If we were to write a check to everyone for a basic level of living, would that not lead to the inflation to the point where that standard of living would simply increase in cost.
I think of college tuition. Let’s hypothesize that everyone with a kid in college gets a $1,000 tax credit. That means a direct payment of $1,000 for parents to use for college.
What would be the college’s reaction? Would they keep their prices at $1,000? Or would they assume that students IN college would already be paying for it, so why not pick up all of the money on the table.
The liberals would argue that MORE kids would be able to afford college, so the colleges would not increase their rates.
The bean counters at the college would look at this as free money to scoop off the table—and they would know it would be temporary—so they would increase their fees by that same $1,000.
The poor kids would still be $1,000 short. The students have to kick up the extra $1,000—and still fund the tuition.
It might take a semester or two, but the excess money would be absorbed into the system. And nothing is gained.
Pumping money into an elastic system is just stupid. The system will expand to consume the extra money.
Good post.
The primary reason that college is “expensive” is that the fed gov provides massive amounts of below market rate borrowing for students to purchase “college”.
The primary reason that medical care is “expensive” is that tax policy connected health “insurance” (actually prepaid medical care) to employment and isolated the cost from the user.