The true test of civilization is, not the census, nor the size of cities, nor the crops — no, but the kind of man the country turns out.

— Ralph Waldo Emerson

The minutes from the March FOMC meeting were released yesterday and we discover that the balance sheet theme is really coming together. The massive portfolio held by the Fed is allegedly going to be reversed over the coming years. The way to initiate this shrinkage in the balance sheet is to first stop reinvesting the return that it is making on all the bonds it holds. In the minutes, we learn that they are considering two options for how to do this:

One of the benefits of being an extremely powerful lobby in Washington is the ability to live off the taxpayers without ever having to tell the taxpayers what you do with their money. This includes two of the most powerful lobbies in DC: the Fed and the Pentagon.1  

[This article is adapted from a Mises Weekends audio interview.]

As the Trump administration continues to try to figure where it wants to go with healthcare, his team at the Treasury is readying tax reform. Unfortunately, much like the Secretary Steve Mnuchin’s film Suicide Squad, initial optimism is facing the bitter reality of horrible early reviews.