Understanding Affordability

more government means less affordability

They say that Mamdani won in New York City because the college-educated kids are struggling with “affordability.” So freeze rents and free buses.

Hey, Mr. Mayor! Did you read that piece that said that many landlords in New York City are keeping apartments empty because they would lose money if they rented them? And did you read how, in Argentina, apartment rents went down when President Milei ended rent control? And did you know why that happened? It was because a bunch of landlords were keeping their apartments because they would lose money if they rented them.

And we know that the ordinary white middle and working class have been struggling with affordability for decades.

Now Republican Elise Stefanik is running for Governor of New York State on the issue of “affordability.”

And folks are mentioning that, as Nancy Pelosi announces the end of her epic career in Congress, the peak of her career was passing the Affordable Care Act in 2010. Apparently, the act did not make health care affordable. I was reading the other day about how families that don’t get subsidized health insurance are paying up to $50,000 a year in health insurance premiums. So what did the Affordable Care Act promise? Google:

Key provisions include allowing young adults to stay on a parent’s plan until age 26, prohibiting insurance companies from denying coverage for pre-existing conditions, and requiring most plans to cover a set of preventive services at no cost.

What could go wrong?

Never mind the logic and reason, the science on all this. Nobody cares about the science, unless it’s Climate Science.

So let’s reduce all the science and the logic and reason to an aphorism and admit the obvious:

More Government means Less Affordability.

Capiche?

This is not that hard. Government doesn’t make anything. Government just forcibly takes from one person to give to another; government forcibly prevents, by legislation and regulation, people from doing what they judge to be in their best interests. And the legislation and the regulation just make things more complicated and expensive.

So if government, courtesy of Barack Obama and Nancy Pelosi, writes a law making health care “affordable,” then dollars to donuts, it will make health care less affordable.

Why? Because it will regulate and administrate and bollix up the price system. Because that is what government does. Hey, Mr. Mayor! Ever read my Four Laws?

Socialism cannot work because it cannot compute prices (Mises).

The administrative state cannot work because the Man in Washington does not have the bandwidth to run the economy (Hayek).

Regulation does not work because “regulatory capture” (Stigler).

Government programs cannot work because you can never reform them (Chantrill)

Or, if we narrow our understanding of government to the simple binary enemy vs. friend in the notion of Nazi jurist Carl Schmitt, we can assume that every act of a politician will be calculated to hurt his enemies and benefit his friends, and nothing else.

Shall we try this again? I propse the following aphorism:

Less Government means More Affordability.

For instance, suppose we replaced Social Security with a mandatory savings program featuring IRA accounts at Fidelity and Vanguard for every wage-earner. Instead of paying FICA taxes to the government you pay the same amount into an IRA account. Last year, 2024, Old Age Survivor Insurance payouts were $1.366 trillion. Imagine, in a generation, reducing federal spending by $1.3 trillion a year! And, of course, the pensions that Americans would get from having saved the 7.65% of their wage that gets dunked into FICA taxes and having put it into an IRA would doubtless be a bunch higher than OASI payouts. Last year, 2024, FICA collection for OASI was $1.1 trillion. Imagine reducing federal taxes by a trillion a year! And then we’d probably have a ton of money left to will to our heirs. Hey, and I dare say that most employers would put their share of FICA taxes into your IRA.

And think about the “affordability” resulting from this reform. Think about the “abundance” it would create. Talk about a Golden Age!

And that would just be the start.

But the question is: how many months would our Democratic friends shut down the federal government to stop this program of affordability and abundance in its tracks?