When Does Helping Actually Hurt

cropped-bob-shapiro.jpg   By Bob Shapiro

The US Cost of Living has gone up relentlessly since Eisenhower was President – sometimes faster and sometimes slower. Every Administration, whether Republican or Democrat, has seen a higher CPI reading than his predecessor.

Some categories have gone up faster than others, year after year. Much of the reason for these categories not only rising year after year, but rising more quickly than other categories, is that this is where government money has flowed.

Let’s look at a few examples. The cost of a college tuition and the cost

of college books each went up about 80% from 2003 to 2013. This is triple the overall CPI increase during that time. The money which allowed college costs to zoom so quickly came mainly from college loans. Government student loans went up about ten times, and now stand at around $850 Billion – the largest government “asset” on the US balance sheet, and doesn’t include private student loans.

Student Loans

It may be nice to subsidize college for all, but the real winners are the colleges. The students now have twin problems to face as roughly half of recent graduates can’t find a job, while the loans – frequently over $20,000 of debt per student – still have to be repaid.

Medical care has zoomed ahead more quickly than the CPI as well, with an annual rise over 4% a year since 2003. Beneficiaries here are the drug companies and the insurance companies. Some people have tried to save money by getting slimmed down medical insurance coverage, and by buying prescription medications from pharmacies in Canada – both practices which our government have made illegal.

Costs By Category

As the Food Stamp program, and farm price supports have grown, the consumer cost for food and beverages has gained at over a 3% average rate. One remedy our government has put into place is that they no longer count food price increases in the Core-CPI. I guess if it no is seen, it no longer matters.

Housing is an interesting category. It rose about 23% during the last 10 years, a little less than the CPI as a whole. But that is only because of the housing bust of the last several years, which has cut many home prices in half. Over the last 40 years, home prices had gone up about five times, up to the high in 2008. Fannie and Freddie worked wonders on house prices until they had to be bailed out at taxpayer expense.

Home Prices

In each of these categories, federal taxpayer money has been less than successfully used. It’s time we gave the taxpayers a break by ending every one of these programs. Ending federal student loans and guarantees won’t end student loans, and it shouldn’t.

But using taxpayer money to push up college prices, leaving half of recent graduates without sufficient skills to be employable (and heavily in debt) is a waste of money. End the programs and let tuitions and book prices fall as a result. We don’t need welfare for the book companies or for the big colleges.

I’ve talked previously (Feeding the Poor Better) about making food prices much more affordable by ending federal money and other influence. However well intentioned the programs may have been, they cause more problems than they cure. End all the programs and taxes causing food to be so expensive.

ObamaCare is widely despised, and Medicare and Medicaid are too expensive to be sustainable. Let’s kill ObamaCare now and phase out the other programs before they collapse, leaving those who depend on them destitute.

The artificial housing boom has caused widespread misery in the US. People who couldn’t afford a house lost what little life savings they had as their mortgages went upside down. It might be a worthy goal to let everyone buy a home, but it does our country no good – and much harm – to lend to people who can’t afford to pay it back.

Food, housing, medical care, and education are too important for our country to trust it to government to do it right. It’s not that the individual government workers don’t want to do a good job. It’s that political decisions are less efficient and effective that Free Market solutions.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s