I find it somewhat amusing that the Dems are talking about making life affordable and lowering prices. It would be more amusing if so many voters didn’t apparently believe them. For any particular item the only way prices go down or even stabilize is if supply is increased or demand is reduced or you have some innovation that dramatically reduces the cost of producing the item. Here is a list of the items that every person cares most about–housing, food, clothing, energy, health care, transportation. I doubt any politician wants to suggest to voters that if they just make do with less of any of those items, the prices will go down. What is the point if you aren’t buying anyway?
Increasing supply sounds great. Let’s take housing. Why isn’t there more housing available? There is in some parts of the country, like Texas and Florida and Tennessee. The regulatory environment there makes it easy to build new housing and minimizes the cost of permits. In other states, regulations make it very difficult and very expensive to build new housing. Guess who runs those states? And in the states that make it easy to add housing, the number of people wanting to live in these better-run states is very large and puts demand pressure on the prices of even an increased housing supply.
Medical care? Going to tell people to just use less and the price will go down? Or somehow magically increase supply, when regulations make that difficult? The problem in health care is that it isn’t a real free market, the users often aren’t the payers. The providers are highly concentrated, with little competition. I can go on and on with every item and what you will see is that inevitably it is government actions that hinder the operation of a free market that would allow greater supply, more innovation and eventually more stable or lower prices. Look at communication technology–little government interference and tons of innovation, more functionality at a lower price.
Now let’s look at the macro picture. People need money to buy anything. The aggregate amount of money in an economy is the money supply. I am still trying to grasp exactly how this metric is calculated, what pieces go in and why and whether other pieces should be in. But in general, more money chasing the same amount of goods and services means prices will go up. Biden flooded the economy with additional money and we saw the result. One reason we have ongoing inflation is because our deficits require the issuance of debt and much of that debt is short term Treasury bills which have the effect of adding to the money supply.
This is all simplistic, but the general point is accurate. We have inflation and we don’t have lower prices because of government interference in the operation of free markets or failure to remove impediments to the free market, for example, allowing excessive consolidation among health care providers. And as long as we keep having to finance deficits by issuing more debt, we are going to increase the money supply and provide a spur to inflation. While both parties are responsible, the greatest blame falls on the Dems. And no one can seriously think that that party is going to cut regulation or reduce spending. If they raise taxes, it won’t be to reduce the deficit, it will be to have more spending and larger deficits.
And here is the most important thing; the message that Reps just completely fail to get across. The single biggest cost for everyone is the cost of government and that is the fastest rising cost over time. It falls on every person directly and indirectly. The sellers of the goods and services pay taxes and fees that are rising rapidly and that goes into their prices. And government policies, for example, mandating expensive renewable electricity generation, raise the costs of many items. We all pay an incredible amount of our income for government. And what do we get? Fraud and waste. Declining public schools, decaying infrastructure, more crime.
So while I find Dem claims about make things more affordable mildly amusing, I also find them to provoke great sadness. Because the electorate falls for their garbage and will only find that Dem policies will worsen inflation and every other aspect of their lives. Shame on conservatives for not figuring out how to effectively explain this basic message to voters.
