The Constitution at Work

The text outlines a historical evolution of federal government size and power in the United States, emphasizing shifts from a small government model towards a more expansive administrative state. Initially, the federal government was intentionally designed to be small, as evidenced by its limited spending relative to GDP until the early 20th century. However, significant expansions occurred during the New Deal era under FDR, which introduced permanent entitlements and regulatory agencies, establishing a larger peacetime government framework.

The narrative highlights key legal and institutional changes, such as the 1974 law limiting presidential impoundment power and the 1980s Chevron decision, which allowed bureaucratic discretion in law enforcement. These developments contributed to the growth of a centralized government with limited voter control. Recent legal and political shifts, such as the Supreme Court's Loper Bright decision and actions by the Trump Administration, suggest a potential retraction of government size and power, as they challenge the established order by reasserting presidential authority over spending and the executive branch.

This evolving landscape presents both opportunities and risks for investors, as the potential for significant governmental restructuring could impact economic and regulatory environments. The text suggests that we may be witnessing a pivotal moment in U.S. governance, comparable in significance to the New Deal, with uncertain outcomes that investors should monitor closely. The implications of these changes could reverberate through financial markets, affecting investment strategies and decisions.