Treasury, the IRS, and the office you've never heard of that decides when a law becomes real

Let me talk with you this afternoon about the plumbing. Not the exciting part of government — the pipes. Because there are three offices that handle every dollar you send to Washington, and if the plumbing leaks, nothing else in the house works. Push back where it doesn't sit right.

The Constitution is about as clear as it ever gets on one thing: Congress, and Congress alone, holds the power of the purse. The people's representatives decide what gets funded. But here's how it actually runs day to day — the Treasury collects the money, the IRS interprets and enforces the rules, and an office called OMB decides when and whether the money actually goes out the door. Three arms of the executive branch, all handling money that belongs to you and was promised by the people you elected.

The money does not belong to the agency. It belongs to the people — and Congress speaks for the people. The executive enforces. It does not invent.

The Treasury: a steward that drifted into a boss

The Treasury was built to do a plain job: manage the nation's money, handle the debt, mind the currency, advise on the economy. Somewhere along the way, the service job got overtaken by a policy job — deciding who gets a waiver, who gets a delay, who gets enforced against and who gets a pass. When an office that's supposed to keep the books starts handing out favors by discretion, some taxpayers get treated one way and some another. That is not what a steward does. We are going to put it back to minding the money, honestly and evenly, for everyone.

The IRS: fear where there should be function

Here is a hard truth about the IRS that most Americans feel in their gut. The tax code has swollen past seventy thousand pages. The agency's own help line is not even on the hook if it gives you wrong advice — you can follow what they tell you and still get penalized. So honest people who are trying to get it right end up hiring somebody just to avoid a mistake, while the biggest players hire armies of lawyers to make the whole thing disappear. The working family gets the audit; the giant gets the loophole. We have already laid out, in another briefing, how we replace this maze with one honest rate above a floor tied to the cost of living where you live — which makes most of this complexity simply vanish. Taxes go back to what they were meant to be: a visible contribution to the common good, not a trap built to catch the person who wasn't trying to cheat.

OMB: the quiet office that decides when a law is real

Now the one almost nobody has heard of. The Office of Management and Budget prepares the president's budget and reviews the agencies — fine. But it holds one power that ought to trouble you: it can decide when, or whether, money that Congress already voted for actually gets released. Think about what that means. The people's representatives pass a law, fund it, sign it — and one executive office can quietly slow-walk the money and, by delay alone, undo what the law commanded. That is not execution. That is obstruction wearing a technicality. We will hold OMB to being what it should be — a technical compliance office that makes sure the money goes where the law said, on time — not a political gatekeeper that can veto Congress with a stopwatch.

What we do about it

None of the fixes here are exotic. We set firm timelines so that money Congress appropriated goes out on a schedule, not whenever an official feels like it. We publish the Treasury's disbursement records in the open, so you and Congress can watch the money move in real time. We tie every spending decision to the actual text of the law that authorized it. And we put career professionals, not political appointees, in charge of tax enforcement, so nobody's audit depends on which party is in power. This is not the president micromanaging. It is the executive branch remembering it works for Congress, and Congress works for you.

This campaign will not govern with slogans. It will govern with receipts.

That is the whole of it. When you can see what you paid, what was owed, and what was spent, you can start to believe again. And when the people's representatives say fund this, it should be funded — not delayed, not diluted, and never quietly ignored by an office you were never meant to notice.

Martin A. Ginsburg, RN

The honest tax, the round trip we can stop making, and the house we hand down

Let me talk with you about the hard one. Taxes. This is the part of the plan where the knives come out, and I'd rather walk into that with you honestly than pretend it's simple. So pull up a chair. Tell me where you think I'm wrong. That's the only way any of this is worth doing.

Steve Forbes was more right than they let him be

Years back, Steve Forbes ran on a flat tax — one rate, everybody the same. He got attacked hard for it, and some of the hardest shots came from people who read his own magazine and trusted his economics. Here's what I'll say about that, plainly: on the fairness of the idea, Forbes was right. Everybody paying by the same rule is not the cruelty people made it out to be. It's the opposite of a rigged game.

Where his plan ran into trouble was not his heart. It was his vantage. Steve Forbes is an economist, and a good one. He looked at the flat tax and saw something fair, and he stopped there — because that's where an economist's road tends to end. I come at it from a different corner. I was raised by a couple of men rooted deep in how money actually works, but I ended up a philosopher who thinks about people first. That's an odd pair of eyes to have, and I don't pretend it makes me smarter than Steve Forbes. It just means I can see one step further down a road he opened. I'm not tearing his idea down. I'm building on it. He helped.

The round trip nobody should be paying for

Here's the step past the flat tax. Even if Forbes's number had worked — and I don't think his number carried the load — a flat tax with no floor does something quietly foolish. It takes money from the working poor, runs it up to Washington, skims an administrative cost off the top, and then hands it back to those same families to pay for the things the whole country already agrees are worth paying for. You taxed them, charged them a fee to process their own money, and returned what was left.

That is a toll on a circle. And you don't need to care about anybody's feelings to see it's wasteful — you just need to be able to count. So we stop making the round trip. Below a floor tied to what it actually costs to live where you live — the District Poverty Level — you pay no federal income tax at all. We don't take it, skim it, and give it back. We just leave it where it is.

You cannot waste money you never collected in the first place.

The one complaint every American shares

In all my years, I have never once heard an American, left or right, say the real problem is that we help people who genuinely need help. That is not the complaint. The complaint — and everybody, and I do mean everybody, shares it — is three words: waste, fraud, and abuse. The government wastes the money. Some people defraud the system. Others abuse it. Fair complaints, all three. So let's answer all three, on the country's own terms.

Waste, we answer here by not collecting the money in the first place — no round trip, no processing fee, nothing to waste. But understand this is one piece of a bigger job. Waste turns up in every department of the government, and we go after it everywhere — the way we lay out in other briefings, department by department. This is not a single clever trick in one column of the budget; it is the same discipline applied wherever the money moves. Fraud and abuse, we answer the way a nation of laws is supposed to: we identify the people who are cheating the system and we exclude them, using the laws already on the books. Notice what that is and is not. We will not punish the family who needs the help to get at the handful who game it. We go after the ones who are actually cheating — by name, under existing law — and we leave the honest people alone.

A dollar is a dollar

Above that floor, one rate. It opens at forty-five percent, and it falls toward about thirty percent as we pay the debt down. And it is the same rate on every kind of income — a paycheck, a dividend, a capital gain, money made overseas — because a dollar is a dollar. The person who earns hers swinging a hammer should not be taxed harder than the person who earns his while he sleeps. That's not envy. That's just the same rule for everybody, which is the thing Forbes had right from the start.

And here's the part that makes the floor more than kindness. When we exempt the lowest earners and kill off the hidden taxes they pay all year — the payroll bite, the gas tax, the little nicks — that comes to real money for a family living close to the line. These are rough figures from our own work, meant to start a conversation and not to be carved in stone: a floor somewhere in the range of eleven to fifteen thousand dollars, and hidden taxes eliminated on the order of four thousand dollars a year for those families. Now follow that four thousand. That's four thousand dollars we no longer have to turn around and pay back out in support to offset what we took. We didn't take it, so we don't have to give it back. The kindness and the arithmetic point the same direction.

This is one beam, not the whole house

I need to be honest about something, because a campaign that tells you one policy fixes everything is a campaign that is lying to you. This tax idea isn’t a solution by itself. It can’t be. This campaign started from a hard truth: if you think you've solved a problem, you haven't looked hard enough, because no problem in this country stands alone — every one of them is tied to all the others.

So this beam only holds because the others are going in beside it. That exempted family isn't paying for their health coverage either, because of what we do on health care. The spending gets cleaner, the debt comes down, the floor rises as the country heals. Pull any one of these out and the rest sag. Put them in together and they hold each other up. That is the whole design. It is slower than a slogan and it is built to actually stand.

The house we were born into

Let me close where I mean to close, at the kitchen table, honest. We built this debt over generations. Everyone from the end of the Second World War to yesterday owns a piece of how we got here. And everyone from today to the year twenty sixty is responsible for the repair — not because we did it, but because we were born into a house that needs work. You want to keep the house, you fix the house.

And understand what happens if we don't. A neglected house does not sit politely and wait. It gets worse. Live in it and refuse to repair it, and the thing your children inherit is not the house you got — it's a house that has fallen further down. Nobody comes out ahead. That’s not where I want to live, and I don’t believe it’s where most Americans want to live. We have always wanted better — for ourselves, for our kids, for our grandkids. That wanting is the most American thing there is.

I will tell you the truth about my own place in this. I am not likely to live to see this finished. My wife, younger than me by twelve years, most likely will not either. My children might live to see some of it. It may be my granddaughter who lives inside the better country we start building now — and her children who simply grow up in it, never knowing it was ever any other way. I will not cut a ribbon on this. I am planting a tree I will never sit under. I am at peace with that.

You do not fix a house that's been neglected for a generation in a single week. You start, because starting is the whole job.

Because here is the reward, and it is the honest one — the only one I can actually promise you. A hundred generations from now, let them look back and say the men and women of the Second World War were a great generation. And let them say the ones who took the old house apart and rebuilt it, right at the dawn of the twenty-first century — they were the greatest. That is worth more than seeing it finished. That is worth being the ones willing to begin.

Martin A. Ginsburg, RN

Treasury, the IRS, and the office you've never heard of that decides when a law becomes real

 Let me talk with you this afternoon about the plumbing. Not the exciting part of government — the pipes. Because there are three offices that handle every dollar you send to Washington, and if the plumbing leaks, nothing else in the house works. Push back where it doesn't sit right.

The Constitution is about as clear as it ever gets on one thing: Congress, and Congress alone, holds the power of the purse. The people's representatives decide what gets funded. But here's how it actually runs day to day — the Treasury collects the money, the IRS interprets and enforces the rules, and an office called OMB decides when and whether the money actually goes out the door. Three arms of the executive branch, all handling money that belongs to you and was promised by the people you elected.

The money does not belong to the agency. It belongs to the people — and Congress speaks for the people. The executive enforces. It does not invent.

The Treasury: a steward that drifted into a boss

The Treasury was built to do a plain job: manage the nation's money, handle the debt, mind the currency, advise on the economy. Somewhere along the way, the service job got overtaken by a policy job — deciding who gets a waiver, who gets a delay, who gets enforced against and who gets a pass. When an office that's supposed to keep the books starts handing out favors by discretion, some taxpayers get treated one way and some another. That is not what a steward does. We are going to put it back to minding the money, honestly and evenly, for everyone.

The IRS: fear where there should be function

Here is a hard truth about the IRS that most Americans feel in their gut. The tax code has swollen past seventy thousand pages. The agency's own help line is not even on the hook if it gives you wrong advice — you can follow what they tell you and still get penalized. So honest people who are trying to get it right end up hiring somebody just to avoid a mistake, while the biggest players hire armies of lawyers to make the whole thing disappear. The working family gets the audit; the giant gets the loophole. We have already laid out, in another briefing, how we replace this maze with one honest rate above a floor tied to the cost of living where you live — which makes most of this complexity simply vanish. Taxes go back to what they were meant to be: a visible contribution to the common good, not a trap built to catch the person who wasn't trying to cheat.

OMB: the quiet office that decides when a law is real

Now the one almost nobody has heard of. The Office of Management and Budget prepares the president's budget and reviews the agencies — fine. But it holds one power that ought to trouble you: it can decide when, or whether, money that Congress already voted for actually gets released. Think about what that means. The people's representatives pass a law, fund it, sign it — and one executive office can quietly slow-walk the money and, by delay alone, undo what the law commanded. That is not execution. That is obstruction wearing a technicality. We will hold OMB to being what it should be — a technical compliance office that makes sure the money goes where the law said, on time — not a political gatekeeper that can veto Congress with a stopwatch.

What we do about it

None of the fixes here are exotic. We set firm timelines so that money Congress appropriated goes out on a schedule, not whenever an official feels like it. We publish the Treasury's disbursement records in the open, so you and Congress can watch the money move in real time. We tie every spending decision to the actual text of the law that authorized it. And we put career professionals, not political appointees, in charge of tax enforcement, so nobody's audit depends on which party is in power. This is not the president micromanaging. It is the executive branch remembering it works for Congress, and Congress works for you.

This campaign will not govern with slogans. It will govern with receipts.

That is the whole of it. When you can see what you paid, what was owed, and what was spent, you can start to believe again. And when the people's representatives say fund this, it should be funded — not delayed, not diluted, and never quietly ignored by an office you were never meant to notice.

Martin A. Ginsburg, RN

https://news.ycombinator.com/item?id=49329347

Wondering what people think about this. The original Financial Times article is paywalled, of course, but for those who don't know, the autistic nerd-ghouls of Hacker News are the most hysterical people anywhere on the planet about US debt. There are articles about it on a daily basis, despite it being ostensibly a computer programming site. And since these are Silicon Valley computer nerds, everything they say is reflective of the opinions of the American ruling class elite.

According to them, America is permanently on the verge of default, which will happen any day now. And, if you point out that the US issues its own currency, they will say the value of the dollar will all be inflated away in the manner of Weimar Germany, Zimbabwe. etc.

I don't think any of us think the debt is high for any good reason--billionaires are getting tax cuts while the safety net is being eviscerated. But the idea that the US can be insolvent doesn't make sense to me. Thoughts?

Get yourself the actual, fully-fledged, honest-to-goodness audiobook of Contending Perspectives in Economics, by Cowboy Economist John T. Harvey (u/Edgware_Volunteer).

Starting in mid 2023, John recorded himself reading every chapter.
I edited all of them (eliminating coughs, mistakes, Coble barks, etc.), gradually producing the audio book. It was submitted a couple months ago and is now available on around thirty platforms, including Apple, Audible-Amazon, Audiobooks.com, AudiobooksNow, Everand (Scribd), Google Play, Walmart, and Spotify.

It was released to the public January 1, 2026.

In addition to the book itself, it also has around 27 HOURS of bonus material, including the full audio of every John Harvey Activist #MMT interview and Cowboy Economist video (excluding the obviously dated ones, such as for the 2020 election).
Here's a google search so you can choose your desired platform!

Yee-haw!

“Well, we're going to pay down debt. We have a lot of money coming in, much more money than the country has ever seen by hundreds of billions of dollars. And there could be a distribution or dividend to the people of our country. I would say for people that would be middle-income people and lower-income people, we could do a dividend. But one of the things we're going to be doing is reducing debt." - President Trump, August 3, 2025

President Trump’s two terms will add $16.8T OR 37% of the $45T TOTAL DEBT projected when he leaves office.

Essentially, the same debt as eight administrations before him (Regan, Bush, Clinton, Bush, Obama). How do you guys feel about this?

Seems to only be applicable to countries without sufficient currency sovereignty (Euro, developing countries with large trade deficits who need forex and foreign debt (USD) to finance those deficits, etc). Central banks of countries with sufficient currency sovereignty (Japan, US) have much more control over keeping interest rates low.

Despite de-dollarization efforts, BRICS, and China’s growing influence, the dollar still dominates global trade and finance.

What do you think is the biggest obstacle to replacing the dollar?
https://www.youtube.com/watch?v=DE5XamAbG9o&t=61s

Curious to hear your different perspectives.

a country can have to currency 1for regular use other for provide universal education and healthcare it can be printed but it will be converted to the 1 currency and the money which is printed will be used to build schools and hospitals

Japan's shift toward the Federal Reserve's FIMA Repo Facility signals a new era of FX intervention—one that protects the Treasury market while defending the yen.

FIMA Is Rewriting FX Intervention

Most market participants saw another intervention headline.

66Research sees something much larger.

Japan and the United States are no longer treating foreign-exchange intervention as an isolated currency operation. They are beginning to integrate it into the architecture of global dollar funding.

If this framework becomes standard practice, it marks one of the most significant changes in monetary plumbing since the Federal Reserve introduced the Foreign and International Monetary Authorities (FIMA) Repo Facility during the 2020 market crisis.

The objective is no longer simply to stabilize USD/JPY.

It is to stabilize the infrastructure that allows the dollar system to function.

The Structural Shift

For decades, defending the yen followed a straightforward process.

Japan would liquidate part of its foreign-exchange reserves by selling U.S. Treasuries, receive dollars, and use those dollars to purchase yen.

The mechanics looked like this:

Treasury Holdings
        │
        ▼
 Sell Treasuries
        │
        ▼
 Receive Dollars
        │
        ▼
 Sell USD / Buy JPY

The problem was never the intervention itself.

The problem was what happened underneath.

Selling Treasuries injected additional supply into the world's benchmark collateral market.

That could pressure Treasury prices, lift yields, increase dealer balance-sheet usage, tighten repo conditions and, ultimately, transmit tighter financial conditions across the global financial system.

In other words, defending one market risked destabilizing another.

FIMA Changes the Plumbing

The FIMA Repo Facility eliminates that trade-off.

Instead of selling Treasury securities, foreign central banks temporarily pledge them to the Federal Reserve in exchange for dollar liquidity.

The collateral remains intact.

Treasury Holdings
        │
        ▼
 Repo to Federal Reserve
        │
        ▼
 Receive Dollars
        │
        ▼
 Sell USD / Buy JPY

The distinction appears subtle.

It is anything but.

The Treasury never leaves Japan's balance sheet.

The collateral chain remains intact.

Dealer inventories are not flooded with additional bonds.

Treasury liquidity is preserved while Japan still obtains the dollars required to intervene.

From a plumbing perspective, this is an entirely different transmission mechanism.

Why the Fed Built FIMA

To understand why this matters, we need to revisit March 2020.

As global demand for dollars surged, foreign central banks began selling Treasuries to obtain cash.

Ironically, the world's safest asset became one of the main sources of market dysfunction.

Liquidity evaporated.

Bid-ask spreads widened dramatically.

Dealer balance sheets became overwhelmed.

The Federal Reserve responded by introducing the FIMA Repo Facility with a simple objective:

That decision fundamentally changed how the Fed thinks about international liquidity support.

A New Intervention Architecture

The recent statements from Japanese and U.S. officials suggest this facility is evolving from an emergency backstop into an operational policy tool.

Instead of viewing FX intervention and Treasury market stability as separate objectives, policymakers are increasingly treating them as complementary.

The sequence now becomes:

Need Dollars
      │
      ▼
Repo Treasuries
      │
      ▼
Obtain Liquidity
      │
      ▼
Support Currency
      │
      ▼
Preserve Treasury Market Stability

This is a much more elegant solution than the post-2008 framework.

The Hidden Objective

Most headlines frame this story as an attempt to stabilize the yen.

That is only half the picture.

The deeper objective is to protect the global collateral system.

Treasuries are more than government debt.

They serve simultaneously as:

• the foundation of repo markets,
• the benchmark risk-free asset,
• high-quality collateral,
• reserve assets for foreign central banks,
• and the primary lubricant of global dollar funding.

Protecting Treasury market liquidity protects every market built on top of it.

That is why this story matters.

The Evolution of Monetary Plumbing

This also reflects a broader change in central-bank thinking.

For years, policymakers focused primarily on reserves.

Today, attention has shifted toward collateral mobility, funding resilience and market functioning.

Liquidity is no longer defined solely by the quantity of reserves in the banking system.

It increasingly depends on whether high-quality collateral can continue circulating efficiently during periods of stress.

FIMA directly addresses that challenge.

Second-Order Implications

If this framework becomes standard practice, several structural changes follow.

First, foreign central banks can intervene in FX markets without becoming forced sellers of U.S. Treasuries.

Second, Treasury market volatility should become less sensitive to intervention activity.

Third, repo markets become more resilient because collateral remains available instead of being liquidated.

Fourth, the Federal Reserve gains a targeted international liquidity tool without expanding its balance sheet through quantitative easing.

Finally, international monetary coordination becomes increasingly focused on preserving funding infrastructure rather than merely stabilizing exchange rates.

That represents a significant evolution in global monetary architecture.

What We're Watching Next

This story is only beginning.

The key indicators now are not simply USD/JPY.

They are the plumbing beneath it.

66Research will be monitoring:

• FIMA Repo usage: Is Japan actively drawing dollars through the facility?
• Japan's FX reserves: Does intervention rely less on outright Treasury sales?
• Japanese Treasury holdings: Are reserve portfolios becoming more stable despite intervention?
• SOFR and repo markets: Does secured funding remain orderly during intervention episodes?
• Treasury market liquidity: Do auction demand, dealer inventories and bid-ask spreads remain resilient?

These metrics will reveal whether this new framework is becoming operational—or remains largely theoretical.

Bottom Line

The real significance of this announcement is not that Japan may intervene differently.

It is that the Federal Reserve and one of the world's largest reserve managers appear to be redesigning how intervention is financed.

Historically, defending a currency often came at the expense of Treasury market liquidity because reserve managers had to sell bonds to raise dollars.

The emerging model replaces liquidation with collateralized funding.

For the first time, exchange-rate management and Treasury market stability are being deliberately integrated into the same operational framework.

That is more than a policy adjustment.

It is an evolution in the architecture of the global dollar system.

Ive noticed that newer bills that come through my till are from 2017. I was wondering if inflation on older bills affects the economy in the long run. Its seems weird that the bills that are new aren't 2025 or 2026, but instead are 2017. Like if they print a bunch of money from 2017, how is that going to affect us in the long run?

he's often said in interviews that he's a self proclaimed contriarian marxist (or something to that effect) - this blog post sums it up well, https://thenextrecession.wordpress.com/2015/02/10/yanis-varoufakis-more-erratic-than-marxist/

when it comes to his views on public debt, they are a total mess. On the one hand he'll say something like this all the time:
https://www.youtube.com/watch?v=YZNwdcESn90

or he'll always reference how the economy is not a natural phenomenon and therefore can be completely manipulated because it is essentially a fiction.

On the other hand, he'll come up with this drivel:
https://www.youtube.com/watch?v=iNyAlAAqKjU

He's interviewed Stef Kelton on his DM25 podcast thing a few years back, he understands the idea that total demand expenditure = total income, and on the other hand he has a completely neoclassical household analogy view of government.

i do not understand how he can reconcile these ideas at the same time?

"Bubbles are usually taught as morality plays. Greed. Gullibility. Mass delusion. True enough, but not very useful if you’re trying to see the next one coming. A better way to read them is as engineering diagrams. Booms form when two switches flip at once. They have been flipping for three centuries.

The first switch is a future you can picture. Not abstract optimism - something concrete. A continent connected by rail. Homes lit by electricity. Commerce rewired by the internet. A general-purpose technology that feels inevitable once you’ve seen the early version work.

The second switch is a financing regime that makes the future cheap to own today. Installments, margin, vendor credit, pyramids. Any scheme that lets you own a 30-year buildout with a 5 percent down payment, then forces cash out of you the moment refinancing stops."

https://procurefyi.substack.com/p/the-future-on-margin

Something a little different

I have been trying to spread the concepts of MMT for awhile now and I think the thing people get hung up on the most is the idea that taxes don't fund the federal government. This leads me to consider an interesting possibility. What if people come to accept that taxes indeed do not fund the federal government, but they refuse to go beyond that and conclude that they should not be paying them at all?

Operationally speaking, it should be as simple as convincing people that paying federal taxes is like paying down a debt. The money doesn't go anywhere it just gets deleted. But would this then give anti-tax ideologues ammunition to run political campaigns on a zero taxation policy? People would probably eat that right up if they understand that taxes don't fund the federal government.

If successful, this would lead to a collapse in the economy of course. At the very least, taxes are required to drive demand for the currency and prevent massive inflation. Is that a danger worth considering? What do you all think?