Odd Lots · Friday, July 17, 2026
Nathan Tankus and Lev Menand explore the blurring lines between monetary and fiscal policy, questioning whether the Federal Reserve's actions, particularly its regulatory functions and use of non-recourse loans, constitute a form of fiscal policy that should fall under congressional control. They argue that the Fed's unique position, shielded from appropriations, raises constitutional questions about the separation of powers and the 'power of the purse.'
“Why not make an argument that no monetary policy is fiscal policy. Fiscal policy is Congress, and therefore it's just not like these other things.”
“Deeply threatens the actual constitutional scheme to let the president have access to the money printing machine. And Alexander Hamilton was referencing this, and this goes back really to like Magna karda, the Anglo American legal tradition, the idea that the way we ensure we don't have a tyrannical executive is that the legislature controls access to supply.”
“But there's some other constraint which just has to do with the outcome. Maybe they could tell a good law story, but if the outcome causes us to lose a war with a foreign nation or causes the economy to go into recession, then that is delegitimating the decision.”