Sunday, January 11, 2009

Simple examples

Question: Name two things that consistently year after year increase in cost more then the rate of inflation?

Answer: College Tuition and Medical Care.

Question: Name two things that the government has decided everybody has to afford?

Answer: College Education and Medical Care.

Government interference in these two markets has driven the cost up. As more people can afford it regardless of the cost, cost becomes less and less of an issue.
Providers have no reason to control prices and consumers get it no matter the cost with the governments help. The laws of supply and demand are skewed.

What happens next is the items becomes so expensive government can’t afford it anymore. They then will institute price controls.

What do you think price controls will do to the quality of the product provided?

No comments: