Economist and author John Tamny joined Chicago’s Morning Answer with Dan Proft to discuss the role of government in economic growth, the debate over federal spending, and the consequences of currency policy under recent presidents.
Tamny, editor of RealClearMarkets and author of The Money Confusion, challenged the assertion made by Treasury Secretary Scott Bessent that a government shutdown could harm U.S. economic growth. He argued that government spending does not generate prosperity but instead acts as a cost that diverts resources from the private sector. According to Tamny, the productive capacity of the American economy comes from private enterprise, not Washington bureaucracy.
The conversation also touched on the long-standing debate over federal revenues and deficits. Tamny rejected the idea that cutting spending alone will restrain government growth, contending instead that the underlying problem is excessive revenue collection. In his view, high revenues enable lawmakers to expand programs and debt, regardless of rhetoric about fiscal responsibility.
Currency policy took center stage as Tamny criticized the trend of pursuing a weaker dollar. He argued that presidents directly influence the strength of the dollar and that President Trump, like Richard Nixon and Franklin Roosevelt before him, favored devaluation. While often defended as a way to boost exports, Tamny warned that a weak dollar functions as a hidden tax on investment by pushing capital into hedges like gold and real estate rather than into productive businesses. By contrast, he praised Bill Clinton’s administration for maintaining a strong and stable dollar, which he linked to robust economic growth in the 1990s.
Looking forward, Tamny suggested that instability in the dollar could open the door for private alternatives, such as corporate-backed digital currencies or tokenized assets. He believes that younger generations and new financial technologies will ultimately pressure markets to create stable money, whether or not the federal government takes the lead.
Tamny concluded that the U.S. economy remains strong thanks to its people, but argued that it could be significantly more prosperous if policymakers embraced stable money and reduced government’s role in allocating resources.