What Nik is surfacing here cuts to the heart of the recurring tension between political authority and monetary authority in the United States. The episode itself, while clouded in partial information, appears to have prompted an unusual show of solidarity among global central bankers in defense of Jerome Powell. That gesture is revealing in itself because it signals how tightly the idea of central bank independence has become intertwined with elite institutional self preservation.

The deeper point is that independence in monetary policy was never meant to be a shield against public accountability. It was designed to insulate policy decisions from short term political pressures, but history reminds us that the balance between Congress, the Treasury, and the central bank has been periodically renegotiated. Attempts to frame any challenge to the Federal Reserve as a heretical act against economic orthodoxy ignore that context and risk freezing governance into an intellectually brittle form.

Nik’s observations on fiscal deterioration are equally important. The long term trajectory of US debt service costs in an era of normalized higher rates creates structural deficits that cannot be patched over with conventional austerity or growth projections. The mechanics of Fed monetization and any potential jubilee would indeed transform the landscape of finance and investor expectations. The fact that this extreme scenario is entering the discussion underscores the severity of the fiscal imbalance.

The historical note about a pre Fed arrangement where the Treasury simply banked with commercial institutions is not trivial. It reminds us that the current architecture is not inevitable and that monetary governance is a design choice. However returning to such a structure now would involve a complicated unwinding of market operations and sovereign debt management practices that have developed over more than a century.

Where Nik sees mild directional improvement in fiscal charts the reality is that marginal gains in a deeply negative baseline do not yet represent a path to sustainability. If anything they highlight how narrow the runway has become for meaningful corrective action. The conversation therefore should shift toward functional frameworks for coordination between fiscal and monetary arms that can work in periods of extraordinary strain without defaulting to doctrinaire positions about independence or consolidation of power.