Consumer Price Changes January 2000 to June 2021

Government Drives Up Consumer Costs

Government is a necessary institution, and I would argue that, when it is fulfilling its constitutionally designated role, it has the capacity for much good.

I realize some of my most libertarian friends rally around a battle cry of “Taxation is theft” as they raise their well-worn copy of The Law (a book I highly recommend, by the way), but my own understanding of our nation’s founding and perspective on ordered liberty leads me to firmly believe that government has an important role to play. Albeit, a much smaller role than it fills today, which brings me to the illuminating–and grating–chart below.Consumer Price Changes January 2000 to June 2021

Since 2000, we have seen hospital service costs increase over 200%. Interestingly, the passage of the Affordable Care Act in 2010 seems to have done nothing to reduce such costs. In fact, the expenses just keep piling up, further burdening Americans. Medical care services didn’t fare much better, increasing by 120% over the past two decades. The government’s spending in healthcare has increased 171% over the past 19 years, going from $1.4 trillion in 2000 to $3.8 trillion in 2019.

One is left wondering if the term “affordable healthcare” is really just a cruel joke of which taxpayers are the punchline.

“But Brooke,” you say. “It’s really Big Pharma that’s to blame for these rising costs.” I’ll concede that when Big Pharma is the problem to the degree that they get cozy with government and entrench themselves into the market like a plug that blocks the flow of other innovations from competitors. But the emphasis should first and foremost be on what government has done to create these conditions.

Let’s next take a look at the cost of higher education, shall we?

The skyrocketing cost of higher education, combined with the societal pressure to earn a four year college degree, have led to a generation of young Americans drowning in debt before they’ve even landed their first “real job.” In 2000, the average amount of student loan debt was $17,350. Certainly nothing to wink at, but fast forward to 2020 and students are looking at graduating with more than double that amount in the red.

Who deserves the credit for this exponential rise on college debt? Perhaps the same institution that has increased their grant and loan programs to a degree that directly correlates with a rise in tuition costs: The federal government.

Housing, although not quite as egregiously inflated as education and healthcare, has also seen increases above overall inflation. Why might that be? Although, I cede there are a number of factors that contribute to higher costs in housing, I would be remiss if I didn’t note that restrictive zoning policies limit the amount of available housing, thereby driving up housing costs across the board. Supply hasn’t always been able to keep up with demand due to onerous zoning regulations. This is one of the reasons saying, “Yes, in my backyard,” will go a long way in providing more, market-oriented housing solutions.

We could dig deeper into each of these three areas–healthcare, education, and housing–to discover just how egregiously government interference has worked to drive up costs for consumers, but for the sake of time, I’ll simply close with one final point. Notice the industries that are moving in the “More Affordable” direction? They all have something unseen in common: Limited to no government interference.

I rest my case.

Brooke Medina / Vice President of Communications

Brooke likes capitalism, Reese's, and CS Lewis.