Government-mandated price controls have never worked, and in many cases, have ended in disaster in countries such as the Soviet Union, Venezuela, and even the United States during the “Nixon Shock” when they were tried in 1971.
But this didn’t stop Vice President Kamala Harris from leading with artificial price controls when she unveiled her economic platform in her bid for the Oval Office. She also promised to give home buyers $25,000 in taxpayer money for down payments, set the price of drugs, and excuse billions in student loans. The grand promises of her Socialist plan also include a government takeover of healthcare and providing it to everyone in the country, citizen or otherwise.
The vice president’s financial platform was universally panned by economists and commentators from both sides of the political aisle since it flies in the face of the American capitalist system, the most successful the world has ever seen. Promoting competition in a marketplace run by entrepreneurs creates innovation, efficiency, better products, and lower prices. Turning it over to the government, history has proven time and again, leads to poor quality, scarcity, and higher prices.
In the food industry, which Harris has targeted to win votes, competition has brought in low-price retailers such as Lidl and Aldi. They figured out how to turn a profit in a business with very low profit margins. Change the dynamic through government price fixing, and food companies will fold. The lack of competition will hurt consumers, particularly those in the low-income areas Democrats such as Harris purport to care so much about.
Every time a government tried to fix food prices, particularly in Communist countries, shortages erupted, and bread lines formed. Producers went underground, and black markets flourished. Those who could afford food were able to find it; those who couldn’t were at the mercy of the government that caused the problem in the first place.
Giving buyers $25,000 of other people’s money will drive up the asking price of homes, experts say, probably by that exact amount. Sellers will expect more, and the market will be artificially manipulated. Having more buyers will increase demand, and this demand will drive up prices. This is the exact reason why the cost of almost everything in America is so high. The Biden-Harris administration flooded the market with trillions of dollars in cash, leading to the basic economic condition of having “too much money chasing too few goods”—the textbook cause of inflation.
Anyone who worked hard to pay off their college loans, and those who chose a different career path, are not too happy about being forced by Biden and Harris to pay off the education debt of others. The same market conditions apply: more government money flowing into the college system will raise the cost of the service, not to mention dilute the value of a degree. At present, the Supreme Court is blocking Biden from waiving student debt, as Harris keeps promising to do so if elected.
Turning the U.S. healthcare system over to the government is also seen as a disaster in the making. Those in countries that promise health care for all see long waiting lists, shortages of doctors, and rationing of services. In socialized medicine, bureaucrats decide what procedures and treatments you receive, and it's no wonder why those who can afford them come to the United States. The rest stay home and face the consequences of government control.
Fixing the price of prescription medication will also expose the industry to the pitfalls of government interference. The incentive to innovate, develop new drugs, and compete will be gone. The end result will be fewer choices and higher prices.
Workers who sacrificed wages for private health insurance will be thrown into a pool with everyone else. These include millions of migrants who have not paid into the system in a scheme that Harris’ opponent, Donald Trump, argues will bankrupt Medicare and Medicaid. The Democrats opened the Southern Border to millions of people so they could harvest their votes. Free healthcare is just one of the promises Harris will try to keep to make sure her party stays in power.
When President Nixon set the price of gas in the early 1970s, he depressed the profit margin and competition between the companies providing the fuel. Supply couldn’t keep up with demand and lines formed at the pumps. When he was forced to lift the controls, prices soared before the market could reestablish equilibrium.
The next question on the minds of economists is where do the Harris price controls end? Is she going to dictate the price of beer? An airline ticket, the cost of a hotel room? Is she going to reduce auto and home insurance rates? Haircuts? Maid service? At the end of the day, it was the Biden-Harris policies that caused everything to go up—flooding markets with trillions of federal dollars, waging war on domestic energy, setting onerous regulations and fees, and inviting in millions of low-wage workers and giving them benefits not even citizens are receiving. Are we to now believe that elevating Harris to president is going to change anything?
Hearing Harris’ ideas, one wonders why she hasn’t done any of this during her years as vice president or in the U.S. Senate, for that matter. The Democrats keep promising “hope and change,” but after years of being in charge, their promises have remained unfulfilled.