrow some possibilities while revealing others. Something we learn about a particular market may tell us that it can’t reasonably support the levy we initially considered. The same investigation might point toward a different rate, a different taxable event, a particular segment that behaves differently, or another approach we haven’t considered yet.

Our preliminary due-diligence work is increasingly pushing us toward a market-by-market process: understand the activity, determine whether further segmentation is needed, identify the economically meaningful taxable event, examine margins and turnover, model behavioral responses, protect important market functions, and then estimate the sustainable revenue that remains.

It’s demanding work, but that is what due diligence is supposed to do. It’s how we develop a proposal that can survive a much closer look.

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Keep in mind the underlying goal

The Financial Settlement Tax is one possible mechanism for accomplishing something much larger.

The underlying goal is to explore whether America can update a revenue system built for an earlier economy, shift some of the burden away from work and ordinary economic activity, and create greater fiscal capacity to meet our obligations and make choices about the country’s future.

That’s the destination we’re trying to reach.

Right now, we’re learning considerably more about this possible route. The terrain is more complicated than it first appeared, but the exploration is giving us a much better map.

And that matters even beyond the FST. Understanding why one route is difficult can help us improve it, find a better route, or see possibilities that weren’t visible from where we started.

For now, we keep investigating, following the evidence and returning to the question that has guided this phase of the project:

What will work well?

That remains the goal.

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For the past few weeks, we’ve been pulling apart some of the assumptions behind the Financial Settlement Tax and looking at them much more carefully.

That work is continuing, and we are now pursuing two related research tracks at the same time.

The first is a deeper, bottom-up examination of the potential FST base. We’re looking separately at equities, Treasuries, repo, foreign exchange, futures, options, swaps and other financial activity. For each market, we want to understand what the transactions actually represent, why they occur, who participates, how frequently they turn over, what margins exist, what substitutes are available, and how the activity clears and settles.

We also need to determine whether each category is sufficiently homogeneous to analyze as a single market, or whether it needs to be segmented further.

“Derivatives,” for example, is an enormous category encompassing instruments with very different purposes, economics and cash flows. Even within equities or fixed income, different participants and types of transactions may respond very differently to the same levy.

So understanding the size of a market is only the beginning. We also need to understand exactly what is inside the category we’re measuring and how its different components behave.

From there, we can begin estimating what level of levy each type of activity might tolerate while preserving important market functions and generating substantial, sustainable revenue.

This is a significant research project, and we’re in the middle of it. Our preliminary due-diligence report identifies decomposing the potential FST base and building market-specific behavioral models as two of the highest-priority areas for further work.

At the same time, we can learn from something else: history.

Transaction taxes aren’t new. Countries have tried many different versions, at different rates, on different financial instruments, in different market structures and at very different moments in history.

So while we work from the bottom up, we can also look backward and ask:

What actually happened when other people tried this?

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History isn’t going to give us “the answer”

There is no single historical experience with a financial transaction tax.

The United Kingdom is different from Sweden. Futures aren’t stocks. A tiny tax on high-turnover financial activity isn’t the same as a much larger tax on long-term share purchases. A tax with readily available untaxed substitutes will behave differently from one with a broader perimeter, and a market that can easily move across a national border presents different challenges from one tied more closely to domestic infrastructure.

The American financial system of 2026 is also very different from the American financial system of 1917.

No historical example can tell us whether our particular tax design will work or fail.

What these experiences can give us are data points. Taken together, they may reveal patterns that point toward better design.

What kinds of financial activity proved especially sensitive to small increases in transaction costs? What happened when rates became too high? What happened when participants had easy substitutes? Did underlying investment disappear, or did people simply trade less frequently? Did liquidity deteriorate? How did markets adapt over time?

And perhaps most important for our purposes, what can those experiences teach us about designing the FST well?

The evidence we’ve reviewed suggests that market responses vary substantially depending on tax rates, economic margins, turnover, available substitutes, market structure, geographic mobility and time to adapt.

With that in mind, let’s take a short trip through history.

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Sweden: Sometimes the activity finds another road

Sweden is probably the most frequently cited cautionary tale about financial transaction taxes, and for good reason.

Beginning in the 1980s, Sweden imposed taxes on equity transactions and later expanded taxation into fixed-income markets. Its equity tax eventually became quite large relative to ordinary transaction costs, and substantial trading migrated to London.

For our purposes, however, the fixed-income experience may be even more interesting.

Some of those tax rates were actually quite small, roughly 0.2 to 3 basis points, depending on the instrument. Yet activity in some taxed bond markets declined dramatically.

One important reason appears to have been the availability of substitutes. Investors who still wanted similar financial exposure could sometimes obtain it through instruments that were taxed less heavily or not taxed at all.

Think of it as a toll road. If Route A suddenly charges a toll while Route B gets you to essentially the same place for free, even a relatively small toll may change which road people take.

Sweden therefore teaches us to pay close attention to the escape routes. What sits outside the tax base may sometimes matter almost as much as the rate imposed inside it.

America tried this too

One of the more surprising things I learned during this research is that the United States once had its own federal futures transaction tax.

It lasted from 1917 until 1938, with rates that were roughly equivalent to 1 to 5 basis points, or 0.01% to 0.05%, depending on the period.

As I discussed in the last post, modern research reconstructing that period found that higher transaction costs were associated with lower trading volume. But there wasn’t a comparable decline in open interest, a measure of the underlying positions market participants continued to hold, nor was there a significant change in volatility.

That suggests some transaction volume can disappear without underlying economic positions disappearing by the same amount.

There was another interesting response. When the tax increased substantially in 1932, the market adapted aspects of its trading structure to the higher transaction cost.

That is a useful reminder of something we explored in the last post: markets don’t respond only by trading more or less. They change strategies, structures and sometimes the way transactions themselves are organized.

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Taiwan: Is there a Goldilocks rate?

Taiwan gives us something close to the reverse experiment.

Researchers have been able to study what happened when Taiwan reduced its futures transaction tax. The rate fell from 5 basis points to 2.5 basis points and was eventually reduced further.

Trading volume increased and spreads narrowed, while volatility did not clearly decline. Interestingly, tax revenue initially fell by less than the rate reduction alone might have suggested because the taxable base expanded as trading responded to the lower cost.

That illustrates an important relationship between the tax rate and the tax base.

Raise the rate and the government collects more on each transaction that remains, but some activity may disappear or move. Lower the rate and the government collects less on each transaction, but more activity may remain inside the base.

Somewhere along that curve may be a rate that produces substantial sustainable revenue without materially damaging useful market functions.

We’ve been calling that the Goldilocks rate.

Taiwan offers another clue as well. It uses dramatically different rates for different types of futures. That supports one of the possibilities we’re now examining in our market-by-market work: different financial activities may warrant different FST rates.

France and Italy: Revenue isn’t the only thing we have to watch

France introduced a modern equity transaction tax in 2012. Trading activity declined, but studies of its effects on liquidity and volatility have produced mixed results. There is also evidence that some effects changed over time as market participants adapted.

Italy’s experience gives us additional reason for caution. Several studies of its 2013 transaction tax found evidence of wider spreads or deteriorating liquidity, although the period was complicated by banking-sector stress and other economic conditions that make clean cause-and-effect conclusions difficult.

Together, these experiences reinforce why revenue cannot be our only measure of success.

Our objective is to raise substantial, sustainable revenue while preserving the important economic functions financial markets provide. So our models eventually need to monitor market health alongside revenue: liquidity, spreads, market depth, financing costs, hedging and price discovery.

We also need to distinguish the initial response from what happens after participants have had time to adapt. Historical evidence suggests those may not be the same.

The United Kingdom: What you tax and where you collect it aren’t necessarily the same thing

The United Kingdom offers a very different example.

It has maintained a tax of 0.5% on many purchases of UK shares, and London has continued to operate as one of the world’s major financial centers. That doesn’t mean the tax has no behavioral effects. Exemptions and alternative instruments matter, and investors have ways to obtain some economic exposures without paying the tax.

But another aspect of the UK system has become particularly interesting to us.

For many electronic share transactions, the legal tax attaches to the agreement to transfer the security, while the CREST settlement system helps collect it.

The thing you tax and the infrastructure you use to collect the tax do not necessarily have to be the same thing.

That distinction could become important as we continue refining the FST. We’re examining exactly where the tax should attach and whether modern clearing and settlement systems can provide efficient collection infrastructure even if the taxable event is ultimately defined elsewhere.

It’s a good example of how deeper due diligence can refine the architecture of the proposal without changing its underlying objective.

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Hong Kong and China: Human behavior doesn’t always fit neatly on a line

Hong Kong increased its stock stamp duty from 0.10% to 0.13% per side in 2021 and reduced it back to 0.10% in 2023.

Unfortunately for anyone hoping for a clean natural experiment, those years also included COVID-era disruptions, changing Chinese market conditions, global interest-rate changes and shifts in investor sentiment.

That’s one of the challenges of studying real-world policy: everything else refuses to hold still while we run the experiment.

A more targeted Hong Kong example may tell us something useful. Relief provided to some ETF market-making activity was associated with a strong relative increase in the affected trading activity, reinforcing the possibility that high-turnover, low-margin intermediation can be especially sensitive to even small transaction costs.

China adds another wrinkle. It has repeatedly raised and lowered securities transaction taxes, and the behavioral response to an increase does not appear to be simply the mirror image of the response to an equivalent decrease.

Market conditions, investor sentiment and available strategies all matter. The relationship between the tax rate and behavior may not be linear.

That is another reason to be cautious about plugging one behavioral assumption into an enormous spreadsheet and treating the result as settled.

What patterns are emerging?

When we step back from the individual examples, several patterns begin to appear.

Very small transaction taxes can produce significant behavioral changes when trading margins are tiny or turnover is extremely high. Untaxed substitutes and geographic escape routes can matter enormously. A decline in gross transaction volume doesn’t necessarily produce an equivalent decline in underlying investment or economically useful activity, but poorly calibrated transaction taxes can impair liquidity, widen spreads or affect other valuable market functions.

Markets also adapt over time, which means the long-run response may differ from the immediate one.

Perhaps most important for where our research is heading, different markets probably shouldn’t automatically be modeled with the same behavioral assumptions or taxed at the same rate.

History gives us useful clues, but it still can’t tell us with confidence that a 1-basis-point levy on U.S. Treasury activity would reduce the taxable base by X%, while a 5-basis-point levy on equities would reduce it by Y%, or that a particular rate on foreign exchange or derivatives would produce Z dollars of sustainable revenue.

Our preliminary due-diligence work is explicit about that limitation. We cannot yet infer reliable percentage declines in the major potential FST bases at 1, 5 or 10 basis points, nor can we assume that one universal FST rate is appropriate.

That’s why the market-by-market work matters.

History is giving us a method, not a magic number

We aren’t emerging from this research with a historically proven “correct” FST rate.

Instead, history is helping us build a better method.

For each potential market, we need to understand the activity and the economic function it serves, and determine whether the category is sufficiently similar to model together or needs to be segmented further. Then we can examine margins, turnover, holding periods, participants and substitutes; identify potential escape routes; model multiple rates and behavioral responses; and measure the effects on both revenue and market health.

Our research framework increasingly looks something like this:

Understand the market → define the taxable activity → identify exemptions and substitutes → test different rates → estimate behavioral response → measure market effects → estimate the surviving base → calculate sustainable revenue.

That’s considerably more sophisticated than multiplying one enormous number by 0.1%.

It’s also considerably more defensible.

The goal is to find what will work well.

Eventually, the models have to meet the real world

We can study Sweden, Taiwan, France, Italy, Britain, Hong Kong, China and our own history. We can study transaction costs and margins, build increasingly sophisticated models, and talk with people who actually participate in these markets.

We should do all of those things. But the United States in 2026 is not Sweden in 1986 or America in 1932.

At some point, models are still models.

That may be one of the strongest arguments for thinking seriously about how an FST would eventually be introduced: whether rates should be phased in, what we would measure along the way, what review gates should exist, and under what circumstances we would accelerate, pause or adjust.

Interestingly, one current U.S. proposal already contains a phased rate schedule. The 2025 Wall Street Tax Act moves through rates of 2, 4, 6, 8 and eventually 10 basis points. Our research raises the possibility of going a step further by tying movement between rates to actual evidence about revenue, volume, spreads, liquidity, migration and other market-health indicators rather than escalating automatically.

We will continue exploring and researching.

And then we’re going to widen the lens again

We’ve spent several posts down in the machinery of the FST, and we’ll stay on this due-diligence road a little longer. If we’re going to propose something this consequential, we need to take the numbers, risks, objections and unintended consequences seriously.

But the FST itself was never the whole story.

Soon we’ll turn to another big question: How does an idea like this actually move forward?

We have been developing a roadmap for that too. We’ll explore why people-powered movements have changed seemingly immovable political realities before, what makes those movements effective, and how we envision moving Unburden America from an idea into a broad public conversation that can be debated, challenged, improved and ultimately acted upon.

And then there is the other side of the ledger.

If this creates substantial new fiscal capacity, what should America do with it?

We’ve already put some possibilities on the table: payroll-tax relief for workers and employers, income-tax relief, reducing the national debt and its enormous interest burden, and strengthening Social Security and other important commitments.

There are larger possibilities worth exploring too. Could greater fiscal capacity allow us to seriously consider new approaches to healthcare, housing, childcare, education, infrastructure, research and other national priorities?

Those choices would ultimately belong to the country, and reasonable people will disagree about them. But there is real value in showing what one possible plan might look like and what it could mean for ordinary Americans.

That is ultimately why all this work down in the financial plumbing matters.

We’re trying to determine whether a different fiscal architecture could create more room for the country to make choices about its future.

But first, we need to know how to build it well.

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At first, estimating the potential revenue from a Financial Settlement Tax seems like fairly simple math.

Estimate the amount of financial activity in the tax base. Choose a tax rate. Multiply one by the other.

Taxable activity × tax rate = revenue.

But that calculation assumes something we know won’t be true: that financial activity stays exactly the same after we tax it.

People respond to incentives. Trading strategies change. Some transactions stop happening. Others happen less frequently. Some activity moves. New ways of accomplishing the same financial objective may emerge.

In other words, introducing the tax changes the very base we’re trying to estimate.

As part of the deeper due diligence we’ve been doing on the FST, we’ve spent considerable time examining these potential behavioral responses. And one thing has become increasingly clear:

“Trading volume will decline” doesn’t tell us nearly enough.

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What actually changed?

Suppose we introduce a transaction tax and trading volume falls by 30%. What does that tell us?

Did investors decide not to make investments they otherwise would have made? Did market makers pull back, reducing liquidity? Did businesses or pension funds stop making useful hedges? Or did a trading strategy that previously bought and sold the same position 100 times now do it 50 times?

Those aren’t remotely the same economic outcome.

When economists talk about the behavioral response to a financial transaction tax, or FTT, there are actually several different things that might happen.

Market participants could:

• stop making some transactions altogether;

• trade the same underlying positions less frequently;

• consolidate or net transactions to reduce taxable events;

• change their trading strategies;

• substitute one financial instrument for another;

• move activity to another jurisdiction;

• pass some of the cost through in other prices; or

• develop new products or structures that accomplish much the same thing with less tax.

All of those count as behavioral response. But their consequences for both financial markets and tax revenue could be very different.

A quick terminology note may be useful here. Financial transaction tax (FTT) is the broad category generally used to describe taxes imposed on financial transactions, including many of the historical examples we’ve been studying. Financial Settlement Tax (FST) remains the working name for the Unburden America proposal.

As our due diligence continues, we’re refining exactly where the FST should attach and how modern clearing and settlement infrastructure might be used to collect it. So for now, I’ll use FTT when discussing the broader category and FST when referring specifically to our proposal.

Some behavioral response may be relatively benign

An interesting piece of American history helps illustrate why these distinctions matter.

From 1917 until 1938, the United States imposed a federal tax on futures transactions. Depending on the period, the tax was roughly equivalent to 1 to 5 basis points (0.01% to 0.05%).

Researchers have gone back and studied what happened. They found evidence that the tax reduced trading volume, but they did not find a comparable reduction in open interest, a measure of the underlying positions participants continued to hold. Nor did they find a significant effect on volatility. In simplified terms, people apparently traded less without evidence that they reduced their underlying positions by a comparable amount.

Imagine an investor who wants to own a particular asset. Without a transaction tax, that investor might move in and out of the position repeatedly. With a small tax, perhaps the investor still owns the asset but trades it less frequently. Trading volume falls, but the underlying investment hasn’t necessarily disappeared.

Less trading does not automatically mean less economically meaningful investment.

That’s important for us to understand. But it would be equally dangerous to jump to the conclusion that a decline in transaction volume is always harmless.

Some behavioral response could be harmful

Financial markets perform important economic functions. They provide liquidity, help establish prices, allow businesses and investors to hedge risk, facilitate financing and capital formation, and transfer risk among participants. Market makers and other intermediaries help make those systems work.

If a transaction tax substantially damaged those functions, that would matter.

Our research into Italy’s financial transaction tax, for example, found studies identifying deterioration in some measures of market liquidity and wider spreads following implementation, although interpreting real-world experiences like Italy is complicated by other economic events occurring at the same time.

Our objective is not to reduce trading.

Our objective is to raise substantial, sustainable revenue without materially harming the useful functions financial markets provide.

That means a decline in transaction volume isn’t automatically good or bad. If some highly repetitive trading declines while investment, liquidity, price discovery, hedging and capital formation remain healthy, the economic effect may be relatively benign. If useful activity disappears, liquidity deteriorates or financing costs rise, that’s a very different result.

Which leads to an important question: Why would the same small levy affect different kinds of financial activity so differently?

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Why the same tiny tax can have very different effects

One way I’ve started thinking about this is as an economic hurdle.

Suppose a trader sees an opportunity expected to earn one basis point. If a transaction tax adds two basis points of cost, that transaction probably doesn’t happen. The expected return is no longer large enough to clear the additional hurdle created by the tax.

Now imagine a long-term investor buying an asset expected to generate a substantial return over ten years. A one-time two-basis-point charge is unlikely to determine whether that investment gets made.

Same tax. Very different effects.

But frequency adds another dimension.

Some financial strategies require many transactions to produce an overall economic return. Positions may be repeatedly bought, sold, hedged or rebalanced. A tax encountered once is very different from the same tax encountered repeatedly as part of a high-turnover strategy.

Suppose, for example, a strategy requires 100 taxable transactions over time to produce its expected overall return. A two-basis-point tax encountered repeatedly through that process creates a very different cumulative cost than a two-basis-point tax paid once to establish a long-term investment.

This doesn’t mean a strategy becomes uneconomic simply because it trades frequently. If each independent transaction remains profitable after the tax, many of those trades may still occur. But where repeated transactions work together to generate an overall return, cumulative transaction costs can materially change the economics of the strategy.

So there are really two related questions:

Does the individual transaction still make economic sense after the tax?

And:

How often must the tax be encountered to produce the overall economic return?

Our research suggests that both expected profitability and transaction frequency may be important in determining how sensitive different kinds of financial activity would be to a transaction tax.

A tiny tax can therefore be almost irrelevant to one kind of financial activity and highly consequential to another.

Sometimes activity doesn’t disappear. It changes shape.

Market participants may still want essentially the same economic exposure after a transaction tax is introduced. They may simply find a more tax-efficient way to get it.

Transactions might be consolidated. Holding periods might increase. Participants might net more activity or change execution strategies. A trading strategy might be redesigned around the new transaction cost.

The result could be fewer taxable transactions without eliminating the underlying economic purpose of the activity.

Behavioral response, in other words, isn’t simply a choice between trading and not trading. There is a large middle ground in which people continue pursuing much the same economic objective but change how they do it.

And sometimes that adaptation creates a bigger challenge.

Sometimes the activity simply goes somewhere else

Sweden provides an important warning.

Beginning in the 1980s, Sweden imposed financial transaction taxes that were eventually expanded to additional financial instruments. Market participants responded in several ways, including moving some trading outside Sweden and substituting other instruments for the ones being taxed.

The fixed-income experience was particularly instructive.

When taxes were imposed on certain bond transactions, investors didn’t necessarily stop seeking the same kinds of financial function or exposure. Some activity shifted toward instruments that were taxed less heavily or not taxed at all. The taxed market shrank dramatically, but some of the underlying economic activity had effectively found another route.

That’s a very different behavioral response from economic activity simply disappearing.

A transaction that genuinely disappears is one thing. A transaction that reappears somewhere outside the tax base is another. The economic activity may still be occurring, but the government is no longer collecting the tax.

That means what we leave outside the tax base may sometimes matter almost as much as the rate we impose on what is inside it.

It also means anti-avoidance provisions aren’t a technical detail to worry about after the policy is designed. They are part of the design itself.

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And who ultimately bears the cost?

There is one more behavioral question we need to acknowledge carefully.

Who legally pays or remits a tax doesn’t necessarily tell us who ultimately bears its economic cost. Financial intermediaries might absorb some of a transaction tax, or some portion of the cost might eventually show up through changes in pricing, spreads, fees, returns or other adjustments.

Economists call this tax incidence.

I’m deliberately not going very far down that road today. It’s an important enough question to examine carefully rather than speculate about.

But it belongs on our due-diligence list.

Behavioral response isn’t one number

We’ve always known that behavioral response would be an important part of estimating FST revenue. Reduced trading, avoidance, migration and other forms of adaptation have been part of the discussion from the beginning.

What this latest research has made much clearer is how many different forms that response can take, and how differently each one might matter.

A 30% decline in transaction volume tells us something.

But it doesn’t tell us enough.

We need to understand what stopped, what simply happened less frequently, what was consolidated, what shifted into another financial instrument, what moved elsewhere, and what was redesigned around the tax.

Most importantly, we need to understand the economic consequences of those changes.

That’s why we’re becoming increasingly skeptical of treating behavioral response as one universal percentage that can simply be subtracted from the entire FST base.

Assume activity falls 20%, 30% or 40%.

That may make a spreadsheet easier to build, but equities aren’t Treasury securities. Treasury securities aren’t repo. Repo isn’t foreign exchange. Foreign exchange isn’t derivatives.

These markets have different economics, margins, turnover rates, purposes and substitutes.

There probably isn’t one behavioral response. There are many.

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So what does this mean for FST revenue?

It means our revenue modeling needs to become more sophisticated.

Instead of simply saying:

$X quadrillion × 0.1% = $Y trillion

we need to start with the covered activity, account for legitimate exemptions, estimate how much activity might disappear, decline, change form or move outside the base, and determine how much taxable activity is likely to remain.

That’s the base that matters for sustainable revenue.

Increasingly, we think we need to do this market by market: equities, Treasuries, repo, corporate and municipal bonds, foreign exchange, derivatives and other covered financial activity.

Each may behave differently. And that raises another question we’re now exploring:

Should they all have the same tax rate?

Perhaps. But perhaps not.

There may be a “Goldilocks” rate for different kinds of financial activity: a rate designed to maximize sustainable revenue while preserving the economically valuable functions those markets provide.

We’ll explore that more carefully another day.

Markets adapt. Good policy should too.

The deeper we get into this research, the clearer it becomes that we shouldn’t pretend we can predict human behavior with perfect precision.

Economic models can help. Academic research can help. History can help. The experiences of other countries can teach us a great deal.

But none of them can tell us with certainty how every participant in today’s enormous, interconnected, modern American financial system would respond to a Financial Settlement Tax that we haven’t finished designing yet.

That isn’t a reason to stop. It’s a reason to design carefully.

And eventually, it may be a reason to implement carefully too.

Markets are made up of people and institutions responding to incentives. Change the incentives and they will adapt.

The job isn’t to assume they won’t. It’s to design the policy knowing that they will.

And that brings us back to the question guiding this stage of our work:

What will work well?

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I spent a good part of this week doing exactly what I said we would do with the Financial Settlement Tax: taking a closer look at some of our assumptions.

Specifically, I wanted to strengthen our estimate of the potential tax base.

We have been working with an estimated base of roughly $4.5 quadrillion in annual financial activity. That estimate was built by identifying several enormous financial markets and the relatively small number of clearing and settlement systems through which much of that activity flows.

But it was time to go back through that work again more carefully.

Update the numbers. Go deeper into the underlying market structure. Look more closely at exactly what we are including and excluding. And, most importantly, ask whether we have defined the tax itself as precisely as we need to.

So I pulled on a thread.

A few hours later, I had quite a bit more thread than I expected.

Oh boy. Where is this going?

There were a couple of moments when I encountered a new piece of information and thought:

Oh boy. Where is this going?

I suspect anyone who has seriously developed an idea knows that feeling. You’ve built something that seems coherent. Then you examine one assumption more closely and discover another question underneath it. That question leads to another. It would be easy at that point to start searching for evidence that reassures you. But that’s not due diligence.

So I kept coming back to one question:

What will work well?

What design could produce a substantial, durable source of revenue while minimizing disruption, protecting useful market activity, limiting opportunities for avoidance and keeping the burden away from ordinary economic life?

That’s the objective.

And this week’s research opened several areas that deserve a closer look.

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Five questions we’re examining

Some of these may sound technical, but they have very practical consequences.

1. Where should the levy actually attach?

A financial transaction can pass through several stages between the moment a transaction or trade occurs and the moment everything is finally settled and funded.

Should the levy apply to the value of the bona fide transaction itself? Should it apply after transactions have been netted through the clearing process? Or is there another point in the process that would work better?

My original conception was closer to the transaction itself: identify a bona fide financial transaction, apply a very small levy, and use the highly concentrated clearing and settlement infrastructure to assess and collect it.

That still makes intuitive sense to me. But now we’re going to test it further rather than simply assume it.

2. Who should pay it?

Every ordinary purchase or sale has two sides: a buyer and a seller.

I’ve generally thought about the levy as attaching to the side receiving the money. But is that actually the best design? Could the buyer be responsible? Could responsibility be divided? Or could the clearing or settlement institution simply collect and remit the tax in a way that makes the distinction less important administratively?

Other transaction-tax proposals approach this in different ways. We should understand why.

3. What exactly belongs in the base?

This is the big one.

We’ve been using approximately $4.5 quadrillion as our working estimate. But large financial-system numbers can represent different things: transaction values, settlement values, netted obligations, derivatives notionals and actual cash flows.

Those aren’t interchangeable.

We’ve already made an important distinction with derivatives. An enormous notional value does not necessarily mean that amount of money is actually being exchanged. Simply adding all derivatives notionals to the tax base would therefore give us a very different kind of number.

Now we’re applying that same discipline across the rest of the proposed base.

The goal isn’t to compile the biggest possible number.

The goal is to construct the right base.

4. What is the appropriate levy rate?

We’ve often illustrated the proposal using a rate of 0.1%.

But the appropriate rate can’t really be determined independently of the base.

A broader transaction-level base might support a smaller rate. A more narrowly defined base might support a somewhat higher one. And in either case, the relevant question isn’t simply what a particular rate produces on a spreadsheet.

We also have to ask what happens after markets respond.

How would trading patterns change? Would some transactions migrate elsewhere? Would some activity disappear? Would new avoidance strategies emerge?

Ultimately, what matters isn’t theoretical revenue. It’s sustainable revenue after the financial system adapts.

5. Should different financial instruments have different rates?

This is one of the more interesting possibilities that emerged from this week’s research.

I spent some time looking at other financial transaction tax proposals. Some apply different rates to different types of financial instruments.

There may be a good reason for that.

Stocks, bonds, derivatives and short-term financing markets don’t operate identically. Their transaction volumes, margins, turnover rates and economic functions can be very different.

Perhaps one very low rate across everything is still the best design. But perhaps different rates, calibrated to the characteristics of different markets, would work better.

That’s now on the research list.

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What if the base gets smaller?

This was probably the uncomfortable question underneath much of this week’s work.

What happens if deeper due diligence produces a potential base smaller than the roughly $4.5 quadrillion we’ve been using?

My answer is: Then it gets smaller.

We’re not trying to defend a number. We’re trying to build a policy that works.

A smaller base could conceivably be a better base if it is more accurately defined, easier to administer, harder to avoid and less likely to create damaging market distortions.

It could also imply a different rate.

Or we may finish this work and find that something close to our current estimate is well supported. We don’t know yet, and I’m deliberately resisting the temptation to decide what the answer should be before finishing the work.

The real question isn’t how many quadrillions we can put into a spreadsheet.

It’s how much sustainable revenue a carefully designed system could realistically generate after accounting for exemptions, behavioral adaptation, avoidance and changes in financial activity itself.

That’s the number that eventually matters.

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The other side of the uncomfortable part

Something interesting happened after those initial Oh boy moments. The research started producing possibilities I hadn’t seriously considered before.

Maybe we’ve been using the word settlement without defining precisely enough what we mean by it.

Maybe the tax is best understood as applying to certain bona fide financial transactions while using clearing and settlement infrastructure as the efficient collection point.

Maybe different markets require somewhat different treatment.

And probably the relationship between the base and the rate is more important than either number by itself.

Those aren’t necessarily problems. Some may turn out to be improvements. And the feeling of the exercise gradually changed from Where is this going? to Okay, this is interesting. Let’s keep digging.

This is Version 1 in real life

I’ve written before about the value of putting an imperfect Version 1 into the world.

This week reminded me why.

When an idea stays safely inside your own head, it’s surprisingly easy for all the pieces to fit together. Then you expose it to more information, ask harder questions, compare it with other proposals and look more closely at the machinery underneath it.

Occasionally you discover that something you thought was settled deserves another look.

That’s the refinement process doing its job.

It’s also one of the reasons I’ve wanted to develop Unburden America in public. Readers shouldn’t only see polished conclusions. I think there is value in occasionally showing you how we got there. And this is part of how we get there.

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So we’re going deeper

The goal of Unburden America has never been to defend one particular spreadsheet or one particular number.

Our underlying hypothesis is much bigger: America’s revenue system places too much burden on work, wages and the Real Economy while enormous amounts of financial activity occur within the modern Monetary Economy.

The Financial Settlement Tax asks whether a small levy on some portion of that activity could provide a modern source of federal revenue and create room to reduce burdens elsewhere.

We continue to believe that underlying hypothesis is solid.

Now our job is to determine the best way to turn it into a policy that actually works.

So we’re going to rebuild and verify the base carefully. We’ll look at the major markets one at a time, distinguish genuine transactions from numbers that measure something else, and examine where a levy could most effectively attach.

We’ll look at who should pay it, what exemptions may be necessary, what rates make sense, whether different markets should be treated differently, and how financial activity might adapt in response.

Some of that work will strengthen ideas already in the proposal. Some may cause us to refine them. And occasionally we may discover a better idea than the one we started with.

That’s why we’re doing this next round of due diligence now.

We’re not trying to make the evidence fit the proposal. We’re trying to make the proposal fit the evidence.

And through all of it, we’ll keep coming back to the same guiding question:

What will work well?

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Every once and a while on a long trip, it’s useful to pull out the map.

Not because you’re lost, but because you want to see how far you’ve come, where you’re headed, and whether the route still makes sense.

Twenty-two posts into this Substack, this feels like one of those moments.

When I started writing, I knew there were subjects I wanted to explore: economic security, the Two Economies, our tax system, the enormous flow of money through the financial economy, the national debt, Social Security, the growing pressure on ordinary Americans, and whether there might be a better way to fund some of what government does.

What I didn’t fully appreciate was how those subjects would begin to weave themselves into a larger story.

The story arc has emerged as the investigation has unfolded.

That’s a good thing. But it also creates an interesting challenge in a Substack.

Some of you have been traveling with me for much of the journey. Others discovered this publication three posts ago. Some may have read one article that happened to catch their attention and nothing else.

I try to write each post so it can stand on its own. But increasingly, I realize these posts become more valuable when you can see how the questions connect.

So today, let’s pull out the map.

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We Glimpsed the Destination Pretty Early

One of the first things I did was jump ahead.

Before we’d explored all the economics or worked through the details of the Financial Settlement Tax, I wrote about what it might actually mean to Unburden America.

I did that deliberately. Without some sense of where this could lead, the Two Economies and financial settlement systems are mostly interesting academic ideas.

The destination matters.

I described one possible version of an America with a more modern and diversified revenue system: lower taxes on work and ordinary economic life, stronger Social Security and Medicare, greater fiscal stability, declining debt pressure, more breathing room for families and businesses, and greater capacity to invest in the country’s future.

Here is that post - What Would It Mean to Unburden America?

That wasn’t intended as a final allocation of every potential dollar. The exact mix should be studied, debated and refined. But it was important to establish that Unburden America isn’t simply proposing a clever new way for government to collect money.

The point is to reduce burdens and expand possibilities.

Once we’d glimpsed that destination, a harder question remained:

Could we actually get there?

Much of the journey since then has been about finding out.

The Road Behind Us

We started with the experience of ordinary Americans.

Why do so many people feel financially squeezed in one of the wealthiest and most productive societies in human history? Why do so many families seem to be living with less margin, less security and less confidence that things will get better?

Along the way, we’ve also stopped to explore some of the ideas underneath those questions. We’ve looked at the difference between wealth and money, what debt and prolonged survival mode can do to people and societies, and how assumptions about scarcity affect the choices we make.

We’ve explored the philosophy behind IsThereEnough?, looked at history and the choices that can change its course, considered the power of small “trimtab” changes, and even spent time thinking about how we explore big ideas in the first place.

Those weren’t detours from the journey. They helped us understand the territory we’re traveling through.

From there, we looked more closely at the economic system itself.

We explored the Two Economies: the Real Economy where most of us work, earn, produce, buy, sell and live our economic lives, and the enormous Monetary Economy that has grown around and alongside it.

That raised another question:

If the economy has changed so dramatically, does the way we fund our government still reflect the economy we actually have?

So we examined what a well-designed revenue system should accomplish. Then we looked backward, across more than a thousand years of history, at how societies have funded themselves as their economies changed.

One lesson stood out: when societies and economies undergo major transformations, their revenue systems tend to evolve with them.

We came back to the present and asked whether we might be living through another such transition now. That brought us back to the Financial Settlement Tax, not simply as an interesting idea, but as a possible response to the larger problem we’d been investigating.

More recently, we’ve begun moving from idea to proposal. We’ve looked at where the FST came from, how it has evolved, why we’re building it in public, and how and why we’ve drawn the boundaries around the proposed starting base.

That’s a lot of ground to cover in 22 posts, and I’ve only touched on the highlights here.

If you’re relatively new to Unburden America, I hope you’ll spend some time exploring the archive. You don’t need to read every post or read them in order. Follow the questions that interest you. Each post is designed to stand on its own, but together they tell a much richer story.

Unburden America Substack Archive

And the story is still unfolding.

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Somewhere Along the Way, a Book Started Appearing

Looking back over these first 22 posts, I can see places where this story could have been told better.

That’s partly the nature of writing an investigation while you’re conducting it. I didn’t begin with a finished manuscript and break it into weekly installments. I began with questions, ideas and subjects I knew I wanted to explore.

Some concepts turned out to be more important than I expected. Some ideas connected in ways I hadn’t anticipated. The larger story became clearer as I wrote it. And that has led to another project.

I plan to turn this work into a book, tentatively titled Is There Enough Money to Unburden America?

The Substack will provide much of its backbone, but the book won’t simply be these posts bound together. It will give me the opportunity to rearrange the pieces, fill in what’s missing, go deeper where necessary, and tell the story in a form better suited to the journey as a whole.

So you’re watching the Unburden America proposal develop, but you’re also watching the story of that journey take shape.

In a sense, you’re watching the book emerge in real time.

I don’t know its final shape yet.

I rather like that.

The Road Ahead

I can already see some of the destinations ahead.

I don’t know exactly what order we’ll visit them. Sometimes an unexpected question will lead us down a side road. Other times we’ll stop somewhere and stay awhile because the subject deserves more careful exploration.

But several major parts of the journey are coming into view.

Putting the Financial Settlement Tax Under Pressure

This is where we’re going next.

We’ve developed the proposal to a significant point. Now we want to put some of its most important assumptions under pressure.

What happens when financial markets respond to a levy? Would transaction volumes decline? Would activity migrate or trading behavior change? Who ultimately bears the economic cost?

And what about larger macroeconomic effects such as inflation, investment, liquidity, capital formation and economic growth?

We can’t assume we can perfectly predict every outcome in advance. That’s why testing, implementation, monitoring and potentially phasing changes carefully are also part of the discussion.

A serious proposal shouldn’t just try to predict consequences. It should be designed to detect them and respond.

There are other technical questions we’ll explore too. But I don’t intend to spend the next twenty posts inside the plumbing of the financial system.

There are bigger questions waiting.

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What Could We Do With the Money?

We’ve already begun answering this one.

Early in the series, I laid out one possible vision: lower payroll taxes, income-tax relief, stronger tax credits, protecting Social Security and Medicare, reducing America’s debt burden, and creating greater capacity for investments in the country’s future.

Those ideas don’t predetermine how every dollar of potential revenue should be used. But it makes little sense to examine only one side of the ledger.

If we’re proposing a new way to raise substantial federal revenue, readers deserve to see one serious version of what we could do with that money and what that might mean for ordinary Americans and the country.

We’ll dig deeper into those choices.

How much should go toward reducing taxes on work and income? How should Social Security and Medicare fit into the plan? How aggressively should we reduce deficits and debt? What investments could increase America’s productive capacity and future prosperity?

And what guardrails should accompany a new revenue source so greater fiscal capacity doesn’t simply become an invitation to spend without limits?

The precise answers are open to debate.

The revenue mechanism tells us what might become possible. The other side of the ledger asks what choices we should make with that possibility.

How Did We Become So Wealthy, and Why Doesn’t It Always Feel That Way?

There are also larger economic questions I’ve wanted to explore almost since the beginning.

By historical standards, modern Americans have access to extraordinary abundance. How has our standard of living changed over time and around the world? And how can a society be extraordinarily wealthy while so many of its citizens still experience financial insecurity?

I also want to understand the broad prosperity of the 1950s and 1960s more deeply. What combination of productivity, industrial strength, public investment, taxes, monetary and fiscal policy, labor institutions, demographics and social conditions contributed to that period?

What can we learn without romanticizing the past or pretending we can recreate a world that no longer exists?

And then there’s a question that particularly interests me.

We’ve all seen versions of the chart showing productivity and worker compensation rising together for decades and then beginning to diverge. Productivity continued to rise, while typical worker compensation didn’t keep pace.

Where did those gains go?

I have a hypothesis that part of that story may connect to the extraordinary growth of the Monetary Economy. But right now, that’s a question, not a conclusion.

I want to find out.

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And Then There’s the Question Hanging Over Every Big Idea

Even if this works, how do we make it happen?

An economically sound proposal that never moves beyond a white paper or website doesn’t accomplish very much.

Fortunately, we haven’t ignored this part of the challenge. My team and I have spent considerable time developing a roadmap for moving Unburden America from an idea supported by a small group of committed people toward a broader, people-powered movement capable of generating serious public discussion and, ultimately, political action.

We believe we have a strong plan.

It includes building public understanding, bringing additional expertise into the process, developing a broader coalition, growing citizen participation, and creating enough public support that policymakers have reason to engage.

And just as we’re doing with the policy itself, we’ll share that roadmap, learn from the response and refine it.

We’ll explore how public understanding changes political possibility, how coalitions are built, how ideas move into mainstream debate, how opposition is addressed, and how ordinary citizens can move from spectators to participants.

Because Unburden America was never intended to be simply the name attached to a tax proposal.

Unburden America is intended to become a people-powered movement.

I look forward to sharing more about how we believe we can get there.

A Map, Not a Fixed Itinerary

I can see the larger journey much more clearly than I could when I started. But I’m deliberately not turning this map into a fixed itinerary.

Some of the most useful questions we’ve encountered weren’t on my original list. They’ve come from research, conversations, and readers challenging assumptions or asking questions I hadn’t adequately considered.

Sometimes one answer simply produces a better question.

That’s one reason I’m doing this in public. I want economists, tax specialists, market professionals and policy experts to challenge the technical work, but I also want ordinary people asking ordinary questions.

Both matter.

So we’ll leave ourselves room to maneuver.

Sometimes an unexpected question will lead us down a worthwhile side road. Other times, we’ll reach a subject that deserves more time and decide to stay there awhile, look more closely, and understand it before moving on.

And if what we learn suggests we should adjust the route, we will.

We know the direction we’re traveling. We don’t need to predetermine every turn along the way.

So, Where Are We?

We’ve traveled far enough that the road behind us is beginning to make more sense, and I can see more clearly how the roads ahead connect.

We also know much more about where we’re trying to go.

This series isn’t the story of me explaining a final conclusion I reached before we started.

I did show you a possible destination early on. Now we’re trying to determine the best road to get there.

That means understanding the problem, following the evidence, developing the proposal, putting it under pressure, exploring what it could make possible, and building a movement capable of doing something with what we learn.

I’ll keep trying to make every post useful on its own. But every once in a while, we’ll pull out the map again.

Not because we expect the journey to follow it perfectly, but because it’s useful to remember where we’ve been, see where we’re headed, and make sure we’re still traveling toward the destination we set out to reach.

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A reader asked me a wonderfully practical question after my last post.

If we created a Financial Settlement Tax, would I pay it when I bought groceries? Filled my gas tank? Ordered something from Amazon? Bought a car? Paid college tuition?

In other words: What exactly gets taxed?

The short answer is no. The Financial Settlement Tax we’re proposing would not apply to those everyday transactions. Main Street in not included.

But the question made me realize something. I’ve written before about how the levy would work, including the transactions that would be included and excluded and specific venues covered. How Would This Settlement Tax Work?

But I don’t think I’ve spent enough time explaining why we’ve drawn the boundaries where we have.

Those boundaries weren’t accidental. In fact, deciding what not to include has been one of the most important parts of developing the proposal. So let’s take a closer look.

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First, A Quick Step Back

If you’re new to this conversation, we’ve been exploring the idea that today’s economy contains two very different kinds of economic activity.

There’s the Real Economy, where people work, build businesses, manufacture products, provide services, buy groceries, pay rent and generally live their economic lives.

Then there’s what Scott A. Smith calls the Monetary Economy, the enormous system of securities, debt, foreign exchange, derivatives and other financial activity that has grown around and alongside it.

Scott’s work was what first caused me to appreciate the extraordinary scale of this second economy. In Fixing America, he estimated annual flows across his broader Monetary Economy framework at approximately $6.125 quadrillion. That’s $6,125 trillion! By comparison, annual U.S. GDP is roughly $30 trillion.

Those numbers were the beginning of this investigation for me. But they weren’t the end of it.

Scott’s Big Idea, and Where We Drew a Different Line

Scott’s original proposal is considerably broader than the Financial Settlement Tax we’re developing through Unburden America.

His Flow Tax isn’t limited to the institutional financial settlement activity we’re proposing to levy. His concept looks much more broadly at the flow of money across the entire economy, including kinds of activity that Unburden America deliberately leaves outside its initial base. That broader base is an important part of his much larger proposal: Scott envisions using a small levy across that enormous flow to replace the taxes Americans currently pay.

It’s an audacious idea.

And certainly we agree with his powerful foundational insight:

Why concentrate so much of our revenue system on the relatively small Real Economy when an enormous Monetary Economy has developed alongside it?

But as I studied Scott’s proposal, I became less convinced that we should try to make that entire leap at once.

Replacing virtually the entire existing tax system while simultaneously introducing a levy across an extraordinarily broad range of monetary flows would be a massive change. Maybe there is a path that eventually takes us closer to Scott’s vision. But that doesn’t have to be the starting point.

So we asked a narrower question:

Can we begin with the largest, cleanest and easiest-to-administer institutional settlement flows, leave Main Street outside the levy, and use that new revenue source to reduce some of the burdens the existing system places on ordinary Americans?

That became the starting point for Unburden America.

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Main Street Stays Out

This is one of the most deliberate design decisions we’ve made.

The Real Economy already carries most of the burden of our existing revenue system through taxes on income, payroll, businesses, purchases, property and other forms of everyday economic activity.

The purpose of the Financial Settlement Tax isn’t to find another way to tax the same activity.

It’s to diversify the country’s revenue base by drawing a modest amount of revenue from a very different and vastly larger pool of financial activity.

So groceries stay out. Amazon purchases stay out. Gasoline purchases stay out. Tuition stays out. Routine debit and credit card purchases, household payments, payroll deposits and ordinary consumer banking activity stay out.

We’re not starting with every conceivable flow of money. We’re starting with large-scale institutional financial settlement.

And here’s the surprising part:

We can leave an enormous amount out and still have an enormous potential revenue base.

How Did We Decide What Goes In?

Once we decided not to simply tax every flow of money, we needed principles for determining where to draw the line. Several emerged.

Start where the scale is.

The extraordinary size of the Monetary Economy gives us an unusual advantage: we can afford to be selective.

We don’t need to capture every financial transaction or reach into every corner of the Monetary Economy to create a potentially transformative new source of revenue. We can begin with the largest, clearest concentrations of institutional settlement activity, leave more complicated or questionable categories outside the initial base, and still have an enormous amount of activity to work with.

Scale allows us to choose the best starting point rather than build the biggest possible base.

Consider where collection is practical.

A tax base is less ideal if collecting from it requires building an enormous bureaucracy or imposing new filing requirements on millions of households and businesses.

Much of the institutional activity we’re examining eventually reaches a relatively small number of clearing and settlement systems that already calculate, record and process these flows.

Instead of chasing trillions of individual transactions, go to the relatively small number of places where enormous volumes of those transactions ultimately settle.

The infrastructure is largely already there.

Count actual cash settlement.

We aren’t proposing to tax market capitalization, derivative notional values, order flow or every giant number associated with financial markets.

We’re interested in actual covered U.S.-dollar cash settlement.

Count it once.

The same money can appear at several stages as a financial transaction clears, settles and moves through the banking system. If we simply added every published number together, we could dramatically overstate the base.

So the proposal uses a one-touch principle: identify the primary covered settlement event, collect there, and don’t count that same underlying flow again downstream.

And finally:

Don’t include something merely because we can.

If a category creates unnecessary complexity, an unclear boundary or a substantial implementation problem, we don’t necessarily need it in the initial proposal.

Those principles have brought us to the base we’re proposing today.

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So What Is Actually in the Starting Base?

Based on the principles we just discussed, our best first question is:

Where do enormous amounts of U.S.-dollar institutional financial activity ultimately reach a measurable settlement point?

The proposed taxable event is specific: selected U.S.-dollar cash settlement, collected once at defined clearing or settlement points.

For the current Phase One proposal, that leads us to three major components of the base.

1. Large-scale U.S. securities settlement

The largest component runs through infrastructure associated with the Depository Trust & Clearing Corporation, or DTCC.

DTCC isn’t a stock exchange. Think of it as part of the enormous behind-the-scenes machinery that clears and settles securities transactions after buyers and sellers make their trades.

Its various subsidiaries process activity involving equities, Treasury securities, repos, mortgage-backed securities and other financial instruments.

2. The U.S.-dollar side of foreign-exchange settlement

The foreign-exchange market is enormous, but we’re not proposing to claim the entire global currency market as part of an American tax base.

The initial framework includes eligible settlement through CLS and, importantly, only the U.S.-dollar side of the transaction.

3. Specific cash flows associated with covered cleared derivatives

Derivatives require even more care because this is an area where enormous numbers can easily mislead.

You’ve probably seen estimates of derivatives markets running into hundreds of trillions of dollars or more. Those figures often represent notional values.

That’s not what we’re proposing to tax.

The current framework looks instead at specific actual cash flows associated with covered cleared derivatives, such as certain option premiums, variation-margin payments and final cash settlements.

What About Exemptions?

Even within these covered markets, that doesn’t necessarily mean every settlement would be treated identically.

A final proposal may need carefully defined exemptions or special treatment for certain activities that are essential to healthy market functioning, such as bona fide market-making and necessary hedging activity.

But exemptions also create opportunities for avoidance if they’re drawn too broadly. So this is another area where the details matter, and where additional input from market professionals, economists and tax specialists will be important.

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Why Aren’t Fedwire and CHIPS Part of the Base?

This is where the one-touch principle becomes important.

Large-value payment systems such as Fedwire and CHIPS handle extraordinary amounts of money. At first glance, it might seem obvious that we should simply add those numbers to the base too.

But Fedwire and CHIPS are payment rails, and their gross volumes can overlap substantially with cash associated with financial activity already captured at an upstream clearing or settlement point.

If a covered settlement is captured upstream and the resulting cash subsequently moves through Fedwire or CHIPS, taxing that downstream movement again could mean counting the same underlying transaction twice.

That’s why we don’t simply add their enormous published volumes to our Phase One base.

A bigger number isn’t necessarily a better number.

A defensible number is.

Why Leave Institutional ACH Out?

Institutional ACH is a good example of how this proposal has already evolved.

Earlier versions of our model included large institutional ACH transactions. The idea seemed straightforward: include very large institutional transfers while leaving household and ordinary business payments alone.

Then we tried to determine exactly where to draw the line.

How large does an ACH transaction need to be before we can confidently call it institutional? Could an arbitrary threshold inadvertently pull smaller businesses into a system specifically designed to leave Main Street alone?

We weren’t satisfied that we’d found a boundary we could defend. So we took institutional ACH out of the initial proposal.

That doesn’t necessarily mean it stays out forever. Large institutional ACH could eventually become part of a later phase, particularly if experience shows that excluded channels are being used to avoid the levy.

More broadly, any final proposal will need sensible anti-avoidance provisions so that covered activity can’t simply be restructured or moved elsewhere to escape the levy. That’s an important issue, and one we’ll examine much more closely when we explore how markets might adapt to the proposal.

For now, we’d rather begin with a slightly narrower base we can defend than make the base larger simply because we can.

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And What About Crypto?

Cryptocurrency presents a different issue.

Crypto clearly belongs in the broader conversation about the modern Monetary Economy. But its fragmented and decentralized infrastructure creates additional questions involving measurement, jurisdiction, collection and enforcement.

Again, we don’t have to solve every problem on Day One.

If the initial settlement base is already enormous and can be accessed through established clearing and settlement infrastructure, why make the starting proposal unnecessarily complicated?

Crypto may eventually belong in a later phase. For now, it stays out.

The Base Is a Design Choice

When someone asks, “What exactly would the Financial Settlement Levy tax?” there are really two answers.

The technical answer is that the initial proposal focuses on selected U.S.-dollar cash settlement flows moving through a limited number of major institutional clearing and settlement systems.

But the more important answer is about how and why we chose them.

Our approach is fairly simple:

• Start where the scale is.

• Consider where collection is practical.

• Leave Main Street alone.

• Count actual cash settlement.

• Count it once.

• Don’t make the initial proposal more complicated than it needs to be.

• Keep refining the boundaries as evidence and experience tell us more.

That last principle matters.

I’ve been talking about putting Version 1 of this proposal before the public. That’s probably a little unfair to Versions 1 through 11.

Our team has already invested thousands of hours researching, questioning assumptions, building models and refining the proposal as we’ve learned more. We’ve added categories and removed them. We’ve reconsidered rates. We’ve changed our thinking when the evidence or practical considerations gave us reason to.

The decision to leave institutional ACH out of the initial base is one example.

So perhaps what you’re seeing is closer to Version 12. And I hope there will be a Version 13. And a Version 14.

Because that’s what serious development looks like.

If economists, tax specialists, market professionals, policy experts or thoughtful citizens show us that we’ve drawn one of these boundaries incorrectly, we want to know. If better data changes one of our assumptions, we should change the assumption. If someone identifies an unintended consequence we haven’t adequately considered, we should investigate it.

Continued refinement is part of how the process is supposed to work.

We’re not trying to identify every conceivable dollar that could be taxed.

We’re trying to identify the largest, cleanest, most defensible starting base we can.

Right now, our work suggests that initial base is approximately $4.5 quadrillion annually. Is that number exactly right? Are there flows we’ve counted that shouldn’t be there? Others we’ve left out that eventually should be included? Could market behavior change the size of the base once a levy is introduced?

Those are precisely the kinds of questions this next stage of due diligence needs to test.

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Why This Boundary Matters

A reader started this conversation by asking whether the Financial Settlement Levy would apply when he buys groceries, fills his gas tank or pays college tuition.

The answer is no.

But I hope the reason why is clearer now. Keeping those transactions out isn’t simply a technical feature of the proposal.

It’s part of the point.

For generations, we’ve relied heavily on the Real Economy to fund our government: taxing the money people earn, the work businesses create, and many of the things families buy and own.

Meanwhile, an enormous Monetary Economy has grown alongside it.

Unburden America asks whether it’s time to shift part of the responsibility for funding our government toward that enormous financial economy, allowing us to reduce some of the burden currently carried by ordinary Americans and the Real Economy.

Not all of it. Not all at once.

But enough to begin building a revenue system that is more diversified, more modern, and asks the enormous Monetary Economy to carry a greater share of the responsibility for funding the society in which it operates.

That’s why Main Street stays out.

And that’s why we believe it’s time for America’s revenue system to recognize the enormous Monetary Economy that has grown alongside it.

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Over the past several weeks, we’ve taken a long look backward before looking ahead.

We explored how civilizations have funded themselves for thousands of years, how revenue systems evolved as societies changed, and why America’s transition from tariffs to the income tax reflected a profound shift in the economy rather than simply another political debate.

Last week, we brought that story into the present and asked whether we may be living through another one of those transition moments.

If the last three posts have felt like they were building toward something, they were.

We weren’t simply exploring history.

We were asking a much larger question.

What should thoughtful societies do when they recognize that their society - and their economy - have evolved beyond the revenue system they inherited?

Few Americans would argue that our current system is working as well as it could. Families across the country feel financially stretched. The federal government continues to run persistent deficits. Many people believe the tax code has become overly complex. Others question whether it remains fair or whether it still reflects the economy we have become.

That doesn’t automatically mean we’ve found the answer.

But it does suggest we’re asking the right question.

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How Good Ideas Become Good Public Policy

History suggests we don’t begin by rushing toward answers.

We begin by asking better questions. We spend time understanding the system we’re trying to improve, diagnosing the problem as accurately as we can, gathering evidence, testing assumptions, and anticipating both the intended and unintended consequences of any proposed change.

Only then do we begin shaping possible solutions.

That’s exactly what we’re trying to do.

Whether you’re designing a bridge, developing a new medicine, building a successful company, or crafting public policy, good ideas improve through testing. Engineers stress-test designs before they’re built. Scientists invite peer review before announcing discoveries. Entrepreneurs often release an early version of a product, learn from real-world experience, and improve it through repeated iterations.

The principle is the same.

The sooner thoughtful questions are asked, the sooner weak assumptions can be corrected and strong ideas can become even stronger.

The Financial Settlement Levy concept has reached a point where it deserves broader examination. I believe the next stage of its development should happen in the open.

The purpose of due diligence is to discover what we don’t yet know while there’s still time to improve the idea. Good ideas should survive serious scrutiny. Weak ideas shouldn’t.

That’s the purpose of the process.

If the Financial Settlement Levy turns out to be stronger than we currently believe, rigorous examination will make it better. If important weaknesses remain, it’s far better to discover and address them now than after becoming too invested in a particular solution.

Either outcome represents progress. Because we’re not trying to win an argument.

We’re trying to solve a problem.

Where We Stand Today

After twenty essays—and well over a thousand hours of research, writing, discussion, and refinement - I think it’s helpful to distinguish between two things:

What appears increasingly well supported...

and

What still deserves further investigation.

Areas Where the Evidence Appears Increasingly Strong

America’s economy has changed dramatically.

Over the past century, the center of gravity of the economy has shifted repeatedly. Today, the growth of the Monetary Economy represents another significant transition - one that deserves the same thoughtful attention earlier generations gave to the rise of domestic manufacturing.

The Monetary Economy has become an enormous part of modern economic activity.

The scale difference between roughly $30 trillion in annual GDP and more than $4.5 quadrillion in annual financial settlements suggests that a tremendous amount of economic activity now occurs in a part of the economy that barely existed when today’s revenue system was designed.

History shows that revenue systems evolve.

One of the clearest lessons from the past thousand years is that societies periodically adapt the way they raise public revenue as their economies evolve. The idea itself is neither radical nor unprecedented.

There are growing signs that the current system is under strain.

No single factor explains today’s challenges, and no single change will solve them. But several indicators suggest the current revenue system deserves careful examination. Many Americans feel increasingly burdened. The federal government continues to run persistent deficits. New proposals to invest in national priorities are often sidelined because “we don’t have the money.” Public confidence in the tax system is strained. Across the political spectrum there is widespread recognition that important parts of the system are no longer working as well as they should.

Diversification is generally a sound design principle.

Nature, engineering, finance, and business all teach similar lessons: resilient systems rarely depend on a single source of strength. That principle deserves thoughtful consideration as we think about public revenue as well.

The Financial Settlement Levy deserves serious evaluation.

Based on everything we’ve explored so far, I believe this proposal has earned something more valuable than immediate acceptance.

It has earned careful examination.

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Questions That Deserve Further Exploration

What is the optimal rate?

A levy that is too high could create unnecessary distortions. One that is too low may not achieve its intended objectives. Finding the right balance will require careful economic analysis and real-world modeling.

How would markets adapt?

Financial markets respond to incentives. Understanding how trading behavior, liquidity, settlement volumes, and financial innovation might change is an essential part of responsible due diligence.

What macroeconomic effects should we anticipate?

Any significant change to a nation’s revenue system should be examined for its potential effects on inflation, monetary policy, economic growth, financial stability, and the broader economy.

How should implementation and transition be managed?

Even a well-designed proposal must answer practical questions. How should it be introduced and tested? Which existing taxes might be reduced? How should governments, businesses, and financial markets adapt over time? Should we create a commission to oversee the implementation period?

What are the international implications?

Financial markets operate globally. Questions involving international competitiveness, capital flows, cross-border settlements, and tax incidence deserve careful study before any proposal moves forward.

How should this proposal fit within a diversified revenue system?

The Financial Settlement Levy was never intended to answer every question by itself. One of the most important design questions is how it should complement - not necessarily replace - other sources of public revenue.

These are exactly the kinds of questions thoughtful people should be asking, and exactly the kinds of questions we’ll begin exploring together in the weeks ahead.

The Process Is Already Underway

The proposal has already evolved over the last year.

The original intellectual work that introduced me to these ideas explored three related areas: a Financial Settlement Tax, ideas for how additional public revenue might be used, and broader proposals for restructuring parts of the banking system.

As I continued researching the history of revenue systems, studying public finance, and thinking about how new ideas gain public acceptance, I made a conscious decision to narrow the scope.

Today, Unburden America focuses primarily on one question:

Does the revenue mechanism itself stand up to careful scrutiny?

That’s not because the other questions aren’t important. They absolutely are. Unburden America already proposes reducing some existing taxes, expanding certain tax credits, dedicating a meaningful portion of any additional revenue to strengthening Social Security, and beginning to pay down the national debt.

But I came to believe that our first responsibility is making sure the underlying revenue mechanism is sound.

If it is, we’ll have a much stronger foundation for the important political conversations that follow.

This process has already informed my own thinking.

For example, the original proposal envisioned a Financial Settlement Tax rate of one-half of one percent. As I’ve continued studying the extraordinary scale of today’s Monetary Economy, I’ve begun to suspect that a much smaller rate may accomplish many of the same objectives while minimizing potential market disruption.

That’s exactly the kind of refinement I hope this public process continues to produce.

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We’ve Begun Soliciting Feedback

One encouraging thing has happened during the public conversations we’ve had so far. Most of the questions are no longer about whether the idea deserves consideration. Instead, they’re about details and implementation.

Is the settlement volume estimate sound?

How would markets respond?

Would Wall Street resist it?

How would other countries be affected?

What unintended consequences should we anticipate?

Those are exactly the questions we should be asking. They tell me we’ve begun moving from introducing an idea to seriously evaluating it.

A Little About Me

There’s one more thing I’d like to share.

Some readers may reasonably wonder who I am to be writing about a topic like this.

The short answer is that I’m not an economist, a tax attorney, or a public policy scholar.

I studied finance in college and spent a short time working in the financial industry before my career took a different direction. Over the years I’ve worked in sales, marketing, management, entrepreneurship, real estate investing, startup consulting, and helping young companies grow. Those experiences taught me to analyze complex systems, perform due diligence, recognize patterns, and continually ask a simple question:

Why does this work the way it does?

Over the last several years I’ve applied that same curiosity to public finance, economic history, and the changing structure of today’s economy while working with a small team to develop and refine the broader Is There Enough? conversation and what has become Unburden America.

Collectively, we’ve invested well over two thousand hours - and likely much more - researching, reading, writing, discussing, challenging assumptions, refining ideas, and trying to understand both the opportunities and the risks behind this proposal.

That work has given us confidence that the idea deserves serious consideration.

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An Invitation

One lesson has become increasingly clear during this project. When discussing public policy, we often try to answer several very different questions all at once. That usually creates more confusion than clarity.

There are several important questions to consider. I believe these conversations are most productive when we take them one at a time.

1. Is the proposal technically sound?

Before anything else, we should determine whether the Financial Settlement Levy actually works. Does it accomplish its intended goals? What are its strengths? What are its weaknesses? What unintended consequences should we anticipate? How can it be improved?

This is the conversation we’re having now.

2. Should society choose to adopt it?

Even a well-designed proposal must eventually be debated in the public square. Is it politically achievable? Is it the best option among competing alternatives? Those are important questions, but they belong after we’ve completed the technical due diligence.

3. If adopted, how should the additional revenue be used?

Should it reduce existing taxes?

Strengthen Social Security?

Expand tax credits?

Reduce the national debt?

Support new public investments?

Those are all legitimate public policy discussions. But they shouldn’t distract us from first determining whether the underlying revenue mechanism deserves serious consideration.

Over the past several years, our small team has brought this proposal to an important stage in its development. We believe the proposal has reached a point where its greatest opportunity for improvement lies in expanding the conversation to include people with additional knowledge, experience, and perspectives.

It’s time to open up the idea for public examination.

If you’re an economist, a tax specialist, a financial market professional, a historian, a policy analyst, or simply someone who enjoys thinking carefully about systems and complex public problems...

We invite you to join us in the next stage of this proposal’s development.

Bring your expertise. Bring your questions. Bring your skepticism. Bring your curiosity.

Challenge our assumptions. Identify weaknesses we’ve overlooked. Suggest improvements.

Help us anticipate unintended consequences. Help us refine this proposal until it deserves the confidence of the public.

The goal is to develop the strongest proposal we can - one worthy of serious consideration because it has been strengthened by serious examination.

What’s next…

In the weeks ahead, we’ll begin exploring many of these questions together. We’ll take a closer look at the size of the Monetary Economy, examine how financial markets might respond, consider potential macroeconomic effects, discuss implementation challenges, and continue refining the proposal in the open.

That’s not a detour from the journey. It’s the next stage of the journey.

Throughout this series we’ve seen that thoughtful societies periodically adapt the systems they inherit. Eventually, the need for change becomes difficult to ignore.

The real challenge is responding thoughtfully.

That’s the journey we’re beginning now.

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One hundred years ago, America faced a remarkable realization.

The country’s economy had changed. International trade remained important, but it was no longer the primary engine of economic growth. Domestic manufacturing, railroads, factories, and commerce had become the nation’s economic powerhouse. Yet the federal government still relied primarily on tariffs collected at America’s ports, while a much larger domestic economy was creating an increasing share of the nation’s wealth.

Americans began asking an important question:

Was America’s revenue system still aligned with the economy America had become?

That conversation eventually led to one of the most significant changes in American history: the adoption of the federal income tax.

In my last post, How Societies Fund the Future, we looked back across thousands of years of history and found a remarkably consistent pattern. As societies evolved, so did their revenue systems. They adapted as economies changed, as new challenges emerged, and as governments took on new responsibilities.

History doesn’t tell us exactly what our next revenue system should look like. But it does suggest something important.

When the economy changes dramatically, societies eventually ask whether their revenue system still reflects the world they have become.

I believe we may be in one of those moments again.

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The Quiet Transition

Earlier in this series I introduced the idea that America now operates with two overlapping economies.

The Real Economy is where people build their lives. It is where homes are built, businesses are started, products are manufactured, services are delivered, and families earn the income that supports everyday life.

The Monetary Economy is the financial layer. It includes trading, lending, investing, clearing, settlement, derivatives, foreign exchange, and the movement of money through increasingly sophisticated financial systems.

If you’re new to Unburden America, or if you missed those earlier posts, I’ll include links because today’s discussion builds directly on that foundation.

Are There Really Two Economies?

Could a Tiny Levy Change Everything?

Rather than reintroducing those ideas, I’d like to step back and place them within a much larger historical story.

The Industrial Revolution transformed America in ways no one could miss. Factories rose across the country. Railroads connected cities. Manufacturing exploded. Entire communities grew around industrial centers.

The next great economic transition has been very different.

Unlike the Industrial Revolution, this transformation didn’t reshape the skyline.

It reshaped the plumbing of the economy.

The transition didn’t happen in our neighborhoods. It happened quietly on Wall Street and inside the financial infrastructure that now connects the global economy.

Over the past fifty years, paper certificates gave way to electronic records. Trading floors became global computer networks. Settlement became increasingly automated. Markets became more interconnected, and financial innovation accelerated. Advances in computing and telecommunications removed many of the practical limits that had constrained finance for generations. Transactions that once required days could be completed in seconds, and eventually in milliseconds.

Technology didn’t merely improve finance. It fundamentally changed its scale.

What drove that growth?

Part of the answer is that finance itself became increasingly important to everyday life. Pension funds expanded. Millions of Americans began investing through retirement accounts and mutual funds. Businesses became more global and relied on increasingly sophisticated financial markets to raise capital and manage risk. International trade expanded, foreign exchange markets grew, and new financial instruments were developed to help businesses manage uncertainty.

Some of these developments could be described as pure unproductive speculation. But most reflected genuine innovation and created enormous benefits. Together, however, they produced something historically new: a financial layer of the economy that grew far faster than the productive economy beneath it.

Earlier in this series we explored just how dramatic that growth has been.

America’s Real Economy now produces roughly $30 trillion of goods and services each year. By comparison, the Monetary Economy processes at least $4.5 quadrillion in annual settlement flows through systems such as DTCC and CLS.

Those numbers measure different things, so they shouldn’t be compared as though they represent the same economic activity. But they do reveal something important.

The financial layer of our economy has grown to a scale that previous generations could scarcely have imagined.

The Ping Pong Ball and the Basketball

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When the Center of Gravity Shifts

Looking back across history, another pattern begins to emerge.

Every era has a place where an increasing share of economic value is created.

For thousands of years that was agriculture. Then came industry, where factories, railroads, manufacturing, and domestic commerce became the dominant engines of growth.

Today, a tremendous amount of economic activity takes place within sophisticated financial markets made possible by digital technology.

That doesn’t mean agriculture disappeared. It doesn’t mean factories no longer matter. The Real Economy remains where people live, work, raise families, and build their futures.

But the center of gravity of economic activity has shifted.

That observation leads me to a question that I think is more useful than many of the questions dominating today’s political debates.

We often ask:

Who has the money?

History suggests there may be a better place to begin.

Where is society creating value today?

Revenue systems have always evolved by following the answer to that question.

Over the last decade, a growing chorus has called to “Tax the Rich.”

I think that slogan reflects an important intuition.

Many people sense that something fundamental has changed. They see extraordinary concentrations of wealth, record financial markets, trillion-dollar companies, and levels of financial activity unlike anything previous generations experienced. They may not describe it as the rise of the Monetary Economy, but they recognize that the center of gravity has shifted.

That intuition deserves to be taken seriously.

History suggests the more interesting question isn’t simply who has accumulated wealth.

It’s understanding where economic value has become concentrated, why it has concentrated there, and whether our revenue system still reflects that reality.

Those are different questions.

One begins with individuals.

The other begins with the structure of the economy itself.

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Catching Up

The remarkable growth of the Monetary Economy doesn’t mean it has replaced the Real Economy. Quite the opposite. Modern financial markets provide essential services. They allocate capital, provide liquidity, help businesses manage risk, support investment, and make much of modern economic life possible.

The question is whether a mature economy should continue relying on a revenue system designed before the Monetary Economy reached its present scale.

In many ways, I think we’re simply catching up.

The transition from industrial dominance to the growing centrality of the Monetary Economy has been unfolding for roughly fifty years. Our conversations about public revenue, however, have remained focused largely on the economy that existed before that transition was complete.

Major economic transitions take time to understand. The shift from an agrarian society to an industrial one unfolded over generations. The rise of the Monetary Economy has taken decades, but because it happened inside computers, telecommunications networks, and financial infrastructure rather than highly visible factories and railroads, many of us scarcely noticed it.

History shows that nations eventually recognize these shifts.

And when they do, they begin asking new questions.

Diversification and the Next Transition

Another lesson from history is that resilient systems rarely depend too heavily on any one thing.

Investors diversify because the future is uncertain. Farmers diversify crops because weather is uncertain. Businesses diversify products because markets evolve.

Diversification creates resilience.

Perhaps revenue systems deserve the same wisdom.

As economies become more diverse and more complex, it may make sense for revenue systems to become more diversified as well. That doesn’t mean abandoning traditional sources of revenue. It means recognizing that a modern economy may be strong enough to support a broader, more resilient mix of revenue sources.

That idea becomes even more important as we look toward the next great transition.

Artificial intelligence, robotics, and automation are only beginning to reshape the economy. No one knows exactly what those changes will mean for employment, productivity, or the creation of wealth. There are already proposals to tax AI activity, tax robots, create public ownership stakes in AI companies, and explore entirely new ways of funding government.

Those conversations deserve thoughtful consideration.

But before we redesign our revenue system for an economy that is still emerging, perhaps we should first finish adapting it to the economy that has already arrived.

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A Better Question

The last great transition taught America to look beyond its ports and recognize the enormous domestic economy growing behind them.

The transition we’re living through may require us to recognize something equally important: over the past half century, the financial layer of our economy has become one of the largest and most significant arenas of economic activity in human history.

Whether that should influence the design of our revenue system is ultimately a question for all of us.

But history suggests the conversation should begin in the same place it always has.

Where is society creating value today?

Because every generation inherits a revenue system.

And every generation eventually decides whether it still reflects the economy they have become.

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Most of us think of taxes as a modern invention.

They’re anything but.

Long before there were nations, constitutions, or elected governments, people living together faced the same fundamental question:

How do we pay for the things we choose to do together?

Every civilization eventually discovers that some things are simply too big for any one person, family, or business to accomplish alone. Roads have to be built. Water has to be managed. Communities have to be protected. Trade has to be supported. Justice has to be administered.

Over time, societies have chosen to do many other things together as well - from educating children and building transportation networks to funding scientific research and providing retirement security. Civilization has always required some way of pooling resources to accomplish shared endeavors.

The answers have changed for thousands of years.

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The First Communities

The earliest permanent settlements didn’t collect taxes in the modern sense. Instead, people contributed labor, grain, livestock, or other goods to support the needs of the community.

The goal wasn’t simply to raise revenue. It was survival.

Someone had to maintain irrigation canals that brought water to crops. Someone had to construct defensive walls. Food needed to be stored against drought or famine. As communities grew larger, people discovered that certain responsibilities could only be accomplished by working together and pooling resources.

Communities that organized themselves well endured.

Those that didn’t often disappeared.

The Rise of Civilizations

As human societies grew larger and more sophisticated, so did the responsibilities they shared. Villages became cities. Cities became kingdoms. Kingdoms became empires. With each step came new challenges, new opportunities, and new ambitions.

In Mesopotamia, one of the world’s earliest civilizations, life depended on carefully managed irrigation systems. Canals had to be dug, maintained, and repaired. City walls protected growing populations. Temples served as centers of civic and religious life. Rulers maintained standing armies. To support these shared responsibilities, governments collected grain, livestock, labor, and tribute. Some of the earliest known writing appears on clay tablets used to record these obligations. Long before writing was used to tell stories, it was being used to keep track of public resources.

Ancient Egypt faced a different set of circumstances. The annual flooding of the Nile made the land extraordinarily fertile, but it also required careful planning and centralized administration. Grain was collected not only to support the government, but also to fill granaries that could sustain the population during poor harvests. Those resources also supported irrigation systems, temples, monuments, and other public works that still stand today. Their revenue system reflected the needs of a civilization organized around agriculture, flood management, and long-term planning.

As empires expanded, so did the complexity of governing them. The Persian Empire stretched across vast territories containing many different peoples and economies. Rather than demanding identical contributions from every province, Persian rulers increasingly tailored obligations to the productive capacity of each region. The challenge was no longer simply collecting resources. It was administering an empire.

The Greek city-states developed yet another approach. Maritime trade became central to their prosperity, so customs duties, harbor fees, and temporary wartime taxes played an increasingly important role. Their revenue system reflected the priorities of independent trading cities whose success depended on commerce and naval power.

Rome eventually assembled one of the most sophisticated revenue systems of the ancient world. Property taxes, customs duties, inheritance taxes, sales taxes, provincial tribute, and a variety of user fees supported an empire whose responsibilities had grown enormously. Roads connected distant provinces. Aqueducts delivered fresh water. Armies defended vast borders. Courts administered law. Public buildings, ports, and infrastructure required continual maintenance. A more complex civilization required a more diversified revenue system.

Each system looked different because each civilization looked different.

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The Pattern

Looking back across thousands of years, a pattern begins to emerge.

At first glance, this appears to be a history of taxes. I don’t think it is. It’s a history of adaptation.

Each civilization inherited different circumstances. Each faced different challenges. Each pursued different ambitions. Each asked government to perform different functions. As those responsibilities changed, so did the way public resources were raised.

Sometimes revenue systems evolved because societies were responding to new problems. Other times they evolved because societies chose to pursue new opportunities or invest in a stronger future.

In both cases, the underlying principle was the same.

Revenue systems evolved because societies evolved.

As societies evolved, so did the challenges they faced and the aspirations they pursued. I believe that may be one of the most important lessons history has to offer.

It also suggests another way of thinking about revenue systems.

Show me the challenges and aspirations of a civilization, and I’ll begin to understand why its revenue system looks the way it does.

A small trading republic will not fund itself the same way as an agricultural kingdom. An industrial nation will not rely on the same revenue system as a maritime empire. And a twenty-first-century digital economy may not be best served by a revenue system designed for the industrial age.

History doesn’t tell us what tomorrow’s revenue system should look like.

But it does remind us of something important.

Every generation inherits a different world. It should not surprise us that each generation also reexamines how it funds the things it chooses to do together.

America Inherits a Long Tradition

When the United States declared its independence in 1776, it didn’t invent the idea of raising public revenue. It inherited thousands of years of experience from civilizations that had wrestled with the same fundamental question:

How do we pay for the things we choose to do together?

The young nation, however, faced a very different set of circumstances than the great civilizations that had come before it.

America was a small republic with a relatively limited federal government. There was no Social Security, no interstate highway system, no Medicare, no air traffic control system, and no space program. Most of the responsibilities we now associate with the federal government simply did not yet exist.

It was a different America, facing a very different set of challenges.

The federal government’s responsibilities were comparatively modest. It needed to provide for national defense, conduct foreign affairs, maintain a postal system, service the national debt, and establish the basic institutions of a growing republic.

Its revenue system reflected those realities.

Rather than taxing personal income, the federal government relied primarily on tariffs - taxes on imported goods - and customs duties collected at American ports. Excise taxes on a limited number of domestically produced goods supplemented this revenue.

For the America of the late eighteenth century, this approach made a great deal of sense. The young nation was becoming an increasingly active trading economy. Imports arrived through a relatively small number of ports, making collection practical and inexpensive. Customs houses already existed, compliance was comparatively easy to enforce, and the federal government itself remained small enough that tariffs generated most of the revenue it required.

America’s first national revenue system wasn’t arbitrary.

It was thoughtfully designed for the country America had become.

Like the civilizations that came before it, the young republic built a revenue system that reflected its economy, its priorities, and the responsibilities it had chosen to undertake.

For a time, it worked remarkably well. But America would not remain the same nation forever.

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A Growing Nation

For a generation, America’s first revenue system served the young republic remarkably well.

Then the country began to change. Slowly at first. Then all at once.

During the nineteenth century, the United States grew in ways its founders could scarcely have imagined. The population expanded rapidly. New states joined the Union. Canals, railroads, and telegraphs connected distant parts of the country. Farmers moved westward, factories multiplied, and small towns became bustling cities. Commerce accelerated as the nation became larger, wealthier, and more interconnected.

America was no longer simply a small trading republic. It was becoming an industrial nation.

As the country changed, so did the questions it faced.

A growing population required more infrastructure. Expanding commerce demanded more consistent laws, financial institutions, and transportation networks. Westward expansion called for roads, bridges, ports, and other public investments. New industries created extraordinary opportunities, but also new challenges. Then came the Civil War, testing not only the nation’s resolve but also its ability to finance an unprecedented national effort.

The responsibilities of the federal government grew alongside the nation itself.

The revenue system that had served the young republic so well had never been designed for these new realities. Tariffs remained an important source of federal revenue, but they were increasingly influenced by changing patterns of trade and commerce. As more of America’s economic activity shifted from its ports to its factories, railroads, farms, and growing cities, thoughtful people began asking whether the nation’s revenue system still reflected the country America was becoming.

History was repeating a familiar pattern. America had changed. Its responsibilities had changed. Its revenue system would eventually have to change as well.

The first great test came during the Civil War.

Faced with enormous military expenses unlike anything the young republic had previously encountered, Congress enacted the nation’s first federal income tax. It was introduced not because Americans had abandoned tariffs, but because the existing revenue system was no longer sufficient to meet the extraordinary demands of preserving the Union.

Like many emergency measures, it was intended to solve an immediate problem rather than permanently reshape the nation’s finances. After the war, the income tax was allowed to expire, and the federal government once again relied primarily on tariffs and excise taxes.

But something important had happened.

For the first time, America had demonstrated that its revenue system was not fixed.

It could evolve when circumstances demanded it.

An Industrial America

By the end of the nineteenth century, the United States had become one of the fastest-growing industrial economies in the world.

Steel mills, railroads, oil companies, and manufacturing transformed the nation’s economy. Millions of immigrants arrived seeking opportunity. Cities expanded rapidly. Businesses that once served local communities now sold products across the country. Extraordinary fortunes were created, and with them came new industries, new opportunities, and new questions.

America had become a different nation.

The federal government found itself confronting responsibilities that scarcely existed when the Constitution was written. Regulating interstate commerce, improving transportation, responding to financial panics, and supporting an increasingly complex economy required resources that the nation’s original revenue system had never been designed to provide.

Tariffs remained the federal government’s primary source of revenue, but they were becoming increasingly controversial.

For decades, tariffs had served two important purposes. They generated revenue for the federal government, and they protected American manufacturers from foreign competition by making imported goods more expensive.

As America’s industrial economy matured, however, those two purposes began to pull in different directions.

Many manufacturers favored high tariffs because they reduced foreign competition and protected domestic industries. Critics, however, argued that those same tariffs often raised prices on imported goods, leaving ordinary Americans to shoulder much of the burden. Others questioned whether a rapidly industrializing nation should continue relying so heavily on taxes collected primarily at its ports rather than from the growing wealth being created within the country itself.

The conversation was changing.

The question was no longer simply whether the federal government raised enough revenue. It was whether the nation’s revenue system still reflected the country America had become.

The Gilded Age intensified that conversation.

Industrial leaders such as Carnegie, Rockefeller, Vanderbilt, and Morgan helped build an economy unlike anything the nation had previously known. Many Americans admired the innovation, investment, and prosperity these entrepreneurs helped create. Others worried about the growing concentration of wealth and the influence of increasingly powerful corporations. The popular image of the “robber baron” reflected a broader public debate about economic power, fairness, opportunity, and the responsibilities that came with extraordinary success.

Those debates naturally extended to the nation’s revenue system.

In 1894, Congress enacted the nation’s first peacetime federal income tax. It applied only to relatively high incomes, reflecting the belief that at least part of the federal government’s revenue should come from those with the greatest ability to pay rather than relying almost entirely on tariffs and excise taxes, which many believed ultimately placed more of the burden on ordinary Americans.

The experiment was short-lived.

A year later, the Supreme Court ruled that much of the new income tax was unconstitutional because it violated the Constitution’s requirements for direct taxes.

The decision did not settle the debate. If anything, it intensified it.

For nearly two decades, Americans continued discussing how a rapidly changing nation should fund an increasingly complex federal government. Eventually, supporters concluded that the Constitution itself needed to change.

In 1913, the states ratified the Sixteenth Amendment, giving Congress the authority to levy a federal income tax without apportioning it among the states.

It was a historic moment.

Not because America had finally discovered the “right” way to raise revenue.

But because the nation had once again adapted its revenue system to reflect changing economic realities, new public priorities, and an ongoing debate about where the burden of funding government should fall.

Like every generation before them, Americans were trying to build a revenue system that fit the nation they were becoming.

Some viewed the change primarily through the lens of fairness.

Others through the lens of economic growth and national progress.

Many likely saw both.

History was repeating a familiar pattern. America had changed. Its economy had changed. Its opportunities had expanded. Its challenges had become more complex.

Once again, Americans reconsidered how the nation should fund both the responsibilities it had chosen to undertake...

...and the future it hoped to build.

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The Great Depression

Just as industrialization transformed America at the turn of the twentieth century, the Great Depression transformed the nation’s understanding of economic security.

When the stock market crashed in 1929, it triggered an economic crisis unlike anything the country had experienced. Banks failed. Businesses closed. Millions of Americans lost their jobs. Families who had worked their entire lives suddenly found themselves without income, savings, or any reliable means of support.

Once again, America faced a question it had never faced before: What responsibilities should a nation assume together? The answer was not a single program or a single law, but a broader rethinking of government’s role during periods of profound economic hardship.

Among the most enduring changes was the creation of Social Security in 1935.

The program itself was significant, but its funding mechanism was equally important. Unlike the income tax, which broadened the federal government’s ability to raise revenue, Social Security paired a new national responsibility with a dedicated source of funding. Workers and employers would each contribute through payroll taxes, creating a trust fund intended to finance retirement benefits.

That decision reflected more than economics. It reflected a philosophy. President Franklin Roosevelt believed that workers who contributed directly to the system would view Social Security not as charity, but as something they had earned through a lifetime of work. Linking benefits to contributions helped build public support while reinforcing the idea that the program belonged to the American people rather than to shifting political priorities.

Whether one agrees with that design or not is almost beside the point. The larger lesson is that Americans once again distinguished between two separate questions: What should we do together? And, just as importantly, How should we pay for it?

History was repeating its familiar pattern. A new challenge led to a new responsibility, and a new responsibility led to a new funding mechanism. Like the generations before them, Americans were once again trying to build a revenue system that reflected both the nation they had become and the future they hoped to build.

A New Era

The decades following World War II brought another remarkable transformation.

The United States emerged as the world’s largest economy. The Interstate Highway System connected the nation in ways earlier generations could scarcely have imagined. Commercial aviation became routine. Americans watched astronauts walk on the moon. Computers moved from research laboratories into businesses, then into homes, and eventually into nearly every pocket.

Once again, the country had become something its founders could never have fully anticipated.

The responsibilities Americans chose to undertake evolved alongside the nation itself. Medicare and Medicaid reflected changing expectations about healthcare. The Federal Aviation Administration managed increasingly crowded skies. Investments in scientific research helped fuel decades of innovation. Environmental laws responded to growing concerns about air and water quality. As commerce became more interconnected, new responsibilities emerged in areas such as cybersecurity, digital infrastructure, and financial regulation.

The economy changed as well. Manufacturing remained important, but services became a larger share of economic activity. Information became one of the world’s most valuable resources. Financial markets grew dramatically in both size and sophistication. Transactions that once required paper certificates and days of processing could now be completed electronically in fractions of a second.

Even money itself began to change. Cash gave way to credit cards. Checks gave way to electronic payments. Banking became digital. Commerce became global. Today, trillions of dollars move through sophisticated financial systems every day, connecting investors, businesses, governments, and consumers around the world.

The nature of work has changed too. Automation has transformed manufacturing. The internet created entirely new industries. Remote work has become commonplace for many occupations. Artificial intelligence is now beginning to reshape professions once thought immune to technological disruption, while demographic changes are altering the relationship between workers, retirees, and the programs that support them.

This new era is defined not only by its challenges, but also by extraordinary opportunity. Advances in artificial intelligence, biotechnology, robotics, clean energy, and digital communication have the potential to improve lives in ways that would have seemed unimaginable only a generation ago. The same technologies that raise difficult questions also offer remarkable possibilities.

Looking back across this history, one observation stands out.

For nearly a century, America has continuously adapted its economy, its technology, its industries, and even its understanding of the responsibilities it chooses to undertake together. Yet the basic architecture of the federal revenue system has remained largely unchanged.

That observation is neither a criticism nor a conclusion. Longevity alone does not make a system obsolete. But neither does it guarantee that a system remains well matched to the world around it.

History suggests something else.

Thoughtful societies periodically step back and ask not only whether their institutions still function, but whether they are still producing the outcomes they hope to achieve.

Perhaps we have reached one of those moments again.

The Design Question

History doesn’t tell us what America’s revenue system should look like. But it does teach us how thoughtful societies have approached that question.

Throughout history, civilizations have rarely debated only what they wanted to accomplish. They also debated how to fund it. Those are related questions, but they are not the same question.

A society can reasonably debate the size of government, the priorities it chooses to pursue, and the responsibilities it asks itself to undertake. Those conversations have always been part of self-government, and they always will be. But once those decisions have been made, another question remains:

How should we pay for them?

History suggests that the strongest revenue systems were rarely accidental. They were designed to fit the realities, priorities, and aspirations of their time.

A better question is this:

What kind of revenue system best fits the nation we have become - and the future we hope to build?

That question invites us to think differently. Not in terms of political labels or ideological camps, but in terms of design.

Is the system thoughtfully designed?

Does it raise sufficient revenue to support the responsibilities we have chosen to undertake?

Does it distribute burdens in ways that reflect our values?

Does it encourage the kinds of activity we hope to see more of while discouraging harmful activity where appropriate?

Can it adapt as technology, demographics, and the economy continue to change?

And perhaps most importantly...

Is it producing the outcomes we hope to achieve?

No revenue system will ever be perfect. Every system involves trade-offs. Every system creates incentives. Every system also produces consequences, some intended and others unforeseen. That is precisely why thoughtful societies revisit their institutions from time to time - not to discard them casually, but to understand them more deeply, preserve what continues to serve them well, and improve what no longer does.

To me, that is one of history’s greatest lessons.

Every generation inherits institutions shaped by the wisdom and circumstances of those who came before. Stewardship asks something more than simply preserving them unchanged. It asks us to understand why they were created, appreciate what they accomplished, and thoughtfully prepare them for the generation that follows.

I believe America has reached one of those moments again.

The question isn’t whether our country will continue to change. History assures us that it will.

The question is whether we will approach that change with the same thoughtfulness that previous generations brought to the challenges of their own time.

If history has taught us anything, it is this:

Good systems start with better questions.

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One of the interesting things about complex systems is that, after a while, we stop noticing them. We inherit them, adapt to them, and eventually they begin to feel less like choices and more like facts. But they aren’t facts. They are the accumulated result of countless decisions made by previous generations.

Most of those decisions were made with good intentions, and many have served us well. Yet every system produces consequences, both intended and unintended. As the world changes, those consequences change with it. Good stewardship means occasionally stepping back and asking whether the systems we’ve inherited are still producing the outcomes we want.

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I think our revenue system deserves that kind of examination.

Most conversations about government revenue begin with one of two questions: Who should pay? or How much should they pay? Those are important questions. But before we answer either one, I think we should ask something even more fundamental.

What should be the foundation of our revenue system?

In other words, where should government revenue come from?

At first glance, it sounds like an accounting question. It isn’t.

It’s a question about design.

Every revenue system is designed. Whether intentionally or not, it reflects a series of choices about how government will obtain the resources it needs to operate. Those choices influence behavior, shape incentives, and ultimately produce consequences. If that’s true, then we shouldn’t judge a revenue system solely by how much money it raises or even by how fairly it distributes the burden. We should also judge it by the society it helps create.

We already understand this principle, even if we don’t always recognize it.

We tax cigarettes because we hope fewer people will smoke. We offer tax credits for children because we want to support families. We encourage charitable giving through deductions. We provide incentives for clean energy because we hope to accelerate investment in new technologies. Whether we agree with each of these policies isn’t really the point. The point is that every one of them represents a design decision. Each uses the revenue system not only to fund government but also to influence behavior in pursuit of a particular outcome.

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Earlier in this series, I wrote about trim tabs, the small control surfaces that help steer enormous ships. By themselves they seem insignificant, yet they gradually change the direction of something vastly larger. Revenue systems work in much the same way. A change in how government raises its revenue rarely transforms a country overnight. Instead, it nudges millions of individual decisions. People decide whether to work another hour, hire another employee, start a business, invest in new equipment, save for retirement, or make a charitable donation. Each decision is small, but together they shape the direction of an economy and, over time, the direction of a nation.

Consider something as ordinary as a payroll tax.

Employers and employees each contribute a percentage of wages. On the surface, it seems straightforward. Yet that one design choice reaches much farther than the Treasury. Hiring another employee becomes slightly more expensive. Some businesses hire anyway. Others wait. Workers take home a little less of each paycheck, affecting thousands of spending and saving decisions over a lifetime. Those individual choices ripple outward to businesses, communities, and eventually the broader economy.

None of those decisions changes the country by itself. But millions of them, repeated every day for years, become measurable outcomes. They influence employment, wages, business formation, household finances, and economic opportunity.

That’s how complex systems work.

The point isn’t that payroll taxes are good or bad. Every way of raising revenue has strengths, weaknesses, intended results and unintended consequences. The point is that a revenue system is a designed system, and like any designed system, it should be judged by the outcomes it produces.

Too often our debates begin by asking whether a proposal is liberal or conservative. Those questions matter in politics, but they aren’t the first questions a designer asks.

A designer asks a different question.

Is the system well designed?

A well-designed revenue system should raise enough revenue to meet the legitimate responsibilities of government. It should distribute the burden thoughtfully and fairly. It should encourage desirable activity while discouraging genuinely harmful activity where appropriate. It should be resilient enough to adapt as the economy, technology, and society evolve. And perhaps most importantly, it should consistently produce the kind of society we hope to build.

Those are the questions that interest me.

Not because I expect simple answers, but because they move the conversation beyond political labels and toward thoughtful design.

In the essays that follow, I want to use those questions as a framework. Rather than asking whether a particular source of revenue fits a political ideology, I’d rather ask whether it helps create the outcomes we want. Does it raise sufficient revenue? Does it distribute the burden thoughtfully? Does it encourage productive activity? Does it discourage harmful activity where appropriate? Can it adapt as the world changes? Does it help build the kind of society we hope to leave to future generations?

Those are design questions.

And I believe they are the questions that matter most.

Because the way government gets its revenue doesn’t simply determine how it pays today’s bills.

It helps shape tomorrow’s America.

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For the past eighteen days, I disappeared.

Intentionally.

Some people would probably say that stepping away from a new and growing Substack for more than two weeks is a mistake. The algorithm had just started noticing me, and then... silence.

Maybe they’re right.

But I don’t regret it for a second.

I have eighteen-year-old twin boys and a daughter who is nearly twenty-one. As many parents know, family vacations become harder to pull off as your children get older. Summer jobs, internships, college, camp counseling, new relationships, and all the opportunities that come with adulthood begin pulling everyone in different directions.

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When we realized we could make an eighteen-day trip work, it felt like something we couldn’t postpone. In fact, there was a quiet thought in the back of my mind throughout the planning process.

This might be our last really big family adventure before everyone begins building lives of their own.

So I made a decision. I wasn’t just going to go on the trip. I was going to be completely present for it.

No checking statistics every few hours. No worrying about whether I should be writing another essay. No wondering what the algorithm thought.

Just eighteen days with my family. Camping, hiking and exploring.

We headed west from North Carolina toward New Mexico, Arizona, Utah, and Colorado. The original plan included Albuquerque, Santa Fe, Flagstaff, Sedona, the Grand Canyon, Zion, Bryce Canyon, the San Juan Mountains, and Arches National Park.

Mother Nature had other ideas.

Extreme heat pushed temperatures near 105 degrees in some of the places we planned to camp. Then wildfires broke out near several of our intended destinations. We found ourselves constantly adjusting our route, trading one trail for another, lingering longer in cooler mountain towns, and discovering places we hadn’t originally planned to visit.

At first, it felt like our itinerary was falling apart.

By the end of the trip, I realized it had simply become a different adventure. Sometimes the best journeys aren’t the ones you plan. They’re the ones that teach you how to adapt.

Along the way we met remarkable people.

Friendly restaurant and hotel staff. Artists in Santa Fe. Knowledgeable National Park rangers. Hot Shot firefighters preparing to battle wildfires. A safflower farmer with an incredible off-road Jeep who pointed us toward beautiful hikes we never would have found ourselves. And a kind stranger who stopped to help us change a flat tire deep on a Forest Service road.

Those moments reminded me that America isn’t just a collection of spectacular places. It’s a collection of people. Good people. Generous people. Curious people. People who still help complete strangers without expecting anything in return.

We found ourselves in Albuquerque on the Fourth of July. From a high viewpoint we watched fireworks erupt across the city in every direction. It seemed as though the entire skyline had come alive.

America has felt divided lately. Sometimes discouraged. Sometimes exhausted.

Yet standing there, watching families celebrate together beneath thousands of bursts of color, I found myself thinking about something else.

This country has been through difficult seasons before.

Again and again, Americans have found ways to renew their commitment to the ideals that brought us together in the first place.

I hope this generation will do the same.

As we drove home through the mountains, I realized I hadn’t really stepped away from Unburden America at all. If anything, I understood it more clearly.

This proposal has never been just about economics. It has never been just about taxes. It has always been about stewardship.

When you love something, you take care of it. You preserve what is beautiful. You repair what is broken. You leave it better than you found it.

That’s true of our national parks. It’s true of our families. And I believe it’s true of our country.

So I’m back.

Refreshed.

Grateful.

Even more convinced that America deserves serious conversations about how we strengthen our future, reduce unnecessary burdens on ordinary families, restore our fiscal health, and leave this country stronger than we found it.

Thank you for your patience while I was away.

Now...let’s get back to work.

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One of the questions I’ve been asked most often over the past few weeks is, “Where did the idea for Unburden America come from?”

The answer surprised me when I stopped to think about it. It didn’t begin with taxes. It didn’t begin with government. It didn’t even begin with economics.

It began with a question.

Is there enough?

Several years ago I became involved with an organization called #IsThereEnough? (ITE), founded by my friend Daniel Matalon. ITE has never been only about money. We ask questions about food, water, healthcare, education, democracy, cooperation, compassion, and many other things that determine whether people and societies are able to flourish.

But money occupies a special place in those conversations because it quietly touches almost everything else.

What is money, really?

Is money the same thing as wealth?

How is money created?

Why does it so often feel like there isn’t enough?

And if there really isn’t enough, what are we going to do about it?

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One of the ideas that has always inspired our work comes from Buckminster Fuller, who wrote:

“My vision is to make the world work for 100% of humanity in the shortest possible time through spontaneous cooperation without ecological offense or the disadvantage of anyone.”

At #IsThereEnough?, we’ve adopted a shortened version of that aspiration: Making the world work for 100% of humanity.

I’ve always loved that phrase because it isn’t simply a slogan. It’s a design challenge.

It invites us to ask whether the systems we’ve inherited are the only systems possible, or whether thoughtful people working together can design something better. That has always been the spirit of #IsThereEnough? We aren’t trying to promote one answer. We’re trying to ask better questions. Sometimes those questions lead nowhere. Sometimes they uncover an old idea worth rediscovering.

And occasionally they uncover something that changes the way you look at the world.

A Different Way of Seeing

Several years ago, one of those moments arrived.

Scott A. Smith contacted Daniel to share an idea he had been developing for many years, an idea that would eventually become his book, Fixing America. Scott’s proposal was unlike anything I had encountered before. At the heart of his work was a simple but profound observation.

What we casually call “the economy” is really two very different systems performing two very different functions.

Scott referred to them as the Material Economy and the Monetary Economy. As our discussions evolved, we found ourselves preferring the term Real Economy, but the underlying insight was the same.

That distinction immediately captured my imagination. It wasn’t simply a clever way of categorizing economic activity. It changed the questions I was asking.

Once you begin looking through that lens, it’s surprisingly difficult to look at the economy the same way again.

But that was only the beginning. The more I read Scott’s work, the more I realized he wasn’t proposing one idea. He was proposing an entirely new financial architecture.

At its center was a Financial Flow Tax that would replace much of the existing tax system by collecting revenue from activity within the Monetary Economy rather than placing so much of the burden on work, production, and income.

But Scott didn’t stop there.

He also proposed what he called Banking 2.0, a fundamental rethinking of how banking itself might operate. Rather than relying primarily on commercial banks to create interest-bearing credit from customer deposits, Scott envisioned a system in which deposits would reside safely within the Federal Reserve, banks would increasingly become financial service providers and lending specialists, and much of the capital used for lending would originate through the central banking system. In his vision, the cost of credit could fall dramatically while specialized institutions focused on financing entrepreneurs, infrastructure, community development, scientific innovation, and other productive investments.

His proposal then went even further.

Scott described how the resulting public revenue might be used to eliminate the national debt, replace most existing taxes, and fund a wide range of national priorities.

Whether one agrees with every aspect of his vision or not, one thing is undeniable.

It is an extraordinarily ambitious proposal.

I loved it.

Not because I immediately agreed with every conclusion, but because Scott handed me something even more valuable than a proposal.

He handed me a different way of looking at the world.

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At #IsThereEnough?, however, enthusiasm never marks the end of the conversation. It’s the beginning. Whenever we encounter an idea that feels promising, our instinct isn’t to ask, “How quickly can we promote this?”

It’s to ask something much more important.

“How well do we understand it?”

Could it work? What assumptions is it built upon? Which parts seem especially strong? Where might unintended consequences emerge? What evidence supports it? And, perhaps most importantly...

What are we still missing?

Over the months and years that followed, those conversations became some of the most interesting discussions I’ve ever been part of. The goal wasn’t to defend Scott’s proposal. The goal was to understand it.

And somewhere along the way, something unexpected happened.

The proposal itself began changing my way of thinking. Not because I accepted every conclusion. But because I started seeing the system differently.

That, I’ve come to believe, is how systems change actually begins.

Not with solutions. With understanding.

Finding the Greatest Leverage

As I continued living with Scott’s ideas, discussing them with Daniel and others at #IsThereEnough?, and returning to them over months and years, my thinking didn’t move away from Scott’s proposal. It moved deeper into it.

The more I understood what he was trying to accomplish, the more I realized he was inviting us into several different conversations at once. There was the question of taxation, the question of banking, the question of public spending, the question of the national debt, and ultimately the broader question of what kind of society we hope to build.

Each of those conversations deserved attention. Each could have become a book in its own right. As fascinating as I found them, I gradually realized that I wanted to separate them—not because they weren’t connected, but because I wanted to understand each one on its own merits before trying to solve them all together.

Looking back, I think that was one of the most important turning points in my own thinking.

Instead of asking, How do we redesign the entire system?, I found myself asking a much simpler question:

Where is the greatest leverage?

Buckminster Fuller often spoke about the power of a trim tab, the tiny rudder on the back of a ship’s main rudder that allows a relatively small force to change the direction of something much larger. I began wondering whether economies might have trim tabs too.

If we could improve just one important part of the system, where would it be?

Could we identify a better place to raise at least part of the revenue our nation needs?

Could we reduce the burden carried by workers and productive businesses without compromising the essential functioning of financial markets?

Could one carefully designed change create the fiscal capacity to solve problems that currently seem beyond our reach?

Those questions slowly became the foundation of Unburden America.

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What emerged wasn’t a competing vision to Scott’s work. In many ways, it was a deeper exploration of one particular thread running through it. Rather than trying to redesign banking, taxation, public finance, and the broader role of government all at once, I became increasingly interested in whether one piece of that larger vision could stand on its own. Could a carefully designed settlement levy be introduced gradually, tested honestly, adjusted where necessary, and evaluated on its own merits? That felt like a more durable place to begin.

As my thinking evolved, another distinction also became clearer.

Creating additional public revenue and deciding how to spend that revenue are closely related conversations, but they are not the same conversation. I certainly have my own views about where America should invest if we succeed in creating greater fiscal capacity. Those ideas belong to another conversation—one I will likely write about in the future.

Over time, however, I became convinced that keeping those conversations separate actually strengthens this proposal.

One reason is practical. The moment we begin debating every downstream investment—healthcare, education, infrastructure, climate, defense, or any number of other priorities—we often retreat to our familiar political corners. Before long, we find ourselves arguing about everything at once.

At #IsThereEnough?, we’ve learned to begin somewhere else.

We try to start with agreement.

Only after we’ve found common ground do we explore where our differences begin.

I believe Unburden America should follow that same principle.

Whether someone leans conservative, progressive, libertarian, or somewhere in between, we can at least ask whether the way we currently raise public revenue places too much burden on work, production, and ordinary families. We can ask whether America would benefit from greater fiscal capacity. We can ask whether chronic deficits and an ever-growing national debt leave the country stronger or weaker.

Those are questions that invite people into the conversation rather than pushing them into opposing camps.

That is why one principle has gradually moved to the center of my own thinking.

The first purpose of new revenue should be to repair the damage caused by the current system.

Before we create new commitments, we should first relieve unnecessary burdens. We should reduce the tax burden on work and productive enterprise, begin restoring America’s fiscal health, and slow—ultimately reversing—the relentless growth of the national debt. In doing so, we also rebuild something we have been steadily losing: the fiscal capacity to invest confidently in whatever future Americans ultimately choose together.

Only after we address that foundation should we move into the larger democratic conversation about what comes next. Those debates matter deeply, and I look forward to participating in them. But they are different debates, and I believe they’ll be healthier if we enter them from a position of greater financial strength rather than perpetual scarcity.

Looking back now, I don’t think Unburden America emerged because I discovered a brilliant new idea. It emerged because I kept asking questions. Some ideas became stronger. Others became simpler. A few were left behind. Many are still evolving.

That doesn’t make the proposal weaker.

If anything, I believe it makes it stronger.

Every serious idea begins as a question. It grows through observation, criticism, testing, and refinement. That’s how science advances. It’s how engineering advances. And I believe it is how good public policy should advance as well.

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So Unburden America is still evolving, and I hope it always retains that spirit—not because I lack confidence in its direction, but because I have confidence in the process.

The goal has never been to defend a proposal at all costs.

The goal has always been to understand our systems as truthfully as we can, to follow the evidence wherever it leads, and to keep improving our thinking as we learn more.

In the end, this story isn’t really about Scott.

Or Daniel.

Or me.

It’s about the journey every worthwhile idea must take.

Someone asks a question.

Someone offers a new way of seeing.

Others test it.

Challenge it.

Refine it.

Build upon it.

That isn’t a weakness.

It’s how understanding grows.

And perhaps that’s the real answer to the question that started this essay.

Where did Unburden America come from?

It began with a question.

Is there enough?

And if there is...

how do we build a country where every person has a better opportunity to flourish?

PS - If you are following this Substack, thank you! Please consider subscribing (it’s free) and it means you’ll never miss a post! And please restack or share if you know someone who might appreciate this content!

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Over the past several weeks, a growing number of people have joined this conversation. First, welcome.

Since launching Unburden America in early May, these posts have unfolded less like a collection of essays and more like chapters in a story. Each post built on the one before it. Each question led to another question. And along the way, what began as a simple observation turned into a much larger exploration.

If you’ve arrived recently, you may be wondering what exactly Unburden America is, how we got here, and why these ideas seem to be resonating with people.

This post is my attempt to answer those questions.

It’s also designed to be shared. If you’ve wanted a simple way to introduce someone to the conversation without asking them to read fourteen previous posts, this may be the place to start.

So let’s begin where the series began.

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We Started With a Feeling

The first posts in this series were not really about economics.

They were about a feeling.

A feeling that something wasn’t working.

Not in the abstract. Not on a spreadsheet. In everyday life.

Millions of Americans feel like life has become harder than it should be. Housing is more expensive. Healthcare is more expensive. Childcare is more expensive. Education is more expensive. Even ordinary necessities seem to consume a growing share of household income.

People are working hard, yet many feel as though they are running faster just to stay in place.

For many families, the American Dream hasn’t disappeared.

It has simply drifted farther away.

The things that once seemed attainable through steady work and responsible choices now feel increasingly difficult to reach. A first home. A growing family. A modest savings account. A little breathing room.

Not luxury. Not excess. Just the sense that effort should lead somewhere.

The data tells a similar story. Large numbers of Americans report that they are struggling to cover unexpected expenses, living paycheck to paycheck, or feeling financially stressed despite working and earning an income.

When enough people begin experiencing the same pressures at the same time, it becomes difficult to dismiss those experiences as individual failures.

Something larger seems to be happening.

That realization led to one of the earliest ideas in this series: survival mode.

When individuals and families spend most of their energy simply trying to make it through the month, long-term thinking becomes more difficult. Attention is pulled toward immediate needs. Building gives way to coping. Hope becomes harder to sustain.

Many readers responded strongly to those early posts because they recognized themselves in them.

The first message of Unburden America was simple:

You’re not crazy. America really has changed.

Many of the pressures you’re feeling are real.

Then We Asked a Different Question

Once we acknowledged the burden, another question emerged.

Is there enough?

Most political conversations begin with some version of scarcity.

There isn’t enough money.

There isn’t enough housing.

There isn’t enough opportunity.

There isn’t enough to go around.

And if there isn’t enough, then difficult choices follow. Someone must lose. Someone must sacrifice. Someone must be blamed.

But I found myself wondering whether we were asking the right question.

What if some of our challenges are not caused by a lack of resources?

What if they are caused by a misunderstanding of the system itself? Or by the assumption that the systems we inherited are simply the way things have to be?

And perhaps most importantly:

What if there is enough?

That question changes the direction of the series.

Because if there is enough, then the next question becomes obvious.

Where is it?

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Looking Beneath the Surface

That inquiry eventually led me to an idea I first encountered through the work of Scott A. Smith and others who have explored the distinction between what we call the Real Economy and the Monetary Economy.

The idea immediately caught my attention because it offered a different lens through which to view many of the challenges we had been discussing.

The Real Economy is where life happens.

It is the world of homes and neighborhoods, farms and factories, schools and hospitals, workers and businesses. It is the food we eat, the homes we live in, the roads we drive on, the services we depend upon, and the goods that support our daily lives.

It is where our standard of living comes from.

The Monetary Economy serves a different function. At its best, it helps coordinate, finance, and support activity in the Real Economy. It is the world of financial markets, securities, banking systems, clearing systems, settlement networks, and the movement of money itself.

Both economies matter. Both perform important functions. Both depend upon one another.

But they do not operate at the same scale.

Over the past several decades, the growth of the Monetary Economy has dramatically outpaced the growth of the Real Economy.

One image that resonated with many readers compared the relationship to a ping pong ball and a basketball. The comparison is obviously imperfect, but it captures something important. The difference is not merely large. It is difficult for most people to intuitively grasp.

That observation became a turning point.

Not because it provided answers.

Because it raised new questions.

If the Real Economy is where our standard of living is created, then we should want it to be healthy, productive, resilient, and growing. A stronger Real Economy means more opportunity, greater security, and a more prosperous society.

Yet most of the fiscal burden of government is placed there. We tax wages, earnings, production, consumption, and productive enterprise. In other words, we ask the economy that produces our standard of living to carry most of the load.

Once I saw that, I couldn’t unsee it.

We are asking the smaller system to carry nearly the entire fiscal burden while largely ignoring the much larger system operating alongside it.

That didn’t prove anything. But it raised a question that seemed worth exploring. Whether that is the best approach and how we might shift that burden.

Because if the Monetary Economy operates at a vastly larger scale, perhaps there are opportunities hiding in plain sight.

That realization eventually led to the central idea behind the Unburden America proposal.

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Following the Question

Once we began exploring the Monetary Economy, another question emerged.

If enormous volumes of money are already moving through financial settlement systems, could a very small levy applied at that level help reduce burdens elsewhere in the economy?

That question became the foundation of the Unburden America proposal.

The proposal explores whether a tiny settlement infrastructure toll could help shift part of the nation’s fiscal burden away from work, wages, families, and productive enterprise.

The ultimate goal is not simply to raise revenue.

The goal is to create fiscal room. Room to reduce burdens on ordinary Americans. Room to move beyond chronic fiscal deficits. Room to begin addressing a national debt that now requires roughly a trillion dollars in annual interest payments every year. And room to invest in the people, infrastructure, education, research, and communities that help a nation thrive.

In other words, the proposal is not really about collecting money.

It is about expanding possibility.

Unlike many previously proposed financial transaction taxes, the proposal focuses on cash settlement activity rather than taxing the notional value of financial contracts themselves.

From the beginning, we recognized that any proposal like this would need to be implemented carefully. Market-making, liquidity provision, hedging activity, and other essential financial functions would require thoughtful consideration.

The goal is not to disrupt the plumbing of the financial system, but to understand where a modest contribution might be possible without impairing its essential functions.

Just as importantly, any serious proposal would require testing. Rates could begin at very low levels, behavioral responses could be measured, and adjustments could be made based on real-world results rather than assumptions.

We have started with the working theory that rates near 0.1% — just pennies collected from each $100 moving through the system — could be tolerated by markets while generating significant revenue.

What makes the idea intriguing is that even after accounting for behavioral changes, exemptions, and market adaptation, the remaining settlement activity would likely still be measured in the quadrillions of dollars.

If that proves true, even very small rates could potentially produce meaningful results.

The exact rates, exemptions, and sequencing are not set yet. We continue to gather additional information, expert feedback, and critical analysis as the proposal evolves.

Creating in Public

One thing worth mentioning is that Unburden America is still a young idea.

The observations in this series are not a finished blueprint. They are an evolving thesis.

Some conclusions feel increasingly solid. Americans are carrying real burdens. Affordability has become more challenging. Debt is playing a larger role in household survival. The Monetary Economy operates at a dramatically different scale than the Real Economy. And today, most of the nation’s fiscal burden is carried by activity occurring in the Real Economy.

Those observations are what started this journey.

Where the journey ultimately leads continues to evolve.

The proposal discussed throughout this series is best understood as an initial attempt to explore what solutions might become possible once we begin looking at the system differently.

We are building in public.

That means some ideas will strengthen. Some assumptions will be refined. Some questions will take longer to answer than we expected.

That’s okay. In fact, that is how serious ideas are developed.

We operate with humility, but also with the belief that there is value in getting to Version 1. A first draft allows us to discover strengths, expose weaknesses, gather feedback, and improve the idea.

We continue to welcome expert input, thoughtful criticism, and new information.

The goal is not to defend a theory at all costs. The goal is to follow the evidence wherever it leads.

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What Unburden America Really Means

Despite all the discussion about taxes, debt, deficits, and financial systems, Unburden America is not ultimately about a tax proposal.

It is about people.

It is about helping people move beyond survival mode and reclaim the ability to thrive, build, create, save, contribute, and dream again.

Our proposal is one possible tool toward that goal.

If successful, a proposal like this could do more than reduce taxes for ordinary Americans. It could help create fiscal room where little currently exists. It could help reduce chronic deficits, begin addressing the growing cost of servicing the national debt, and restore our ability to invest in the things that make a nation stronger: infrastructure, education, research, innovation, strong communities, and support for families.

But none of those things are the movement itself.

The movement is people.

For a long time we have been told a story that says society is little more than a competition. Survival of the fittest. Dog eat dog. Winner take all.

I don’t believe that story.

What I see instead is something else beginning to emerge.

I see Michael working to address hunger.

I see Christine challenging the wage gap.

I see Joe advocating for political transformation.

I see Quy exploring tax reform and countless other ideas.

I see James asking religion to remember its deepest teachings.

I see Art teaching resilience.

I see Susan challenging economic myths.

I see Paul fighting for democracy.

I see Danjis reminding us about generosity.

I see Midrata examining debt and interest.

And countless others tackling problems large and small.

I see connectors and web builders. Artists reminding us of beauty. Community builders creating belonging. Justice advocates. Researchers. Educators. Entrepreneurs. Local leaders. People building platforms, coalitions, and new forms of cooperation.

And I see ordinary citizens paying attention, sharing ideas, signing petitions, volunteering, donating, organizing, voting, and showing up.

In other words, I see people refusing to give up on one another.

That gives me hope.

Because meaningful change has never come from one person, one policy, or one election. It comes from millions of people deciding that the future can be better than the present and then doing the work required to make it so.

Let a thousand flowers bloom.

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Where We Go From Here

America’s challenges were not created overnight.

They will not be solved overnight either.

But I believe we are living through one of those moments when old assumptions are being questioned and new possibilities are beginning to emerge.

Unburden America is not a movement built around blame. It is a movement built around responsibility. Responsibility to understand our systems, improve them, and leave them better than we found them.

People are searching for better answers. New ideas. New coalitions. New ways of understanding the challenges we face.

My hope is that Unburden America can be one small part of that larger effort.

A place where we ask better questions. Look honestly at systems. Follow the evidence. And remain open to solutions that may not fit neatly into existing political categories.

Most importantly, I hope it becomes a place where people who care about the future can find one another.

Because the more people actively engaged in building a stronger, healthier, and more prosperous society, the more likely we are to succeed.

If you’ve made it this far, thank you for being part of the conversation.

Stay with us. Participate. Challenge ideas. Offer feedback. Share what resonates.

Build something in your own corner of the world.

You may be joining something small. Or you may be joining something that becomes an important catalyst for change.

Either way, every movement begins with a conversation.

And every conversation begins with people willing to imagine that a better future is possible.

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One of the things I’ve tried hard to do throughout this series is avoid creating villains.

That may sound strange in a time when so much of our politics revolves around assigning blame. Everywhere we look, someone is being told who is responsible for their problems. Depending on who you ask, the villains are the wealthy, the poor, corporations, government, immigrants, elites, bureaucrats, Wall Street, Main Street, or some combination of all of the above.

The stories change. The targets change. The anger remains.

I understand the appeal. If our problems were caused by a handful of bad actors, the solution would be simple. Find the villains, defeat them, and everything gets better.

But life rarely works that way.

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Years ago, in one of my work environments, there was a saying that stuck with me:

Don’t look for who to blame. Look to the system.

If a salesperson made a costly mistake, the first question wasn’t, “Who messed up?” The better question was, “What allowed this to happen?”

Was there a clear policy? Was there a review process? Were the incentives aligned? Did people have the information they needed to make good decisions?

Sometimes a person made a mistake. But often, the deeper problem was that the system itself had gaps that made mistakes more likely.

That way of thinking changed how I looked at problems.

And increasingly, it has changed how I think about America.

Over the past several posts, we’ve talked about affordability, wages, debt, and the growing financial pressure many Americans feel. We explored how millions of people are finding themselves trapped in a cycle where more and more of their energy is spent simply keeping up. We talked about survival mode and how difficult it becomes to think about wealth building and the future when you’re struggling to make it through the present.

Those burdens are real.

But if we’re serious about addressing them, we have to ask an important question:

How did we get here?

Not because we’re looking for someone to punish. Because we’re looking for something to improve.

Many of the challenges we face today are not the result of a single decision or a single group of people. They are the accumulated result of thousands of decisions made over decades. Policies. Incentives. Assumptions. Economic structures. Historical choices that seemed reasonable at the time, but which produced consequences that weren’t always obvious until years later.

History is still acting on us.

The systems we inherited continue to shape the choices available to us today. That doesn’t mean we are powerless. Quite the opposite. It means that if systems helped create our current reality, systems can help create a different future.

Buckminster Fuller spent much of his life thinking about exactly this problem. One of his most famous observations was:

You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.

Whether Fuller said those exact words or not, the idea captures something important. Lasting change rarely comes from winning a fight. It comes from creating something that works better.

Fuller also loved the idea of a trimtab.

A trimtab is a small control surface attached to the rudder of a large ship. On its own, it seems insignificant. Yet when the trimtab moves, it helps turn the rudder. The rudder turns the ship. And eventually a vessel weighing thousands of tons changes course.

A small adjustment. A large result.

I’ve been thinking about trimtabs a lot lately.

Because I don’t believe America’s problems will be solved by one law, one election, one party, or one leader. I think they will be solved by thousands of people identifying leverage points within systems and making thoughtful improvements.

Some will focus on housing. Others on education. Others on health care. Others on local economies, tax policy, community building, civic renewal, or financial reform.

Different people working on different parts of the same challenge. Not tearing everything down. Not blaming each other.

Changing course.

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This is also why I’ve spent time introducing the Unburden America tax proposal throughout this series. Whether you ultimately agree with it or not, it is an example of systems thinking.

But systems thinking requires something else as well.

It requires a willingness to examine reality carefully, honestly, and sometimes differently than we have before.

Sometimes the greatest obstacle to solving a problem is not a lack of effort or good intentions. Sometimes it is an incomplete understanding of how the system actually works.

If we misunderstand the structure of a system, we tend to look for solutions in the wrong places. We treat symptoms rather than causes. We pull harder on one lever while the real leverage point sits somewhere else entirely.

That is one reason I spent time exploring the distinction between the Real Economy and the Monetary Economy in earlier posts.

At first glance, they appear to be the same thing. Most of us use the word economy to describe everything from jobs and wages to financial markets and monetary flows. But when we look more closely, we discover that these are related systems operating in different ways and at very different scales.

And once that distinction becomes visible, something interesting happens.

The potential solution begins to reveal itself.

The Unburden America proposal did not emerge from ideology. It emerged from examining the system as truthfully as possible and asking a simple question:

Where does the money actually move?

The answer points directly to the settlement infrastructure of the Monetary Economy, where enormous volumes of transactions already pass through existing systems every day.

That insight, in turn, suggests a place where a very small adjustment might produce a much larger result.

The proposal focuses on a tiny levy applied at the point of financial settlement, where enormous volumes of monetary transactions already pass through existing infrastructure. If implemented carefully, the revenue could be used to reduce burdens elsewhere in the system.

The details matter. The sequencing matters. The incentives matter. Because good systems design is rarely about dramatic gestures. It’s about disciplined implementation.

It’s about understanding how one change affects everything connected to it.

In many ways, understanding the system is what illuminates the trimtab.

That may not be as emotionally satisfying as finding someone to blame. But I suspect it’s how real progress happens. A ship changes course because someone understands the system well enough to move the trimtab.

America may not need more villains. It may need more builders. More problem-solvers. More people willing to look beneath the surface, understand the systems we inherited, and patiently create better ones.

That’s a slower story than the one we’re usually told.

But it might also be a more hopeful one.

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A few posts ago, I wrote about affordability and how difficult ordinary life has become for many Americans. In my last post, I explored Buckminster Fuller’s idea that wealth is not simply how much money we possess, but our ability to sustain our lives into the future.

This week, I want to talk about debt.

Debt is one of those subjects that often gets reduced to numbers: interest rates, balances, monthly payments, and credit scores. Those things matter, but debt is also something people feel.

For many Americans, debt is not an abstract financial concept. It is a daily companion. It rides along to work. It sits uninvited at the dinner table. It shows up when the mail arrives and when the credit card bill comes due. It is often the first thing people think about when they wake up and the last thing they think about before falling asleep.

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The Hidden Cost of Debt

Debt has weight.

Not a physical weight, of course, but an emotional one.

Imagine trying to build a house on a piece of land with a giant hole in it. Every truckload of dirt you bring to the site disappears into the hole. A raise disappears. A tax refund disappears. An overtime shift disappears.

The money is not wasted. The hole is getting smaller. But from your perspective, it can feel as though no progress is being made because before you can build anything, you have to fill the hole.

For many people, debt feels exactly like that.

Before they can save for a home, they have to pay down debt. Before they can invest, they have to pay down debt. Before they can start a business, build an emergency fund, or pursue new opportunities, they have to pay down debt.

The challenge is that debt itself is not necessarily bad.

Throughout history, people have borrowed money to buy homes, start businesses, and pursue education. In many cases, debt can be a useful tool. A mortgage allows a family to purchase a home years before they could otherwise afford one. A business loan can help an entrepreneur build something of value. Some forms of debt can help create wealth.

But debt always comes with a cost.

At its most basic level, debt is borrowing from the future. It allows us to bring future resources into the present. Sometimes that is a wise decision. Sometimes it is a necessary one. Either way, future income has been committed before it arrives.

That reality becomes especially clear when we look at interest.

Consider a $300,000 home purchased with a 20% down payment. The buyer finances $240,000 through a thirty-year mortgage. At today’s interest rates, the monthly principal and interest payment would be roughly $1,500 per month. Over the life of the loan, the homeowner would pay more than $300,000 in interest alone.

Debt is expensive.

And yet mortgages are often considered “good debt” because an asset is being acquired in the process. The homeowner is building equity while making payments.

Not all debt works that way.

Today, the average credit card interest rate exceeds 20 percent. Many borrowers pay significantly more. Unlike a mortgage, there is often no appreciating asset on the other side of the transaction. People may be financing groceries, utilities, medical bills, childcare, or unexpected emergencies.

That distinction matters.

Some debt helps people build wealth.

Some debt is a symptom of not having enough wealth.

And increasingly, many Americans are finding themselves in the second category.

When the Math Changed

In the last post, I wrote about Buckminster Fuller’s definition of wealth as our ability to sustain our lives into the future. The more I think about that idea, the more useful it becomes.

If wealth extends our future options, debt often narrows them.

A person with savings has choices. A person carrying significant debt may spend years trying to reclaim choices they once had.

This is especially true when debt becomes a survival strategy rather than a wealth-building strategy.

For millions of Americans, debt is no longer primarily about buying homes, building businesses, or investing in the future. It is increasingly about bridging the gap between income and expenses. Household debt in the United States now exceeds $18 trillion. Credit card balances have reached record levels, and many borrowers are paying interest rates above 20 percent.

Those numbers matter.

But what matters even more is what those numbers represent.

Behind every balance is a story. A car that had to be repaired so someone could get to work. A medical bill that arrived unexpectedly. A childcare payment that could not wait. Groceries that had to be purchased before the next paycheck arrived.

At this point, some readers may be thinking: Why don’t people simply live within their means?

It’s a fair question.

Certainly some debt is the result of poor decisions. Human beings are imperfect, and all of us have made financial mistakes at one time or another.

But that explanation does not account for what millions of Americans are experiencing today.

Many people did build lives that matched their means. Then the math changed.

They found jobs. They rented apartments they could afford. They bought modest homes. They filled ordinary grocery carts. They budgeted. They worked.

Then housing costs rose. Healthcare costs rose. Childcare costs rose. Insurance costs rose. Groceries cost more.

The same job that once covered the bills no longer stretched as far as it used to.

The same life suddenly cost more.

For many families, debt did not appear because they abandoned financial responsibility. Debt appeared because the gap between income and expenses widened.

And for young people just starting out, the challenge can feel even more daunting. Many are confronting a financial reality in which housing, education, transportation, and other necessities consume a much larger share of income than they did for previous generations.

To many young adults, the numbers simply don’t seem to work.

When the cost of ordinary life rises faster than wages, debt often becomes the bridge between what life costs and what people can afford.

Most people do not wake up one morning and decide they would like to accumulate debt. More often, debt arrives one decision at a time, one emergency at a time, one difficult tradeoff at a time.

And once it arrives, it has a way of demanding attention.

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The Weight of the Future

Debt doesn’t just take money. It takes attention. It takes options. It takes peace of mind.

That burden can be difficult to understand unless you have carried it yourself. Debt creates stress. It creates anxiety. It can create shame and embarrassment. People often feel as though they have failed somehow, even when the circumstances that led to the debt were largely beyond their control.

The emotional burden is real. So is the cognitive burden.

When people are worried about making rent, paying the electric bill, or keeping up with minimum payments, they are devoting mental energy to survival. It becomes harder to think long term. Harder to take risks. Harder to invest in the future.

In the last post, I wrote that survival mode has a way of crowding out wealth building.

Debt is often one of the reasons.

When every extra dollar goes toward paying off yesterday’s obligations, there is less available for tomorrow’s opportunities. The hole has to be filled before the house can be built.

This may help explain why debt burdens feel so different across income levels. Higher-income households often carry larger debts in absolute dollars, but much of that debt is attached to assets such as homes, businesses, or investments. Lower-income households often carry smaller balances, but those balances represent a much larger share of income and are more likely to be associated with everyday living expenses.

Two households may both be in debt, but they are not necessarily experiencing debt in the same way.

One household may be building wealth.

Another may simply be trying to stay afloat.

That distinction matters.

If debt is increasingly being used to compensate for rising housing costs, rising healthcare costs, rising childcare costs, and rising education costs, then debt is not merely a personal finance issue. It is also a symptom of larger economic pressures.

It is one more thread connecting affordability, wealth, and opportunity.

And perhaps that is why debt deserves to be viewed as more than a balance sheet problem.

Debt shapes how people feel. It shapes how they plan. It shapes what risks they can take and what opportunities they can pursue.

It shapes the future.

Interestingly, some of these same ideas appear when we begin talking about nations. Countries can also make promises against future income. Countries can also borrow. Countries can also find themselves paying substantial amounts of interest. And just like families, nations may find that resources committed to servicing old obligations are no longer available for new opportunities.

That is a much larger conversation, and one we will explore another day.

For now, it is enough to recognize that debt is about more than money.

It is about time.

It is about choices.

It is about possibility.

And for many Americans, it is about the difficult challenge of trying to build a future while carrying the weight of the past.

Let’s Unburden America.

Over the past five years, I have been involved with an organization called #IsThereEnough?

At first glance, it seems like a simple question. Is there enough?

Enough food? Enough water? Enough energy? Enough innovation? Enough compassion? Enough opportunity? Enough money?

What fascinated me wasn’t just the question itself. It was the follow-up question: What are we going to do about it if the answer is no?

That question appealed to something deep in my nature. I have always been a problem solver. If there isn’t enough of something important, I want to understand why. More importantly, I want to understand what can be done about it.

One of the things I appreciate most about the #IsThereEnough? community is that the question is never left vague or abstract. The same framework can be applied to almost anything. Is there enough food? Is there enough housing? Is there enough healthcare? Is there enough opportunity?

Over time, however, one topic seemed to surface again and again: money.

What is it? How is it created? How does it move through society? Who has access to it? And perhaps most importantly, what role should it play in our lives?

Those conversations eventually led me to the work of Scott A. Smith, the concept of the Two Economies, and the idea that we may be overlooking some of the largest financial flows in the modern economy. Those ideas have shaped much of the thinking behind this Substack and the Unburden America proposal we have been exploring together. There is much more to say about those ideas, and we will return to them often.

But before we go any further, there is another concept that may be even more foundational: Money and wealth are not the same thing.

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A Different Definition of Wealth

At first, that statement may seem obvious. Yet much of our public conversation treats money and wealth as if they are interchangeable. We talk about wealthy individuals and immediately think about money. When we think about wealthy nations we imagine large economies, high incomes, and financial assets.

But what if wealth is something larger than that? What if money is only one form of wealth?

One of the people who helped me think differently about this question was Buckminster Fuller. Fuller was an inventor, architect, systems thinker, and futurist who spent much of his life exploring how humanity might create a world that works for everyone. Among his many ideas was a surprisingly practical definition of wealth.

He suggested that wealth is your standard of living multiplied by the number of days forward you can sustain it.

The first time I encountered that definition, it stopped me in my tracks.

Imagine that it costs me about $4,500 per month to maintain my current standard of living. That includes housing, food, utilities, transportation, insurance, healthcare, and other ordinary expenses.

Now imagine that my income suddenly stops. Perhaps I lose my job. Perhaps an illness prevents me from working. The reason doesn’t really matter.

What matters is how long I can continue supporting my current standard of living.

• If I have $4,500 in savings, I am roughly one month wealthy.

• If I have $9,000 saved, I am roughly two months wealthy.

• If I have $27,000 saved, I am roughly six months wealthy.

Wealth is not simply how much money we possess. Wealth is how long we can sustain our lives.

And then the idea becomes even more interesting.

What if I have:

• a productive garden and a freezer full of food?

• a second vehicle or another asset that I could sell if necessary?

• family members willing to help me through a difficult period?

• valuable skills that make it easier to find another job?

• an excellent credit score and access to temporary borrowing if I need it?

None of those things are money.

Yet every one of them extends my ability to sustain my standard of living into the future. In other words, every one of them increases my wealth.

The more I explored this idea, the more I began to see wealth everywhere. Not just in bank accounts, but in homes, skills, education, relationships, health, knowledge, tools, reputation, community, and opportunity.

Money matters. It matters a great deal. But money is only one form of wealth.

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Affordability and Wealth

That understanding helped me think differently about the affordability crisis we explored in the last post.

When rent rises, insurance rises, grocery bills rise, or healthcare costs rise, people are not simply experiencing higher prices. They are experiencing a reduction in wealth.

Imagine again that I need $4,500 per month to sustain my standard of living and I have $9,000 in savings.

If my monthly expenses suddenly rise to $6,000, my bank account hasn’t changed. Yet my financial runway has shortened dramatically.

Without losing a single dollar, I have become less wealthy. My safety margin has shrunk. My ability to absorb a setback has declined. My future feels less secure. Perhaps that helps explain some of the stress so many people are feeling today.

When costs rise unexpectedly, people don’t just lose purchasing power. They lose wealth.

The affordability crisis is not only about prices. It is also about the erosion of resilience, the erosion of security, and the erosion of the buffer between stability and crisis.

The challenge is that economic strain doesn’t just erode the wealth we already have. It can also make it much harder to build new wealth.

When people are financially secure, they have options. They can save money, invest in a business, take classes that improve their skills, move to a better opportunity, or take risks that may pay off later. When people are struggling to make ends meet, those same choices become much harder. The money that might have gone into savings goes toward rent. The time that might have been spent earning a degree or learning a new skill gets consumed by a second job. The dream of starting a business gets postponed because the bills have to be paid first.

Survival mode has a way of crowding out wealth building.

There is another irony here. Many of the things that help people build wealth are the very things that have become more difficult to afford.

Homeownership has long been one of the primary ways families build wealth, yet housing costs have risen dramatically. Education can increase earning potential and expand opportunities, yet tuition costs have climbed far faster than inflation.

Even childcare illustrates the challenge. Reliable childcare can help parents remain in the workforce, develop professionally, and increase future earnings. Yet when childcare costs become too high, some families face difficult tradeoffs. A parent may choose to leave the workforce because it makes sense in the short term while sacrificing opportunities for career growth, experience, and future income.

In other words, rising costs do not simply strain household budgets. They can make it harder to access the very tools that help people build wealth in the first place.

Many of the things that help people build wealth are the very things that have become more difficult to afford.

Building Wealth

We often focus on income because income is easy to measure. Wealth is broader than income. It includes the things that provide resilience, flexibility, and future capacity.

A home, an education, good health, strong relationships, a trusted reputation, practical skills, and even having enough time to think, plan, and learn all contribute to our ability to thrive in the future.

The more broadly we define wealth, the more we begin to see how it can be created, strengthened, neglected, or lost.

Homes require maintenance. Skills require practice. Relationships require care. Communities require trust. None of these things remain valuable automatically. They are built over time, strengthened through investment, and weakened through neglect.

Wealth is not static. It is something we build and maintain.

Interestingly, Fuller’s definition of wealth scales remarkably well. Just as individuals and families can build wealth, so can communities and nations.

A nation builds wealth when it educates its people, maintains its infrastructure, invests in research, supports innovation, and creates the conditions for productive activity. It can also consume wealth without replacing it. Roads deteriorate. Bridges age. Skills become outdated. Research goes unfunded. Institutions weaken. Opportunities disappear.

That is a much larger conversation, and one we will return to in future posts.

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What Kind of Wealth Are We Trying to Build?

If money and wealth are not the same thing, then what kind of wealth are we trying to build? For ourselves, our families, our communities, and our country?

The answer matters because it changes how we think about prosperity.

If prosperity is the ability to sustain and improve our lives over time, then money becomes only one part of a much larger picture.

The goal becomes building the assets, skills, relationships, institutions, and opportunities that allow people and communities to thrive.

The longer I have explored the question “Is there enough?”, the more I have come to believe that the answer depends partly on how we define wealth.

If wealth is only money, the future can look surprisingly scarce.

But if wealth also includes our skills, relationships, health, knowledge, institutions, infrastructure, creativity, and capacity to solve problems together, then the picture becomes much larger.

Money matters.

It matters a great deal.

But money is not the same as wealth.

And understanding the difference may be one of the most important steps toward building a more prosperous future.

Let’s Unburden America.

It’s graduation season.

Like many parents, I’ve spent the past few months celebrating young people as they move into the next chapters of their lives. Some are heading to college. Some are entering the workforce. Some are trying to figure out what comes next.

It’s an exciting time. It’s also an expensive one.

Conversations that should be filled with possibility often turn quickly toward practical concerns: tuition, housing, insurance, car payments, groceries, and gas. Even for young people doing everything “right,” there is often an undercurrent of uncertainty.

Will I be able to afford a home someday?

Can I raise a family?

Will I ever get out from under student debt?

What happens if I get sick?

Can I build a stable life?

What strikes me is that the anxiety isn’t limited to struggling families. I hear it from young people with scholarships, degrees, good jobs, and supportive parents. I hear it from middle-class families trying to help their children get started. I hear it from grandparents who look at today’s costs and wonder how young families are supposed to make it all work.

That uncertainty feels increasingly common.

And it raises a question that seems to be everywhere these days:

What happened to affordability?

Why does ordinary life feel so expensive?

Most Americans don’t need an economist to tell them something has changed. They feel it every month when they pay their bills. They see it in housing prices, childcare costs, healthcare premiums, college tuition, and the growing challenge of saving for retirement while keeping up with today’s expenses.

For many families, financial life has become a constant exercise in tradeoffs. What gets paid now? What gets postponed? What gets scaled back?

Earlier in this series, we talked about survival mode and the pressure so many Americans are carrying. That pressure is real.

The question is where it came from.

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A Strange Contradiction

What makes this question so interesting is that the story is not as simple as it first appears.

According to research cited by Consumer Affairs and the Journal of Consumer Research, Americans today have roughly 63% more purchasing power than they did in 1973.

At first glance, that sounds like good news. If purchasing power has increased, shouldn’t life feel easier? Shouldn’t people feel more secure?

Yet when you ask people how they feel about their finances, many describe exactly the opposite experience.

Part of the answer may be that while purchasing power increased overall, many of the things most closely tied to long-term security became dramatically more expensive.

Since the early 1970s, home prices have risen more than 1,000 percent. Public and private college tuition have risen dramatically. Healthcare costs have surged. Childcare has become one of the largest expenses many families face.

In other words, Americans may have gained purchasing power while simultaneously watching many of the foundations of middle-class life move further out of reach.

In some ways, life really has become more affordable.

A television that would have been considered a luxury a generation ago can now be purchased for a fraction of the cost. Computers are more powerful and more affordable. Smartphones place capabilities in our pockets that would have seemed unimaginable just a few decades ago.

Those gains matter. They are real.

But many of the things most closely tied to long-term security have moved in the opposite direction. Housing, healthcare, higher education, childcare, and retirement have consumed a growing share of household budgets. The result is a strange contradiction: many Americans can afford technologies and consumer goods that previous generations could only dream about, while finding it more difficult to afford some of the milestones that earlier generations often viewed as attainable.

That may help explain why the affordability conversation feels so confusing. The numbers are not entirely wrong. Many goods really are more affordable than they once were. Yet many people also feel less financially secure.

Both things can be true at the same time.

That doesn’t mean the past was perfect. Every generation has faced its own challenges. But it does suggest that something important changed.

And understanding what changed is where the story begins.

Many Things Changed

One of the reasons affordability is so difficult to understand is that there was no single turning point.

There wasn’t one law, one president, one economic decision, or one bad actor that suddenly made life more expensive.

Many things changed.

Housing costs rose faster than incomes in many parts of the country. Healthcare became more expensive. College became more expensive. Childcare became more expensive. Debt became a larger part of ordinary life.

The way wealth is accumulated changed. The way businesses are financed changed. The relationship between wages and productivity changed. The role of financial markets changed.

And over time, those changes began to compound.

Each one may have seemed manageable on its own. Together they reshaped what ordinary life costs and what it takes to achieve the milestones many Americans associate with stability and security.

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The Disconnect Between Wages and Productivity

For much of the twentieth century, a growing economy often translated into rising wages and broader prosperity. As businesses became more productive, workers generally shared in the gains.

In recent decades, that relationship appears to have become more complicated.

Americans are more productive than ever. Technology has transformed the workplace. Businesses are more efficient. Workers generate enormous economic value.

Yet many families look around and wonder why life does not feel easier.

Economists debate the reasons. Some point to globalization. Others point to technology, changes in labor markets, declining union influence, financialization, or shifts in public policy.

Many also note that a growing share of corporate profits has been directed toward stock buybacks and dividends rather than wage growth. Whether that is a cause, a consequence, or simply part of a larger shift is widely debated.

What is harder to debate is the feeling shared by many Americans that the gains from economic growth are not reaching ordinary households in the same way they once did.

The Growing Importance of Ownership

Another change has been the growing importance of asset ownership.

For many families, income alone is no longer enough to build lasting financial security. Increasingly, wealth comes from owning assets that appreciate over time: homes, businesses, stocks, and investment portfolios.

Those who already own these assets often benefit when values rise.

Those who do not may find themselves working just as hard while struggling to keep up.

This is not simply a story about income. Increasingly, it is also a story about ownership.

The Cost of Borrowing

There is another part of the affordability story that receives less attention: interest.

For families with substantial savings and investments, interest can be a source of income and wealth accumulation.

For families living paycheck to paycheck, interest often works in the opposite direction.

Credit cards, student loans, auto loans, and mortgages all carry costs that must be paid out of future earnings. When money is tight, borrowing can become a necessity rather than a choice. High interest rates can turn a temporary setback into a long-term burden.

Many families are not only paying for what they need today. They are still paying for what they needed yesterday.

In a sense, affordability is not just about prices. It is also about carrying costs.

The Burden Stack

Perhaps the best way to think about affordability is not as one problem but as many pressures accumulating in the same place.

Housing.

Healthcare.

Childcare.

Education.

Debt.

Taxes.

Retirement savings.

Each burden may be manageable on its own. Together they create the weight so many Americans feel every day.

That weight affects more than household budgets. It affects optimism, family formation, trust in institutions, political behavior, and our collective sense of what is possible.

It also helps explain why affordability has become such a powerful political issue. People may disagree about the causes, but they increasingly agree about the experience.

Creating More Room to Breathe

If affordability is a systems problem, it is unlikely to have a single solution.

Housing policy matters. Healthcare policy matters. Education policy matters. Labor markets matter. Asset ownership matters. Public finance matters.

There are many places where meaningful improvements could be made. That is where Unburden America fits into the conversation.

The proposal we are exploring does not claim to solve every affordability challenge facing the country. No serious proposal could.

Housing affordability requires housing policy. Healthcare affordability requires healthcare policy. Education affordability requires education policy.

But one of the questions we have been exploring throughout this series is whether we are placing too much of the burden of funding government on work, wages, families, and productive businesses while overlooking some of the largest financial flows in the modern economy.

Reducing that burden would not solve every challenge facing American families. But it could create more room to breathe.

And there is a second possibility as well.

A broader and more modern revenue base could create greater fiscal capacity for the nation itself. It could expand our ability to invest in housing, healthcare, childcare, education, infrastructure, and other priorities that shape affordability over the long term.

Capacity alone does not solve problems. Good policy choices still matter. But capacity matters too.

A society with greater capacity has more options. More flexibility. More ability to respond to the challenges it faces.

The purpose of Unburden America is not to suggest that one policy can solve every problem. It is to ask whether reducing unnecessary burdens and increasing our collective capacity might help create the conditions for solving more of them.

Because before we can build the future we want, we need both the breathing room and the ability to act.

And right now, the affordability crisis may be telling us that many Americans feel they have too little of both.

Let’s Unburden America.

Take a moment and think about your own life.

Why are you where you are today?

Most of us could answer that question in practical terms. We might talk about our job, our family, our finances, our health, or the place we happen to live. But those are mostly the visible facts of our lives. Beneath them is a longer story.

Much of our present life is the accumulated result of choices made in the past.

Perhaps you chose to go to college. Or perhaps you chose not to. Maybe you accepted one job offer and declined another. Maybe you moved across the country for an opportunity, or decided to stay close to home. Perhaps you married one person instead of another, started a business, joined the military, had children, changed careers, took a risk, or played it safe.

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Most of these decisions seemed ordinary at the time. Yet each one altered the path ahead. Some choices opened doors. Others quietly closed them. Looking backward, what we call our personal history is often the accumulated consequence of countless choices, some deliberate and some barely noticed when they were made. Over time, those choices become circumstances, and those circumstances become the life we are living.

Of course, not everything was our choice. We are all born into circumstances we did not create. We inherit families, communities, cultures, institutions, opportunities, and challenges. Some people begin life with significant advantages. Others face obstacles from the very beginning.

That inheritance becomes part of our history.

And history has a remarkable way of continuing to act upon us long after the original events have passed. A degree earned twenty years ago may still influence career opportunities today. A business decision made a decade ago may continue shaping a family’s financial future. A poor choice, a stroke of luck, a missed opportunity, or a difficult season can continue producing consequences long after the moment itself has faded from memory.

In that sense, history is not really the past. History is the past still acting upon the present.

Yet there is something equally important to remember. History influences us, but it does not completely define us.

While we cannot change yesterday’s choices, we can make different choices tomorrow. The person burdened by debt can begin paying it down. Someone trapped in the wrong career can learn new skills and start again. A relationship can be repaired. A mistake can be acknowledged. A new direction can be chosen.

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The past matters.

But the future is still being written. It is shaped by our choices.

I believe that nations are not so different from people. Both inherit circumstances they did not create. Both live with the consequences of earlier decisions. Both carry strengths, weaknesses, opportunities, and burdens forward through time.

America did not begin this year, this decade, or even in our lifetime. We inherited institutions, laws, systems, infrastructure, traditions, debts, strengths, weaknesses, and assumptions that were shaped by generations of choices made long before most of us arrived.

Some of those choices served us extraordinarily well. The Constitution created a framework durable enough to survive centuries of change. The Homestead Act helped settle a continent. The GI Bill expanded opportunity for millions of families. The Interstate Highway System transformed commerce and mobility. Investments in science, education, and research helped fuel decades of innovation and prosperity.

But history leaves behind burdens as well as benefits.

Just as individuals sometimes spend years dealing with the consequences of earlier decisions, nations do too. National debt, rising healthcare costs, unaffordable housing, aging infrastructure, and institutions that struggle to keep pace with a changing world are all examples of history still acting upon the present. Whether these conditions emerged from deliberate decisions, changing circumstances, unintended consequences, or some combination of all three, they now form part of the reality we must navigate.

The most important moments in American history were not moments when the country simply accepted its circumstances as permanent. They were moments when people decided that a different future was possible. America’s greatest achievements were not accidents. They were choices.

History is a gift, a burden, and a responsibility.

It is a gift because we inherit the achievements, sacrifices, and wisdom of those who came before us.

It is a burden because we also inherit unresolved problems, obligations, and challenges that did not originate with us.

And it is a responsibility because future generations will inherit the consequences of the choices we make today.

The generations that came before us did not leave us a finished country. They left us a work in progress. Now it is our turn.

Every generation inherits a history and then adds a chapter of its own.

We are our history. But we are also our choices.

We inherit history, but we inherit the power to choose as well.

History explains how we arrived here.

Choices determine where we go next.

We can choose to Unburden America.