The North American Free Trade Agreement (NAFTA) between the United States, Mexico, and Canada harkens back to a not-so-distant past when Congress took its constitutional role “to regulate Commerce with foreign Nations” seriously. 

In his final weeks in office, Republican President George H. W. Bush signed the agreement on December 17, 1992. The House and Senate approved NAFTA less than a year later in a bipartisan fashion with Democrat President Bill Clinton signing the Implementation Act in December 1993. 

Just over 31 years since, NAFTA and its updated USMCA have proven a boon to the American economy. 

The agreement slashed many tariffs immediately upon enactment in 1994. By 2008, nearly all import duties between the three nations had disappeared. Central to the agreement was manufacturing freedom. But NAFTA also removed unfair trade barriers placed on service industries — including banking, insurance, and telecommunications. Guaranteeing fair treatment for foreign investors also spurred cross-border investment. This included protecting their property from expropriation and providing international arbitration in lieu of oft-biased local courts. Patents, copyrights, and trademarks also received protection from piracy and counterfeits to an extent unprecedented in trade deals. Cross-border commerce soon soared. The US, Canada, and Mexico benefited greatly from lower costs, more investment, and streamlined trade.  

As NAFTA pried open markets by limiting quotas and other non-tariff barriers, trade transformed and blossomed. Since 1994, American exports have nearly tripled, even after you adjust for inflation.  American goods exported exceeded $2 trillion last year. Exports from the US to Mexico jumped from about $40 billion a year to an all-time high of $334 billion in 2024. Our exports to Canada more than tripled, rising from $100 billion to a near all-time high of $349 billion last year. Both of America’s NAFTA partners import more than twice as much from the US as China — number three on the list.

No agreement is perfect, of course. Some sectors, notably dairy, received cronyist carveouts. But contrary to popular belief, American exporters enjoyed a manufacturing renaissance. 

The US agricultural sector saw a major boost from NAFTA. With tariffs on many farm goods eliminated, exports to Canada and Mexico soared. Corn exports to Mexico jumped from negligible levels to billions of dollars annually, while soybean, pork, and beef shipments also climbed. In 2023, Mexico and Canada accounted for more than 32 percent of US agricultural exports — over $55 billion a year in sales. Farmers in Iowa, Ohio, Nebraska, and Texas literally reap the rewards of this expanded market access. 

The auto sector thrived under NAFTA’s integrated supply chains. Tariffs on vehicles and parts dropped to zero, letting companies like Ford, GM, and Chrysler source components from Mexico and Canada at lower costs. This kept US-made cars competitive globally — exports of vehicles to Mexico alone grew from under $1 billion in 1993 to nearly $29 billion in 2024. Plants in Michigan, Ohio, and the Midwest benefited from this cross-border efficiency, even as some assembly shifted south. The American automotive sector exports more than $160 billion annually, nearly doubling in inflation-adjusted terms since 1994. Across the nation, American factories churn out automobiles for export — including BMW’s South Carolina plant which employs 11,000 Americans. Motor vehicles are among the top three exports in 14 states, including Missouri, Michigan, Ohio, and Tennessee.  

Beyond autos, manufacturing broadly gained from cheaper inputs and bigger markets. Machinery, electronics, and chemicals saw export booms — US machinery exports to NAFTA partners tripled in value post-1994. Firms in industrial hubs like Illinois and Pennsylvania found new customers, while lower-cost Mexican imports (like steel or plastic components) trimmed production costs, helping manufacturers stay lean in a global race. America’s aerospace industry now exports nearly $100 billion a year.  

The energy sector, particularly oil and gas, benefited as well. Much of the record levels of US-produced oil is sent to Canada for refining before returning to fuel our vehicles. Meanwhile, Canada became the US’s top supplier of some types of crude oil needs. Although the United States produces more oil on net than we consume, petroleum types and uses vary. For this reason, we imported nearly 4 million barrels a day from Canada in 2023 representing 97 percent of their oil exports. Mexico sends refined products north to us as well. The boom in American natural gas production helps supply the energy needs of all three nations — all without tariff taxation. More than half of our natural gas exports flow to Canada and Mexico, 8 percent of our total production. This keeps energy prices stable, directly supports extraction and pipeline jobs in Texas, North Dakota, and elsewhere. Industrial electricity prices — essential to competitive manufacturing — benefit as well. 

Retailers and consumer goods companies — like Walmart or food processors — benefit from cheaper imports and a larger export market. American families enjoy Mexican fruits and vegetables — in the middle of winter — at affordable prices. American brands like Coca-Cola, Kraft, and John Deere profit by more sales in Mexico.  

Deeper ties with Canada and Mexico drove efficiency, created jobs, and increased output. Of course — some industries like textiles and furniture faced tough competition. It’s a misnomer to claim manufacturing has been “hollowed out.” In fact, the United States is a bigger manufacturing powerhouse today than 30 years ago. Industrial output increased by more than half since 1994 — and is near all-time high today.

At the same time, fewer people are employed in manufacturing despite the increased output because efficiency has surged. Our economy has shifted to much higher-paying, advanced services. In fact, we now export far more of these services than we import. In other words, free trade has allowed us to purchase low-cost products from overseas, focusing on these new high-paying sectors where we enjoy a comparative advantage. 

The services sector — including finance, logistics, and tech — expanded under NAFTA. US banks and insurers gained easier access to Canadian and Mexican markets, while cross-border trucking and shipping grew to handle booming physical trade. American service exports to NAFTA partners topped $128 billion in 2023, boosting well-paying white-collar jobs.  

Of course, protectionists bemoan the fact that our imports from our partners grew by even more. But a trade deficit is identical to our capital surplus that flows back to the United States often in the form of foreign direct investment (FDI) in businesses here. Since NAFTA’s enactment, FDI exploded more than 500 percent to more than $330 billion annually. This helped spur a doubling in overall worker productivity in the past 40 years. Competition forces producers to innovate. As efficiency grew, GDP across all three nations grew.  

It’s not just investors or managers who benefit from rising productivity. Workers share in this abundance of affordable, available, and diverse goods. American families are far better off. Thanks largely to the innovation and efficiencies from free trade, millions of Americans enjoy new opportunities in well-paying professions. Middle-class real annual family income increased more than $28,000 since 1994. By 1980s income standards, middle-class shrank as a share of the population only because millions of these families are now earning what would have been upper middle-class incomes. Yes, that’s in real, inflation-adjusted terms. Meanwhile, a greater percentage of prime-working age adults are employed today than pre-NAFTA. 

NAFTA exhibits how widely shared abundance materializes when governments meddle less and let markets work.  Trade barriers — tariffs, quotas, and restrictions on investment — distort prices, prop up inefficient producers, and rob consumers of choice. 

Tearing down these barriers between the US, Canada, and Mexico generated widespread abundance. Free trade certainly means lower prices for businesses and families. Who wants to pay a Canadian lumber tariff when building a home — or a Mexican tequila tax? But, just as importantly, free trade means the liberty to buy and sell without seeking the approval of or paying off the central planners in Washington, DC.

The Federal Reserve’s monetary policy committee left the target range for its policy rate unchanged at 4.25 to 4.50 percent at its May 7 meeting, maintaining the level set in December 2024. Although tariffs have added to economic uncertainty, market participants widely expected the Fed to hold rates steady.

At the post-meeting press conference, Fed Chair Jerome Powell said the committee continues to view the US economy as solid, despite rising uncertainty. He noted that unemployment remains low and the labor market is at or near maximum employment. But he also cautioned that the risks of both higher unemployment and elevated inflation have increased.

Powell explained that the Administration’s trade policies prompted businesses to front-load imports in anticipation of potential tariffs, causing an unusual swing in net exports that complicated first-quarter GDP measurement. Nevertheless, he highlighted that private domestic final purchases — which exclude net exports, inventory investment, and government spending — grew at a solid 3 percent pace. But he also warned of a sharp decline in business and consumer sentiment, which could dampen spending later this year.

Wage growth has moderated to what Powell described as a more sustainable trajectory that continues to outpace inflation. On prices, he noted that both headline and core inflation remain above the Fed’s 2-percent target. Market– and survey-based measures suggest that households and businesses expect tariffs to push inflation higher in the near term. But Powell emphasized that long-term inflation expectations remain anchored at the Fed’s 2-percent goal.

Powell also pointed to substantial changes in trade, immigration, fiscal, and regulatory policy under the Trump Administration, noting that their effects remain uncertain as the specific policies are still evolving. He assured listeners that the committee will continue to monitor these developments closely and adjust monetary policy as needed to fulfill its mandate of price stability and maximum employment.

Powell warned that, if the Administration follows through with its announced tariffs, inflation will likely rise, economic growth will fall, and unemployment will increase. He was careful to point out, however, that the inflationary effects could prove temporary if the tariffs result in only a one-time upward shift in the price level. That said, he acknowledged that the inflationary impact could persist if it takes longer for the tariffs’ effects to pass through fully into prices.

Powell reiterated that the committee is obligated to keep long-run inflation expectations anchored at 2 percent and to prevent one-time price level increases from developing into an ongoing inflation problem. Fulfilling this obligation could require placing greater weight on the price-stability side of the Fed’s mandate, he said, noting that sustained price stability is essential for sustaining strong labor markets.

Finally, Powell cautioned that the Administration’s policies could create tension between the Fed’s dual mandate of price stability and maximum employment. If that happens, Powell explained, the committee would assess how far inflation and unemployment are from their respective goals and how long it might take for those gaps to close, adjusting policy as needed. For the time being, however, Powell said the committee believes a wait-and-see approach is best until uncertainty surrounding the Administration’s policies decreases.

Every year, Oxfam publishes its report on world inequality. The statistic is always the same: a very small number of insanely wealthy individuals own most of the world’s wealth. The 2025 edition is no different. The titles and claims are no different: “billionaire wealth surges”; “top 5 ways billionaires are bad for the economy”; “Billionaires’ fortunes are growing at an unimaginable pace” etc. 

Nothing is different from the first time I engaged with it in French, my native language, a decade ago. It’s always meant as a criticism of markets, capitalism, neoliberalism or whatever label is in vogue at the time. No different also because it continues to eschew one major criticism – leaving all the other (more technical ones) aside – regarding “missing wealth.” 

What missing wealth? That of the world’s poor! 

For residents of Western countries, it is easy to imagine being able to prove that a house belongs to us or that a business is ours. All the assets we own are easily recognized. But this reality does not apply everywhere on Earth. In fact, countries with strong recognition of property rights are more the exception than the rule. Indeed, the worldwide norm is a weak protection of property rights as rulers prefer to be able to seize properties if need be or regulate their uses for the purposes of preserving political power. 

When individuals cannot have their ownership recognized, their wealth officially does not exist — even though it very much does. In 2000, economist Hernando De Soto studied what he called “dead capital.” The term refers to resources privately owned by individuals but without any formal title of ownership. 

For example, a Peruvian citizen might own a small business, but legally that property does not exist. Without legal recognition, it is extremely difficult to make that capital grow. On one hand, this hampers economic growth. On the other hand, it means we vastly underestimate the wealth (read: capital stock) of the world’s poorest populations. In 2000, when De Soto produced the first estimate of the scale of this “dead” (i.e., inactive) capital, the total amounted to about $9.3 trillion (9,300,000,000,000 dollars). At the time, this amounted to approximately 28 percent of global individual income. Assuming that proportion holds today, mobilizing this stock of dead capital at a 5 percent annual return (a highly conservative estimate) would generate an additional $1.49 trillion in output per year—equivalent to roughly 1.4 percent of current world GDP.

This may not seem like much. But there are three reasons why it matters a lot. First, the gains would accrue primarily to those at the very bottom of the global income distribution. If all the extra income went to people in Latin America, the Middle East (minus Saudi Arabia, Qatar, United Arab Emirates and Israel) and Africa, this would amount to around $580 per head. In these regions, incomes per head fluctuate from between $500 to $17,000. For them, such an income boost would be significant. Second, the resulting income boost would raise the baseline from which these economies grow—meaning that even if growth rates remain unchanged, the absolute gains compound more quickly year after year. Third, if part of this capital is channeled into research and innovation, it could permanently increase the growth rate itself. Taken together, these effects could help close the gap between rich and poor countries almost overnight, while also accelerating the pace at which that gap narrows over time.

Unfortunately, De Soto’s calculation has never been updated or expanded, but the problem is widely acknowledged among development economists. When some claim that global wealth disparities are gigantic and growing, they are usually referring only to financial wealth — which does not include this mountain of unusable capital due to lack of legal recognition. Thus, the poorest segments of the world’s population actually hold much more wealth than is commonly believed. 

Remember, the reason why dead capital exists in the first place is because property rights are poorly protected in many nations. Because of the insecurity of property rights, owners cannot easily prove ownership. This limits the ability to use de facto assets as collateral or to sell them. It also discourages any investments into existing properties since the fruits thereof cannot be appropriated. It also limits the ability to rent a property to other parties (and as a result, property is more often rented to kin at a discount rather than to the highest bidder). Broadly, the consequence is that these assets stay in the informal economy where they are not used at their full potential. 

By preventing the poorest individuals from leveraging the resources they already own, we severely limit the growth potential of developing countries. Moreover, by sending the message that it is not worthwhile to have their existing capital recognized and protected, we also discourage the creation of new capital.  

One recent paper, concerned with China’s economic growth, studied a case of property rights reform and confirmed that there was significant amounts of “dead capital” waiting to be unleashed for productive uses. In 2007, China adopted the Property Law, which granted private property the same legal status as public property (a big deal in Communist China). The result was that new private firms emerged and grew in size as their production increased rapidly. This was because they marshalled “dead capital” into highly productive uses—something clearly visible in the rapid rise in output from private firms.

The example of China clearly illustrates the importance of the protection of property rights in bringing “dead capital” back to life. The corollary here is that the inequality that Oxfam bemoans does not justify its contempt for “markets” or “capitalism”. 

Rather, it justifies its embrace. Legalizing “dead capital” would lead to an acceleration of economic growth in countries where there is more of it. These countries are all poor countries. Embracing the true foundation of a well-functioning market economy – the protection of property rights – would help cure the ill that Oxfam complains about.

Supporters of tariffs claim that mainstream economists don’t understand the game. This “game” has been described by Peter Navarro as three-dimensional chess. I want to take that claim at face value, break down its dimensions, and then evaluate whether Trump’s actions are likely to lead to his desired outcomes. And the answer is “no,” because the administration is playing three quite different, inconsistent games all at once. That isn’t a strategy at all; rather, it’s a scheme for certain failure.

Trump and his advisers claim that their policies have three justifications. For simplicity, I will call these (1) security, (2) reciprocity, and (3) revenue. I’ll present these (as the lawyers put it) arguendo, meaning that for the sake of argument, we will just consider the case for Trump’s actions, and mostly put aside the counterarguments.

Security: First, national security requires securing supply chains, reducing US dependence on other nations. The main concern is China, but any such dependency weakens our strategic position. In this view, the US is vulnerable not only to holdup of essential items such as advanced semiconductor chips, but more generally to the hollowing out of our national capacity to produce large ships and other manufactured products. Since modern manufacturing is shut down by any missing component, many parts are shipped to the US from abroad — this exposure to the whim of foreign leaders or the fragility of shipping and fast delivery is an unacceptable risk.

Of course, ending the offshoring of supply chains is wrenching, and developing domestic sources will be terribly expensive. But national security is always expensive: if these dependencies are the main American security vulnerabilities, as has been argued by Jon Pelson or the House Homeland Security Committee, then the expense will be worth it. If it’s true that “trade is bad,” then high, permanent tariffs and other trade barriers are essential to national security.

Reciprocity: Second, the goal might be to reset world trade by encouraging consumers in other nations to buy more American products. On this view, the US has been played for a fool for decades, having (relatively) open markets for foreign imports but not requiring reciprocal openness in our trading partners. It’s time to stop losing: foreign nations need the US market more than we need theirs.

If the US raises tariffs on imports, other countries will be forced to lower their barriers to our products. Everyone understands that this strategy is costly in the short-run, because tariffs disrupt existing patterns of business and raise costs for consumers. But these short-run costs will quickly be recovered, as US exporters will have greater opportunities to sell American products abroad on a level playing field.

Revenue: Third, the administration has touted tariffs as a (nearly) free revenue source, under the claim that these taxes are paid primarily by the foreigners who want to move their products through US customs. Taking that claim at face value (even though it is nonsense) requires that tariffs be low and permanent. After all, there is a tariff “Laffer Curve” just like for income taxes: a zero rate produces zero revenue, and at some high rate revenue also falls to zero.

The revenue rationale is sometimes based on the claim that the nineteenth-century US budget was (almost) entirely funded by tariff revenue, meaning that the income tax can be eliminated. Alternatively, the new revenue could be used to reduce the burgeoning fiscal deficit, or the government could declare a “tariff dividend,” returning the money to taxpayers as a windfall paid by foreigners.

The Contradiction: Pick a Dimension

The argument for free trade is that nations, and the people who comprise them, face thousands of complex “make or buy” decisions. The rule for a nation, just as for a family or a business, is that if something is cheaper to buy than it is to make, then it is better to specialize in making only those things we can make best and cheapest, and buy everything else. If other countries have barriers to their consumers buying our products, that’s their problem; the argument for free trade is unilateral, meaning that only the “make or buy” comparison is relevant. Artificial price increases that result from trade barriers distort this comparison, so that the US ends up making things that it could have purchased more cheaply from another nation.

I have outlined the three main counterclaims to this general rule of “make or buy”: security, reciprocity, and revenue. The way the arguments were presented assumed that each, while not perfect, had some merit. (I do not myself think that is true, but it is useful in each case to grant the premise arguendo, as a way of understanding the claim.) 

The problem for Trump supporters is that even if one grants that each argument has some merits on its own, the three together are an incoherent and highly destructive muddle. 

The security argument implies, and in fact requires, that the US must permanently set up industries to make things that it could buy more cheaply on international markets. In particular, tariffs need to be high and fixed forever to block the import of foreign semiconductors, ships, and whatever else security demands. Only if there is a credible commitment to permanent confiscatory tariffs will domestic industries invest in the capacity to make these products, since by definition other countries can make them more cheaply than we can.

Fair enough, but then high tariffs cannot be used as a bargaining chip in reciprocal negotiations, and tariffs cannot be low enough to earn revenue. After all, the only way tariffs produce revenue is if they are low enough as to not discourage substantial imports, and that is the opposite of the stated goals. The security argument requires no imports, no negotiated tariff reductions, and no revenue, because trade itself is the danger. The security argument, if it is correct, rules out the reciprocity argument and the revenue argument.

The reciprocity argument requires that the tariffs are temporary, and that the commercial bargaining strength of the US — based on the unmatched size of our consumer market — will force other nations to lower trade barriers against US goods. That view is largely nonsense, because (just as in the US) the political benefits of tariffs are valuable to concentrated interests in countries that maintain tariffs against us. If other countries cared about their consumers, they wouldn’t have tariffs in the first place. What that means is that other countries are likely to raise, not lower, their tariffs in response to “Liberation Day.”

But ignoring that problem still means that US tariffs would have to be very high (ruling out revenue) but temporary (ruling out security). The whole point of reciprocity is that the barriers won’t last. Temporary reciprocity tariffs cannot spur domestic investment or change our supply chain sourcing.

Finally, the revenue argument requires that there is little change in the volume of trade. Low, across the board tariffs would be necessary to avoid the substitution of products from adversary nations such as China to neutral countries such as India or the nations of Southeast Asia. Since the only way to make money from tariffs is to have them low enough as to not to discourage imports, the security argument is entirely precluded, and no domestic producers will invest in US capacity.

The reciprocity argument is likewise contradicted, since reciprocity claims tariffs are temporary, but revenue requires that they are permanent. The high tariffs required for reciprocity bargaining now, and the low tariffs after reciprocal agreements in the future, will produce relatively little revenue.

The bottom line is that whatever you think about the merits of each of the three “games” — security, reciprocity, revenue — moves that might work in one game are disastrous in the other two. 

By pretending to be playing all three games at once, the administration has ensured that we will lose them all.

My son says “College is bullshit” — and he’s only 10 years old — my physician told me. The boy had already decided he would not go, and his father, an Ivy League graduate with a prestigious specialty practice, was uncertain how to respond. He said to me, tentatively: “​Okay, he has to graduate from high school, but then…Well, he has to do something, but not necessarily college.” I could hear the bewilderment in his voice. 

The young man’s sentiment is crudely expressed, but it captures a spreading sense of rebellion, an undercurrent of disillusionment. As the cost of college skyrockets, students and families wonder if the promise of higher education is still being kept. And with many graduates underemployed or burdened with debt, or both, they have reason to ask.​ 

Public opinion polls seem to affirm this. A 2023 Gallup poll found that only 41 percent of US adults believed a college degree is “very important” — down from 70 percent in 2013. Among 18–29 year-olds, that number was even lower. And a 2022 ECMC Group survey of teens (ages 14–18) reportedly found that only 48 percent said they were likely to pursue a four-year degree, down from 71 percent in 2020.  And 42 percent believed success could be achieved through alternative pathways, including apprenticeships, bootcamps, or starting their own business. 

What has happened, my doctor was asking. Why is the price sticker for college so shocking, today? Sure, he said, I can afford it, but what does it deliver? 

More College  ≠ More Education 

In 1940, only 4.6 percent of Americans had a college degree. College was for the elite, those who could pay and a few fortunate scholarship winners. After World War II, the GI Bill enabled large numbers of working-class Americans to enter college. Mass higher education became political policy and a social expectation.​ 

By 2020, four out of ten Americans had a college degree of some kind. Community colleges, private universities, public universities, liberal arts colleges, institutes and academies, and for-profit institutions were serving a vastly wider demand. For decades, a rapid democratization unfolded and was greeted as a national achievement and strength. As of the 2023–24 academic year, according to the National Center for Education Statistics, the United States had 2,691 four-year degree-granting institutions. There were 1,496 two-year institutions, including community colleges and junior colleges primarily granting associate degrees and certificates. 

But even as it became the default path for men and women alike, college became increasingly administratively bloated, unabashedly ideological with confusing options of increasingly less value after college, and, for many, shockingly expensive. 

“Between 1993 and 2009, administrative positions at colleges and universities grew by 60 percent, a rate ten times faster than that of tenured faculty positions.” Today, many universities employ more administrators than professors. Student affairs officers, DEI coordinators, wellness directors, marketing teams, and “engagement specialists” now populate campuses. Few directly contribute to teaching or learning.​ The Harvard Crimson reported in “Fire Them All;  God Will Know His Own,” that Harvard employs 7,024 full-time administrators, a number closely matching its undergraduate population. 

Top colleges compete not just in academics but in amenities: gourmet dining halls, lazy rivers, climbing walls, luxury dorms. It’s common for new campus buildings to cost $500–700 per square foot. These upgrades appeal to prospective students, but they bloat the budget.​ In addition, colleges spend heavily on name branding, rankings manipulation, and student recruitment — none of which lowers costs. 

The Demographic Earthquake 

And beneath many colleges there is a demographic earthquake threatening. Too few applicants. Between 2010 and 2021, the number of US undergraduates dropped by nearly 15 percent. The birthrate decline after 2008 means fewer high-school graduates are entering the college pipeline. By the fall of 2025, the so-called “enrollment cliff” will hit many regions hard — especially the Midwest and Northeast.​ 

Simple economics: supply (college classroom seats) is outpacing demand. This surplus is especially pronounced among small private colleges and second-tier universities. Many now compete for the same students — not with lower list prices, but with luxurious amenities and aggressive tuition discounting.​ In 2023, the average tuition discount rate at private colleges reached 56 percent. That means for every $50,000 sticker price, the average student paid about $22,000.​ 

Does this help? Well, it enables schools to practice price discrimination — charging wealthier families more while offering discounts to others. But this distortion creates the illusion that college is even more unaffordable than it often is.​ 

The “Bennett Hypothesis,” advanced by former Department of Education Secretary William Bennett in the 1980s, is that federal aid fuels tuition inflation. Between 2000 and 2020, student loan debt ballooned from $240 billion to $1.6 trillion. In 2023 alone, the US federal government disbursed $112 billion in direct student aid, including Pell Grants and federal student loans. State and local governments added another $110 billion in direct support to public colleges.​ 

This government cornucopia has enabled colleges and universities to hugely “bulk up” their bureaucracies, charge much higher tuition and other costs to facilitate their “redistribution of wealth” from richer families to poorer (most “minority”) families, and direct a lot of alumni and other private contributions to appealing amenities. 

Revolution: The Core Curriculum 

There is another species of inflation. When college was rare, graduates were an elite. Today, they are the norm. Employers now require degrees for roles once filled by people with a high-school diploma.​ About half of recent college grads are underemployed or working jobs that don’t require a degree — baristas, retail clerks, or customer service reps. 

The ideological agenda of higher education has resulted in conversion of much of the core curriculum to postmodernist ideology, loosely termed “political correctness” and Neo-Marxism. Liberal arts programs have been shedding classical disciplines — logic, rhetoric, moral philosophy, history — for courses focused on identity politics, power structures, and postmodernist/Marxist critiques of Western (especially American) history, economies (that is, capitalism), society, politics, and the arts. While there are admittedly jobs for well-trained, committed cadres of postmodernist activism, the classes offer no preparation for most real jobs. How many staff writers does the Atlantic or the New Yorker need, after all? A graduate fluent in the works of the French Communist Party founder of “postmodernism,” Jacques Derrida, may not be fluent in Excel. 

As Professor Stephen Hicks, author of the modern classic Explaining Postmodernism: Skepticism and Socialism from Rousseau to Foucault, summarizes it: “Postmodernism became the leading intellectual movement in the late 20th century. It has replaced modernism, the philosophy of the Enlightenment. For modernism’s principles of objective reality, reason, and individualism, it has substituted its precepts of relative feeling, social construction, and groupism. This substitution has now spread to major cultural institutions such as education, journalism, and the law, where it manifests itself as race and gender politics, advocacy journalism, political correctness, multiculturalism, and the rejection of science and technology.” 

Heather Mac Donald, senior fellow at the Manhattan Institute, accuses universities of abandoning their core educational mission to peddle ideological orthodoxy. “The university has become an engine of identity politics, obsessed with race, gender, and oppression, rather than with the pursuit of truth.” How may soaring costs be related to ideology? She writes that “…federal money that goes into student loans is driving a huge part of the tuition increases and those in turn keep the bureaucracy growing. And Title IX has led to the creation of completely unnecessary offices in every university….I think that this is fundamentally an ideological issue and that the bureaucracy merely follows. This is driven by something much deeper, which is a hatred for Western civilization….The ‘real world’ now features the same insane search for its own racism and sexism.” 

Likewise, Thomas Sowell, senior fellow at the Hoover Institution, has long argued and adduced evidence that too many people in academia today are not educating students to think for themselves, but indoctrinating them with politically correct dogmas. “There are no institutions in America where free speech is more severely restricted than in our politically correct colleges and universities, dominated by liberals…” 

Both scholars say preaching ideology has sapped both the intellectual rigor of a classical education and the real-world value of a liberal arts degree — at least for employers prioritizing competence over left activism. Tech, healthcare, logistics, finance, and skilled trades are where job growth lies. And they require actual skills — data analysis, coding, medical certification, and supply chain expertise. 

Too many liberal arts grads lack quantitative competence and practical experience. Not all degrees are created equal. Science, technology, engineering, and mathematics (STEM) fields with majors such as accounting, mechanical engineering, cybersecurity, laboratory technician, nursing, and software developer have among the highest job placement rates, often 90 percent-plus within six months of graduation. Liberal arts, humanities, and most social sciences trail far behind. 

Schools And Degrees That May Work for Work 

As for practical experience, institutions with strong co-op programs or industry ties — Northeastern, Purdue, or Georgia Tech for three examples almost at random — can often place students into jobs more reliably than more prestigious but less career-oriented universities. Thus internships, mentorships, project portfolios, and networking matter more than ever but are relegated to extracurricular activities, not the core curriculum. 

There is no dearth of statements and studies making this point. Just one, a study by American Student Assistance (ASA) and Jobs for the Future, reported that 81 percent of employers prioritize skills over degrees when evaluating candidates. Additionally, 72 percent of employers believe a degree isn’t a reliable indicator of a candidate’s quality. That study is cited by a technology publication with a vested interest in special training versus degrees, but the sentiment is to be seen everywhere. A June 9, 2023, Bloomberg headline ran “LinkedIn Bets on Skills Over Degrees as Future Labor Market Currency.” 

Not surprisingly, we get statistics like this from a 2022 report from the Georgetown University Center on Education and the Workforce: Engineering, Computer Science, and Health Professions majors had some of the highest return on investment (ROI), with lifetime earnings exceeding $3 million in some fields. By contrast, majors in the Arts, Education, and Psychology often resulted in lifetime earnings under $2 million. A bachelor’s degree in Petroleum Engineering had the highest median ROI, with graduates earning more than $120,000 per year. A degree in Liberal Arts or Visual Arts often correlated with median earnings below $40,000 per year in the early career phase. 

How useful? Probably also true, in broad strokes, in 18th century Paris. Artists on the Left Bank versus engineers in Napoleon’s armed forces. Yes, it invites satire. But today, the liberal arts have been systematically degraded by ideological indoctrination. 

And finally, there is something that most of us sense in our daily lives. The Bureau of Labor Statistics (BLS) reports that many skilled trade careers that require two years or less of training, — electricians, HVAC technicians, and dental hygienists — lead to median salaries of $50,000–$80,000, often without debt. Many of these majors can be pursued at community colleges, where, according to the American Association of Community Colleges, almost 40 percent of US undergraduates get their higher education. Often, these are programs that combine certifications, hands-on apprenticeships, and industry partnerships — not college degrees — but lead directly to employment in such fields as healthcare, information technology, and skilled manufacturing. 

Costs, Opportunity and Otherwise

Back to my physician’s son: his rejection of college reflects a new cynicism among Gen Z. Perhaps they’ve watched their siblings and cousins graduate with debt, move home, and work menial jobs. Or been watching viral TikToks about “useless” degrees. Few perhaps could say why college is not what it once was, but their intuition is not wrong. For many, it has become a high-stakes gamble, not an investment. 

Parents and students scouting colleges have a few moves available that do not cut to the core of the problem, but ameliorate it. For example, region matters. Tuition tends to be lower at public universities in the South and West, higher in the Northeast. In the deep South, excluding Florida, colleges and universities have maintained more traditional curricula and lower-cost models, foregoing big research establishments and international prestige. There are reports, of course, of Florida and Texas actively pushing back against postmodernist, politically correct ideology, promoting technical skills, and being transparent about costs. And, as an all-too-reliable generalization, institutions in California and the Northeast tend to emphasize diversity initiatives — and charge higher tuition to sustain larger bureaucracies. 

So college can still be worth it and a degree still correlates with higher lifetime earnings. But your major, the institution, and career planning count for a lot. A BS degree in Nursing from a state university? A BA degree in Gender Studies from a small private college with no job placement services? Those are two scarcely comparable discussions of a college education. There are popular questions and formulas that families are urged to apply: What is the college’s job placement rate by major? What is the average debt load for graduates? The actual net price after all aid? How much emphasis is put on internships and other career preparation? 

“Financed by Businessmen” 

Arguably, the only force that might make colleges rethink their role — making a renewed and consistent commitment to admission on merit, intellectual rigor, marketable skills, and education of future professionals instead of ideological cadres — is private philanthropy’s boycott, the beginnings of which we saw when students at elite colleges demonstrated en masse for Hamas and against Israel after October 7. 

As long as Harvard can count on 30,000 alumni gifts a year, and gifts as large as $400 million (in 2015 from hedge fund CEO John Paulson), the administration and the status quo are fortified. The rethinking begins when Leon Cooperman, a 1967 graduate in business from Columbia University, now a billionaire hedge fund manager who contributed $25 million to support the construction of the Manhattanville campus, declares in an interview on Fox News he will no longer contribute to Columbia after the massive demonstration of Students for Justice in Palestine and a recent rise in antisemitism. 

“I think these kids at the colleges have sh*t for brains,” Cooperman said, when asked about the demonstration and similar ones at Harvard, Stanford, NYU, and many other colleges across the country. “I have no idea what these young kids are doing.”

“The real shame is I’ve given to Columbia probably about $50 million over many years,” Cooperman added. “And I’m going to suspend my giving. I’ll give my giving to other organizations.” 

Call it “activism” by  “capital” or “businessmen,” because that is what it is. It has been an extraordinarily long time in coming. As usual, Ayn Rand put it in unequivocal terms: 

The sources and centers of today’s philosophical corruption are the universities… It is the businessmen’s money that supports American universities — not merely in the form of taxes and government handouts, but much worse: in the form of voluntary, private contributions, donations, endowments, etc.

All I can say is only that millions and millions and millions of dollars are being donated to universities by big business enterprises every year, and that the donors have no idea of what their money is being spent on or whom it is supporting. What is certain is only the fact that some of the worst anti-business, anti-capitalism propaganda has been financed by businessmen in such projects.

Klaus Schwab’s retirement and subsequent fall from grace symbolize the tectonic shifts occurring in the current global order. Schwab’s life’s work was to build a globalist world order governed by international elites and the United Nations. He founded and ran the World Economic Forum (WEF) for decades to promote this vision of global governance for the good of the people of the world.

Schwab and his compatriots had grand ambitions to reshape the global order with a “Great Reset.” WEF’s annual conference in Davos was arguably the most prestigious gathering of global elites in the 2010s. Policy decisions, global priorities, international cooperation, and many initiatives flowed out of this gathering. The Davos gathering pushed Environmental, Social, and Governance (ESG) criteria around the world as part of Schwab’s vision to promote “stakeholder capitalism.” 

During the pandemic, the world saw the controlling totalitarian impulse behind Schwab’s globalist agenda for what it was. The public backlash post-COVID was severe. In 2022, the Davos conference started losing steam. In 2023 and 2024, cracks began to show. And by 2025, the Davos conference had largely become a joke. People around the world rejected their top-down global elitism. 

Schwab saw his dream of global stakeholder capitalism almost realized. Then he watched it collapse. But with Schwab out of the picture, and the global order he championed in ruins, what’s next? Trump’s success, which is emblematic of many right-wing populist movements around the world, was driven in part by renewed concerns for security and innovation.

The global elites were largely asleep at the wheel, or worse, complicit, in the stagnation of Europe and the aggressive expansion by China. In fact, the ESG movement, and the western environmental movement more broadly, tangled western countries in costly red tape while largely giving China a pass. “Nation-first” policy prioritizes domestic economic development and rapid innovation. Both improve a country’s strategic position internationally while also improving citizens’ standards of living.

Many populist nationalists don’t want any international “order” at all. But can nation-first really work without reference to the rest of the world? Populists sometimes demean the “rules-based international order” of the 1990s as a front for Davos-style elites to manipulate everyone else. This characterization, though largely unfair, has led to calls for “decoupling” from other countries in favor of nation-first agendas. 

Nation-first can be a good strategy, but it must understand the relevant rules of the game. In foreign policy, a more restrained and isolationist approach may be best – especially where zero-sum national interests are concerned. But assuming all international relations and interactions must be zero-sum is a grave error.

Most of our interactions with people, whether in our own country or internationally, are in the context of mutually beneficial exchange. Both parties are better off when they can make voluntary agreements and trade with one another. Doing so creates a complex spontaneous order, both within countries and between countries. While a revived interest in national identity and flourishing is a welcome antidote to the homogenizing cosmopolitanism of the rule by global elites, we should consider what the international landscape can look like.

A global order can be both spontaneous and organic. It can serve individuals through voluntary agreements and associations. While this kind of order does not require government planning or direction, it does require governments to exercise restraint and to limit their interventionism. Red tape, high taxes, subsidies, and all kinds of legal mandates can prevent healthy spontaneous order from forming.

An important negative example of lacking restraint is the European Union’s onerous supply chain and environmental regulations. These rules distort, and in some cases destroy, spontaneous order. They replace decentralized decision-making and plans with the coercive plans of global elites.. The result has ranged from economic stagnation to protests to expensive and unreliable energy production.

Nationalists and populists should work aggressively to roll back these legal and regulatory means of control. And they are. But they should not create new barriers to global spontaneous order – whether through onerous tariff schemes, activist industrial policy, or special regulatory treatment for large domestic companies or industries.

A spontaneous global order emerges from the bottom-up, not the top-down. It develops through voluntary exchange and association rather than coercion. It is not subject to the whims, interests, or ideology of a few influential people like Klaus Schwab. Bottom-up voluntary action means that a spontaneous global order will be decentralized, adaptive, creative, and innovative.

Creating this order requires clear rules that apply equally across the board. These rules should be relatively straightforward and stable. We do not need hordes of bureaucrats or regulators to “manage” this new global order. Voluntary association also means freedom. The spontaneous global order that emerges from decentralized coordination will be an open, rather than a closed, system where new entrants are welcomed.

In a spontaneous global order, incumbents have limited ability to protect themselves from new competitors. New entrants who are smaller and nimbler will force continued innovation and improvement from established players. Rather than having legal and regulatory moats that protect entrenched interest groups, in a global spontaneous order everyone can pursue their own endeavors in the international arena. This free, open competition will unleash far more creativity, innovation, and organic solutions than the previous global elite, Klaus Schwab, and the WEF could have imagined.

Last week, the Supreme Court heard Mahmoud v. Taylor, a case that exposes a glaring injustice in America’s public school system.

During the proceedings, Justice Ketanji Brown Jackson made a stunningly tone-deaf remark, suggesting that religious families concerned about their free exercise rights being violated by public schools shouldn’t worry — they can simply send their kids to private school or homeschool.

That’s easy for her to say. Justice Jackson sent her own children to Georgetown Day School, where tuition nears $60,000 a year, a cost that rivals Harvard University. For most families, this isn’t an option; it’s a fantasy.

Her flippant comment inadvertently revealed a harsh reality: religious families are forced to fund a public school system they cannot use if they want an education aligned with their faith, all while being bound by compulsory education laws. This setup is discrimination, plain and simple.

Imagine if Jackson argued that public schools could discriminate against other groups — say, based on race — because parents could just opt out. That proposal would rightly be shot down. So why do some liberals think it’s acceptable to dismiss religious families’ rights? School choice is the answer to this injustice, ensuring all families can access an education that respects their values.

The public school system, as it stands, functions as a monopoly that disproportionately harms religious families. If you’re a parent — Christian, Jewish, Muslim, or otherwise — who believes your child’s education should reflect your deeply held beliefs, you face a brutal choice. You can send your child to a public school, where the curriculum or environment may conflict with your spiritual or moral convictions, or you can pay out of pocket for a private religious school or homeschooling.

But you’re already taxed to support the public system, whether you use it or not. This double taxation is a direct violation of fairness. Religious families aren’t just paying for a service they don’t use; they’re being coerced into subsidizing a system that undermines their worldview.

Compulsory education laws make this trap even tighter. Every state mandates that children attend school until a certain age. For religious families, this means they’re legally obligated to engage with an education system that may contradict their beliefs.

Imagine being forced to send your child to a school that teaches ideas you find morally or spiritually objectionable, with no realistic alternative unless you’re wealthy enough to afford private school tuition. Justice Jackson’s privilege — affording Georgetown Day School’s exorbitant costs — blinds her to the reality most families face. The median US household income is about $80,000; a $60,000 tuition bill isn’t a choice — it’s an impossibility. Her suggestion that families can just opt out ignores the financial and legal barriers that make such options inaccessible for millions.

Systemic bias in a government system you’re forced to interact with isn’t just unfair; it’s a violation of the First Amendment’s free exercise clause. But, some progressives seem to shrug off this particular discrimination as inconsequential. Consider the absurdity of applying Jackson’s logic to other groups. If public schools discriminated against students based on race, would anyone accept the argument that families could simply homeschool or pay for private school?

Of course not. Such a policy would be condemned as a violation of civil rights. So why is it deemed acceptable for public schools to disregard the religious beliefs of families, forcing them to either comply or bear crippling financial burdens?

The double standard is glaring. This selective indifference reveals a troubling bias: some progressives prioritize certain protected classes while dismissing the rights of the religious as secondary.

Religious families aren’t asking for special treatment — they’re asking for the same consideration we extend to others with unique needs. The Individuals with Disabilities Education Act (IDEA) offers a clear precedent. Under IDEA, if a public school cannot meet the needs of a student with disabilities, the district must cover the cost of a private school that can. This acknowledges that one-size-fits-all education doesn’t work for every child.

Why not apply the same logic to religious families? If a public school’s curriculum or environment conflicts with a family’s sincerely held beliefs, they should be able to redirect their children’s taxpayer-funded education dollars to a school — public or private, religious or not — that aligns with their values.

School choice is the solution. Programs like education savings accounts, vouchers, or tax-credit scholarships empower families to choose schools that best meet their needs.

Forcing religious families to fund a system they can’t use while denying them alternatives isn’t neutrality — it’s discrimination. School choice levels the playing field, ensuring that all families, not just the wealthy like Justice Jackson, can access an education that respects their beliefs.

School choice also aligns with the principles of a free society. The government doesn’t force families to use public hospitals or grocery stores, recognizing individual choice in critical areas. Education, which shapes a child’s worldview, should be no different. Religious families aren’t trying to dismantle public schools; they want the freedom to opt out, or choose differently, without financial penalty. We already apply this logic to students with special needs through IDEA. Extending it to religious families would ensure the public school system doesn’t trample their constitutional rights.

Mahmoud v. Taylor is a wake-up call. Religious families deserve better than being trapped in a system that dismisses their values. Justice Jackson’s accidental case for school choice — highlighting the privilege of opting out — should spur action.

School choice should be expanded nationwide, giving every family the power to choose an education that honors their beliefs. Just as we reject discrimination against other groups, we must reject it against religious families.

After nearly a month under the Trump administration’s renewed tariff regime, signs of economic strain are beginning to surface across US supply chains, inventories, and consumer sentiment. The lag effect of international shipping schedules means the real-world impact of “Liberation Day” is only just beginning to materialize. 

Containerized imports from China, which still represent a significant portion of US inbound goods, have plunged by as much as 60 percent, according to industry trackers. Retailers are now bracing for rolling product shortages that could emerge as early as mid-May, with broader consequences unfolding into the summer and fall. 

Historically, ocean freight between China and the US has taken between 20 to 45 days to arrive, which means goods ordered or canceled in early April are only now reaching or failing to reach US ports. The Port of Los Angeles has reported a dramatic increase in blank sailings (ships arriving empty) with a combined expected loss of over 350,000 twenty-foot equivalent units (TEUs) in May and June. These shipping disruptions have already begun reducing stock available for core retail categories, most notably toys, clothing, and seasonal goods. The Toy Association reports that 80 percent of toys sold in the US are sourced from China, and nearly 80 percent of mid-sized toymakers are canceling or delaying summer manufacturing orders. With holiday goods typically produced in spring for fall and winter delivery, the timeline for many of these products is now irrevocably disrupted.

Container Ship Tonnage (TEU) – Departures from China to the United States (white); Container Ship Count – Departures from China to the United States (blue); “Liberation Day” (red horizontal dash), 2024 – present(Source: Bloomberg Finance, LP)

Another early casualty is likely to be the “back-to-school” category. In categories like apparel, much of the low-end manufacturing has shifted to Bangladesh or Vietnam, but mid-market categories like coats, jackets, and knitwear remain heavily reliant on Chinese factories. Clothing retailers are now pausing orders, anticipating that new tariffs (in some cases as high as 145 percent) will make many Stock Keeping Units (SKUs) unprofitable. As a result, school-year shopping for uniforms, jackets, and children’s basics may encounter limited selections, significant price hikes, or both. Halloween and winter holidays could face even more pronounced shortages: seasonal decorations, party supplies, and giftable products, including dolls, electronics accessories, and low-cost gadgets, all of which are disproportionately sourced from China.

While electronics have thus far remained exempt, that too is in question. If tariffs are extended to those goods, even the carefully planned holiday doorbusters for televisions and gaming consoles could be derailed. Many big-box retailers have already submitted tentative purchase orders for these items, but they will need to be finalized soon to meet fourth-quarter demand. In response to growing uncertainty, some stores are reverting to pandemic-era inventory strategies: simplifying product assortments, prioritizing core SKUS  with dependable margins, and reducing speculative or novelty offerings. Doing so may help preserve profitability, but it will come at the considerable cost of consumer choice.

Importantly, the impact is not limited to supply chain timing. The structure of the tariff itself – levied on the wholesale value at the port of entry – poses a particular challenge for small- and medium-sized firms, which generate over 80 percent of US employment. Those same firms often lack the capital reserves to absorb rapid cost increases or to pivot quickly to alternative suppliers. Some companies are exploring partial assembly or finishing of goods within the US to reduce tariff exposure, but as a workaround, that option is both capital- and labor-intensive, and in any event unlikely to be scalable within the next quarter or two. For now, many smaller firms are canceling orders outright, leading to a decline in new business activity, weakening earnings outlooks, and rising inventories of outdated or non-tariffed goods.

Transportation markets are signaling contraction. Truck sales declined sharply in March, while trucking demand is expected to drop significantly by the end of May as import volumes continue to fall. This will likely precipitate layoffs in the logistics sector, closely followed by job cuts in retail and manufacturing as firms recalibrate operations in response to declining sales. As was the case in the early stages of the COVID-19 pandemic, high policy uncertainty is prompting a freeze in both corporate investment and consumer spending. Small business optimism is approaching post-2008 lows, and consumer sentiment (as measured by the University of Michigan) has dropped to its lowest level in nearly three years.

From a macroeconomic perspective, trade-induced disruptions may already be weighing on GDP. The first quarter of 2025 saw a contraction — the first in three years — largely attributed to a ballooning trade deficit and frontloaded inventory building ahead of tariff announcements. Corporate earnings revisions have already turned sharply negative, especially for retail and consumer goods sectors.

The timeline for visible retail disruption is short. By late May or early June, consumers are likely to encounter out-of-stock conditions in key seasonal categories, including toys, back-to-school apparel, and holiday merchandise. Price tags will rise on others, particularly where supply has been disrupted and demand is relatively inelastic. The full impact will depend on both policy decisions and corporate strategy. If tariffs are softened or phased in more gradually, some supply gaps may be managed. But without such relief, summer could bring not only empty shelves, but also the start of a broader economic contraction.

NFIB Small Business Uncertainty Index, 2019 – present(Source: Bloomberg Finance, LP)

In the worst case, retailers who over-ordered in anticipation of demand could find themselves with late-arriving products mismatched to seasonal demand — a virtual replay of spring 2022, during which holiday goods arrived just in time for warm weather clearance sales. With consumer spending already showing signs of weakness, that type of mismatch could result in discounting, margin compression, and layoffs.

In short: even if a trade deal emerges in the coming months, the damage to supply chains and consumer confidence may already be done. Retailers may be forced to accept a leaner, less profitable, and more uncertain second half of 2025. And American citizens may find higher prices, fewer goods, falling variety, and declining employment opportunities. The first impacts of tariff-driven disruption are poised to arrive: some irreversibly, some not. There is still time to prevent the most serious consequences of imposing a tax on comparative advantage, and decoupling by fiat, but not much.    

A cursory review of public sentiment portrays the Affordable Care Act (ACA) as a triumph of social policy, with nearly two-thirds of Americans holding a favorable view of the 2010 healthcare law. This popularity rests on a precarious foundation, as the ACA’s sustainability is undermined by fragile structural and financial mechanisms. Just like Medicare, beneath its widespread acclaim lies a contentious and unsustainable undercurrent.  

ACA and Medicare, by design, impose a disproportionate burden on younger generations.  

The ACA’s risk-pooling mechanisms and individual mandate require younger, healthier individuals to subsidize older, high-risk populations, inflating premiums for those with limited financial resources. Medicare’s payroll tax structure intensifies this inequity, extracting funds from young workers to sustain a program facing looming insolvency risks. According to the Medicare Trustees’ 2024 Report, the Hospital Insurance Trust Fund is projected to be depleted by 2036.

This intergenerational transfer prioritizes immediate social benefits over long-term fiscal sustainability, potentially jeopardizing future benefits for younger cohorts. Such dynamics raise critical questions about distributive justice, challenging the fairness of policies that burden the young to support current beneficiaries while offering uncertain returns. 

The Flawed Formation 

Pragmatic politics necessitates negotiation and maneuvering among competing interests, and the adoption of the ACA was no exception. Lobbying groups representing healthcare interests spent $263 million in the first half of 2009 to shape the legislation, according to OpenSecrets. 

Older generations wielded significant political influence during this process. Older, sicker patients consume more healthcare, while younger, healthier individuals are essential for insurers to balance risk pools — paying premiums without incurring substantial medical costs.  

The Peterson-KFF Health System Tracker reports that in 2021, individuals aged 55 and over accounted for 56 percent of total health spending, despite comprising only 31 percent of the population, while those under 35 represented 44 percent of the population but only 21 percent of spending. Per capita, older adults (65+) spent $11,300 annually, compared to $2,000 for ages 5–17 and $4,500 for ages 18–34, per Medical Expenditure Panel Survey (MEPS) data. 

This disparity was a focal point during the ACA’s formation, and younger generations bore the brunt of the outcome. Insurance lobbyists advocated for a 5:1 premium ratio between older (high-usage) and younger (low-usage) clients, reflecting actuarial costs. The American Association of Retired Persons (AARP) pushed for a 2:1 ratio to protect older enrollees, and the final compromise, set at 3:1 under Section 1201 of the ACA, capped older enrollees’ premiums at three times those of younger ones. 

The younger generation lost the political battle. 

The established ratio deviates from fairness. A 2016 American Academy of Actuaries study notes that the 3:1 age band compresses pricing, forcing younger enrollees to pay premiums exceeding their expected healthcare utilization. For example, a healthy 25-year-old with minimal medical needs might pay a premium far outsizing their spend. This effectively subsidizes the insurance coverage of a 60-year-old with multiple comorbidities.  

The ACA’s Medicaid Mirage: A Numbers Game with Hidden Costs 

The ACA is often praised for reducing the uninsured rate, with 20-24 million gaining coverage from 2010 to 2016. But a portion of this achievement stems from Medicaid expansion, raising questions about the quality and sustainability of the care provided. A reliance on Medicaid distorts the ACA’s success, burdens the system and patients with subpar care, and shifts costs onto younger taxpayers, challenging its equitable promise. 

The KFF noted 91 million total Medicaid enrollees in 2022, up from 57 million in 2010. Medicaid expanded enrollment by 21.3 million people in 2024. One in five people now use Medicaid as their primary program for health insurance. This is expensive, and Medicaid — funded mostly by federal and state taxes from working-age Americans — is putting a growing strain on state budgets.

California, for example, is estimated to spend $42 billion on Medi-Cal (Medicaid) in 2025-2026. This is a $4.5 billion increase over the previous budget. The state just had to take out a $3.44 billion loan to cover Medicaid expenses for a month. 

This is not financially sustainable. 

This Medicaid approach is doubly problematic for patients due to the program’s structural deficiencies in delivering access to quality care. Medicaid’s low reimbursement rates — averaging 70 percent of Medicare’s, per CMS — deter provider participation. Medicaid patients have a 1.6-fold lower likelihood in successfully scheduling a primary care appointment and a 3.3-fold lower likelihood in successfully scheduling a specialty appointment when compared with private insurance.

Critics might argue that Medicaid expansion addresses unmet needs, and there is merit to some of those claims. But these gains are overshadowed by access barriers and fiscal unsustainability. Significant opportunity costs are left unmet. 

Intergenerational Inequity: The Fragile Fiscal Future of the ACA and Medicare 

The notion of a social contract suggests that generational taxation burdens balance over time, but a critical question persists: will promised benefits endure for future generations? This concern impacts both the ACA and Medicare, both of which impose significant costs on younger cohorts while ignoring solvency and long-term viability risks. 

Medicare beneficiaries often receive benefits far exceeding their contributions, creating a fiscal imbalance. The Urban Institute estimates that a 2025 retiree, contributing $87,000 in payroll taxes over their career will receive $274,000 in Medicare benefits (inflation-adjusted). Low-income beneficiaries, contributing minimal taxes, benefit significantly. An aging population, sluggish birth rate, and rising costs may force benefit cuts or tax hikes, and possible diminishing returns for future contributors. 

The ACA’s fiscal framework similarly relies on subsidies and taxes under pressure. The Congressional Budget Office forecasts $1 trillion in marketplace subsidies over the next decade, driven by rising premiums and enrollment. The ACA has been able to shield the true cost of insurance by offering premium tax credits. These tax credits create artificial demand and support for the ACA by cloaking the true cost of insurance. These tax credits are available to incomes between 100 percent and 400 percent of the federal poverty level. 

Without tax subsidies, the average family of four would pay $27,025 for health insurance in 2024. If these expire in 2025, as they are set to do, the CBO projects 2.2 million will lose coverage in 2026. Premiums would increase 4.3 percent in 2026, and an estimated 7.9 percent in 2027. To put this in context, for those earning 400 percent of the poverty level, premiums could increase by approximately $2,900 per person each year.The ACA and Medicare’s insolvency risks undermine their equitable vision.

Younger generations, taxed heavily today, may inherit a hollowed-out system unable to deliver care. Without reforms, this trajectory betrays the cohort sustaining it, raising profound concerns about distributive justice. The ACA’s ambition was not its downfall; its disregard for economic principles will be. Subsidies without supply-side reforms (e.g., increasing physicians or lowering drug costs) inflate demand against constrained resources. Mandates without flexibility stifle markets. Moral hazard without cost containment will break the system that’s profiting insurance companies over physicians and patients.