In a speech April 7th to the Hudson Institute, Council of Economic Advisors Chair Steven Miran argued that the United States has long borne an outsized cost in delivering what economists term “global public goods”—namely, international security and a stable financial system—and called for other nations to shoulder a the burden.
“Today I’d like to discuss the United States’ provision of what economists call ‘global public goods,’ for the entire world,” he began.
“First, the United States provides a security umbrella which has created the greatest era of peace mankind has ever known.
Second, the U.S. provides the dollar and Treasury securities, reserve assets which make possible the global trading and financial system which has supported the greatest era of prosperity mankind has ever known.”
“On the defense side, our men and women in uniform take heroic risks to make our nation and the world safer… And we tax hardworking Americans mightily to finance global security.”
On the financial side, he noted, “the reserve function of the dollar has caused persistent currency distortions… [which] have decimated our manufacturing sector and many working-class families and their communities.”
Foreign holdings of US Debt, Miran contends, means “Americans have been paying for peace and prosperity not just for themselves, but for non-Americans too.” Such “free-riding” will no longer be tolerated, he said.
He emphasized the link between military and financial dominance: “Because [foreign nations] can transact in U.S. dollars backed by U.S. Treasuries, they are able to trade freely… Such trade can only occur because of U.S. military might… Our military and financial dominance cannot be taken for granted.”
“While it is true that demand for dollars has kept our borrowing rates low, it has also kept currency markets distorted… making [American] products and labor uncompetitive.”
Citing Chinese and other foreign purchases of U.S. mortgage debt before the the 2008 financial crisis, Miran contended “China played a meaningful role creating the Global Financial Crisis.”
Calling for a “burden-sharing” framework, the economist proposed five mechanisms:
“Tariffs deserve some extra attention,” he continued, rebutting orthodox economic skepticism. “Most economists… are wrong. The long run is here, and the models are wrong.” He argued that persistent U.S. current account deficits—now spanning five decades—disprove the assumption that trade balances self-correct.
Citing a 2024 paper that includes the assertion “the United States gains from a trade war with China,” Miran contends tariffs can be effective even in the face of retaliation.
As evidence, he pointed to the 2018–2019 U.S.–China trade war. “China bore the cost of President Trump’s historic tariffs through a weaker currency… The tariff revenue, paid for by China, was used to finance President Trump’s tax cuts.” He asserted that new tariffs would likewise finance both “tax cuts and deficit reduction.”
“Lower taxes on Americans, financed in part by revenue provided from foreigners, will create economic growth… ushering in President Trump’s new Golden Age,” he declared. “Deficit reduction will help lower Treasury rates, and with them mortgage rates and consumer credit card rates.”
He clarified that tariffs are not purely revenue-driven. “The President’s reciprocal tariffs are designed to address… cheating like currency manipulation, dumping, and subsidies.”
The talk made no mention of the role of deficit spending driving our dependancy on foreign capital, although he did call for more investment, again paid for by foreigners.
“If we don’t rebuild our manufacturing sector, we will be strained in providing the security we need… The world can still have the American defense umbrella and trading system, but it’s got to start paying its fair share for them.”
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