War and tariffs are not an economic policy

The National Review reports that in pursuing both sweeping tariffs and a shooting war with Iran, the administration has forfeited its signature political asset: a claim to economic stewardship. I would put the diagnosis more precisely. These are not two separate errors that happened to coincide. They are the same error, expressed twice — the belief that national vigor can be demonstrated by disruption rather than built by discipline.

Consider what sound economic stewardship actually requires. It requires that the markets which price American debt believe, at every moment, that the government knows the cost of what it is doing and has arranged to pay it. Tariffs of the breadth described here are a tax — a tax levied on the supply chains of American manufacturers, on the household budgets of American consumers, and on the confidence of every trading partner whose cooperation we will eventually need. The revenue they raise is real; the disorganization they impose on production is also real, and in my judgment the disorganization tends to outrun the revenue. I argued in the Report on Manufactures that selective encouragement of industry is a legitimate tool of national policy — but selective is not the same as indiscriminate, and encouragement is not the same as embargo.

Then add war. Military operations are expensive in treasure as well as blood. A government already running substantial deficits — I note as inference, not recollection, that federal deficits in this era run into the trillions — cannot absorb the shock of active hostilities without either borrowing more, taxing more, or degrading the currency. Each of those choices extracts a price. Borrowing more raises the interest cost on all existing debt. Taxing more constrains the private economy. Degrading the currency is the most insidious option: it is a hidden tax on every creditor, every wage earner, and every bondholder who trusted the government's promises. Public credit, once established, must be defended as jealously as any fortification — and it is far easier to damage than to rebuild.

I am not a pacifist, and I would not counsel a great commercial republic to shrink from necessary force. But necessity is the operative word. The National Review account, taken at face value, suggests the administration entered this conflict without first securing the fiscal foundation that would make it sustainable. That is not strength; that is improvidence dressed in the uniform of strength. An energetic executive is necessary — I have argued that point my entire career — but energy applied without calculation is not vigor. It is recklessness.

My recommendation is direct. The Treasury should present to Congress and the public a clear accounting: what these tariffs cost in lost output, what they raise in revenue, and what the military operations cost per quarter. Lay the numbers on the table. Then let Congress decide, in full light, whether to fund what the executive has committed the nation to. If the case for both the tariff regime and the war is sound, that accounting will survive scrutiny. If it will not survive scrutiny, the public deserves to know that before the debt compounds further. A nation seen squabbling before paying its bills pays more, forever — but a nation that runs up bills in the dark pays more still.