The Mississippi Legislature has recently gaveled back into session, and unfortunately, not all bills are in the best interest of the state. One such bill, House Bill 206 introduced by Representative Robert Johnson, proposes raising the minimum wage to the arbitrary amount of $10.00 an hour. Such a proposal could threaten thousands of jobs and ultimately lead to economic hardship for many.

In order to understand the effect of minimum wage laws on actual wages and employment, it is important to consider the effects that such laws have had in states that raised the mandatory minimum wage. Fundamentally, when the heavy hand of government attempts to arbitrarily determine what employers must pay their employees, the effects can be devastating for employers and their employees.

Mississippi does not currently have a state-mandated minimum wage. Instead, employers in the state are subject to the federal minimum wage of $7.25 an hour. The federal minimum wage has a disproportionately high effect in Mississippi versus other states. This is because the dollar has more purchasing power in Mississippi than in any other state. Furthermore, it is harder for Mississippi businesses to generate a dollar of capital than other states. For instance, the federal hourly wage of $7.25 in Mississippi has the same purchasing power as $8.12 in Utah, where the federal minimum is the standard as well. Despite this, Mississippi is required to follow the same federal minimum wage as Utah.  

While the federal minimum wage already has a disproportionate effect on Mississippi, House Bill 206 proposes raising the state minimum wage to $10.00 an hour, $2.75 above the federal standard. Because individual dollars have a high purchasing power in Mississippi and are harder for businesses to earn, such legislation could have an even-higher burden on workers and businesses than what has been seen in other states that have raised the minimum wage.

Consider the state of California. California has raised its minimum wage steadily over the last several years, which has ultimately led to a steady decrease in employment growth for certain industries. For instance, a Harvard Business School study found that a $1 increase in the minimum wage requirement led to a 14 percent increase in the likelihood of the closure of 3-star restaurants in the San Francisco area. Needless to say, when businesses close, it leaves many of the employees without employment at all.

California stands as a cautionary tale, and its minimum wage currently stands at $14 an hour for small businesses with less than 25 employees. The current proposal to raise the minimum wage to $10 in Mississippi might seem to be distant from the $14 wage in California. However, a $10 minimum wage in Mississippi could have the same negative effects as a $14 minimum wage in California. Because the dollar's purchasing power is higher in Mississippi, $10 in Mississippi is the equivalent of $13.30 in California -which is not too far from the damaging $14 minimum wage that has plagued California. Mississippi needs economic expansion, and the state should not handcuff businesses from providing employment. Rather than using the power of government to force businesses to follow arbitrary increases on the minimum wage, the state should reduce heavy-handed taxes and regulations that burden businesses and workers. The free market provides the tools for workers and businesses to grow. Mississippi should let its people work. A key way to do that is to avoid arbitrary minimum wage increases.

Recently, the Cato Institute released their yearly index for personal liberty and economic freedom in the fifty states. Sadly, Mississippi ranked at an underwhelming #40.

“Mississippi is a typical Deep South state in that its economic freedom far outstrips its personal freedom. But the state’s worst dimension is actually fiscal policy,” wrote Cato. The think tank continued, saying Mississippi’s overall tax burden is a bit above average at 10%. Debt is much lower than average, too, but government employment and GDP share are far higher than average – State and local employment is 16.2% of private-sector employment.

Personal liberty in the Magnolia state is described as sub-par, with it imprisoning its population at a rate of 1.5 standard deviations above average and allowing hardly any school freedom. On the economic freedom side, Mississippi’s monopolization of alcohol sales, the lack of statewide cable franchising, strict regulation of health insurance, and certificate of need (CON) laws don’t make things any better.

With it being the end of the year, folks normally begin to create their new year’s resolutions to better themselves, whether that be by learning a new skill or hobby, exercising more, or spending less and saving more. Mississippi should look at its horrendous ranking and aim to better itself in 2022.

The Mississippi Center for Public Policy is looking forward to the new year as we take on many of the challenges laid out in the Cato report, including expanding school freedom through open enrollment and creating multiple charter school authorizing boards, repealing the awful CON laws that plague our healthcare industry, and abolishing the income tax. We believe that doing these things will, of course, make Mississippi freer. It will also, though, ultimately make Mississippi more prosperous and a happier place to live, work, and raise a family.

We talk more about this in our 2022 Freedom Agenda, which you may read HERE.

In just a few days, a new legislative session will begin. Our state representatives and senators will be considering a range of bills that could have a major impact on our lives.

While some entrenched interests fight to protect their own industries and pocketbooks, our aim is quite the opposite. We seek to defend and expand freedom and ensure that the rights and liberties of each Mississippian are defended under the dome of our capitol building.

Recognizing this, we are launching a coordinated strategic press to advance a range of policies that we believe will empower free markets and free people in our state.

Here’s a look into what we’ll be fighting for this session:

Bills to Combat Critical Race Theory:

1. Combat Critical Race Theory

Having published a paper highlighting how Critical Race Theory is being advanced in our state, we are supporting legislative efforts to ensure that no public money be spent to promote this divisive ideology.

2. Promote Academic Transparency

A key way to combat the presence of toxic ideologies in the classroom is to require schools to publish details of what is actually being taught to our young Mississippians. We support legislative efforts to do exactly that.

Bills to Extend Economic Liberty:

3. State Income Tax Abolition

A number of Southern states like Texas, Florida, and Tennessee have already eliminated or are working to eliminate the state income tax. This policy proposal may be the best way to bolster the Mississippi economy and make us more competitive in the region.

4. Red Tape Reduction

Mississippi is burdened by far too many boards, commissions, and states agencies that are constantly pushing new regulations onto the people. Big businesses can navigate this minefield of market obstacles, but small businesses and entrepreneurs are often stifled. We want to mandate a significant scaling back of the existing regulatory landscape.

Bills to Improve Education:

5. Open Enrollment in Education

To improve public schools in Mississippi, we need to give moms and dads more control. We seek to allow parents who are dissatisfied with their current school systems, the ability to send their child, and their tax dollars, to a different school of their choice.

6. Cap School Board Administrative Costs

Too much of our education budget is spent on administrative costs and bureaucratic salaries. We support efforts to ensure that more money goes into the classroom instead.

7. Establish Multiple Charter School Authorizers

Charter schools are meant to offer families a better future for their kids. But a decade since they were allowed to be authorized in Mississippi, there are still far too few of them. We want to streamline the authorization process and encourage the expansion of education freedom.

8. Free Speech on Campus

We need to protect freedom of speech for college students on our state campuses. We want to ensure that peaceful assembly, protests, lectures, petitions, and literature distribution will be allowed.

Bills to Improve Healthcare Provision:

9. Repeal Certificate of Need

Mississippi has some of the worst health outcomes in America. One reason for this is that we have some of the most severe restrictions on the expansion and creation of healthcare facilities. Certificate of Need (CON) laws mean that no new health care provider can come along and offer services without the express permission of competitors. This makes as much sense as allowing a Pizza Hut to block the building of a Papa John’s because of the potential for competition. We aim to get rid of this incredibly outdated policy.

10. Repeal of Moratorium on Home Health Agencies

With more folks than ever seeking to get medical care from the comfort of their own homes, we support legislation that would make it easier to offer medical access directly. Our system currently makes this almost impossible.

Bills to Encourage Technology & Innovation:

11. Agricultural Incubator

A major portion of Mississippi’s economy is comprised of agriculture. We would like to empower innovators and small businesses to bring new technology to market with reduced regulatory burdens that could allow for Mississippi to become the nation’s leader in the field.

12. Reduce Barriers to Telemedicine/Telepharmacy

In an age of unprecedented integration between digital technology and daily life, we believe that Mississippians should be allowed to access their healthcare systems and doctors using modern devices.

Thanks to inflation and other factors, gas prices have been on the rise over the last several months.   In Mississippi and other Gulf Coast states, the gas prices have been traditionally lower than in other parts of the country. Nevertheless, the price rose in November up to about $3.05 per gallon. This puts gas prices on track to be the highest holiday prices in nearly ten years.

Gas prices play a significant factor for people seeking to travel during the holidays. It also places a burden on farmers and those dependent on machinery for a living during the regular seasons. Gas prices play a significant part in the United States economy, which is why government policymakers have to make it a top priority when considering the issues they face with inflation.

When considering this issue, one may wonder how the price of gas fluctuates so much over time. Only a couple of years ago, during the Trump administration, the gas prices had dropped to under $3, sometimes under $2. Now, it has skyrocketed to a record-high in some parts of the country. How can there be such a difference?

According to the U.S. Energy Information Administration, gas prices fluctuate based on four different factors: the cost of crude oil, refining costs and profits, federal and state taxes, and distribution/marketing costs. The “weight” of those factors also changes over time. Compared to the average price in the last ten years, federal and state taxes, for example, make up a much higher role in gas prices in 2021. In fact, the percentage of the gas price comprised of federal and state taxes rose from 16 percent to 22 percent.

Robert Rapier of Forbes seems to suggest that the biggest factors contributing to the price of gas are outside of the government’s control, such as the international price for crude oil, limitations on refining, and the seasonal element of supply and demand. While these certainly can be contributing factors, the analysis avoids the ultimate issue that government administrations have a significant ability to change the prices of gas, based upon their policies.

Elizabeth Warren recently blamed the issue of gas price inflation on corporate greed. The reality is that a system of highly complicated factors influences the price of gas. No one company is going to be able to raise the prices singlehandedly. Rather, free-market principles of supply and demand promote the true prices that gas is worth. The problem is when other factors step into the picture and negatively influence the natural price of gas. Such factors can include international markets, supply chain issues from bad government pandemic restrictions, and government policies heavily regulating the energy sector, as Brad Polumbo with the Foundation for Economic Education has noted.

The rapid increase in gas prices can ultimately be attributed to a rapid transition in government policy. Biden represents this transition from the Trump administration, saying that America does not need to boost its domestic production of oil and gas. Unfortunately, the outcome of this kind of transition can only mean an increase in prices. Thus, while some attempt to explain away the rapid rise of gas by blaming external factors that are outside of the government’s control, such discussions are merely a smokescreen to cover the root causes.

What then should be done in Mississippi? Mississippi has an opportunity to lead the charge in this area. State taxes and regulations play an additional factor in the price of gas that only compounds the problem into a much greater issue. Counteracting the federal government’s role in the price of gas would greatly help manage the inflation that is so rampant throughout the United States -even during the holidays.

In recent years, the amount of technology in the economy has advanced at an unprecedented rate. With this growth, innovative automation has also increased through the use of technologies such as robots and artificial intelligence. In the wake of such technological growth, many have sounded the alarm that there is a threat to employment growth, but are such claims well-founded?

Centered around the debate about technology and job losses is the question of whether or not technology causes permanent job losses that cannot be recovered. It goes without saying that when old technologies are overtaken the specific jobs for that technology decrease in demand. For example, cars caused horse carriage drivers to not be in demand as much as they used to be. The real question is whether or not those new technologies replace old jobs without creating new jobs.

A misunderstanding of the benefits of new technology as a way to actually expand jobs and wage growth can have real effects. This false perspective has gone so far that some have even proposed that the government levy extra taxes on automation technology, such as robots. Proponents of this “robot tax” argue that if a robot produces income that an individual might have produced, then the government should tax the robot’s “income” to make up for the lost tax revenue. 

Rather than viewing technology through the lens of big government, one of the most effective ways to understand the positive effect of future technologies is to look back on the technologies of the past. Around 1810, in the wake of the Industrial Revolution, some workers openly opposed the integration of machinery into trades that had been traditionally done by manual labor. The protesters became known as Luddites, with many of them resorting to the open destruction of machinery.

But time would show that the Luddites had been misplaced. In the decades that followed, the standard of living began to improve as the ability to produce goods and services became more affordable. This meant that while basic implements such as clothing and utensils were often expensive for the average family to afford in prior days, machinery enabled the mass production that made these things within the average family's reach. In addition, to basic living standards increasing, new technology brought about an overall increase in the amount of available goods and services.  

These lessons from history stand true today. The average worker has a far a higher standard of living than former days and and can use technology to generate more value than the average worker of prior days. For instance, the industrialization of farming has drastically increased the amount of profits that the average farmer can produce per acre. A manufacturing worker can oversee millions of dollars in daily production from a computer dashboard. Data system administrators can oversee millions of financial transactions in a day.

All of these factors mean that individual workers are able to bring more value to companies by harnessing the power of new technology. When the average worker is able to bring higher value and profits for companies, there is a cascading effect that ultimately allows companies to expand and have more openings for employment.

Free market innovation is a catalyst for true growth, and technological advancement is a key way to make that happen. Therefore, rather than imposing excessive regulations and even considering counterproductive policies such as a “robot tax,” government should realize and support the employment potential that comes with technological growth.  

1970’s Santa Clause is Comin to Town is one of Rankin/Bass’ most popular stop-motion animated programs. The holiday classic, based on the song of the same name, tells the story of how Santa Clause came to be. To lovers of liberty, it also serves as an allegory for free markets and how prohibition and tyrannical laws only lead to worse outcomes.

Santa Clause is Comin’ to Town casts its title character as an idealist, an individualist who detests nonsensical regulatory laws and fights against them, all whilst spreading Christmas cheer. The tyranny begins when Sombertown’s governor, the Burgermeister Meisterburger seeks to ban all toys after he trips over one and breaks his leg.

Does this not seem familiar to when we hear left-wing activists nowadays seeking to ban anything they deem “dangerous?” – guns, toy guns (ironically), fast food advertisements, fossil fuel-powered cars, pets, “violent” video games (more toys), and free speech, among other seemingly harmless things. The thing is, we continue to attempt to ban things when we know that doesn’t work. By nature, people will do what authority tells them not to. Outlawing something that we do not understand, fear, or do not like does not work and is simply unjust. To decide what’s good and not good for an individual without their consent is an infringement on self-governance completely. The most prevalent example of this is the prohibition of alcohol, which we know only made matters worse – crime, addiction, corruption, etc.

Santa sees the injustice happening in Sombertown and dares to defy the governor’s orders. When he finally makes the perilous journey into the village, he opens his sack of toys, and happy children commence to playing with them.

Infuriated, Meisterburger orders the arrest of the children, but Santa intervenes and offers him a yo-yo. It immediately improves the governor’s sour disposition, until one of his officers reminds him that he's breaking his own law. Thankfully though, the distraction allows Santa to escape arrest.

Santa later launches a guerrilla campaign to smuggle toys into Sombertown. He adopts the conventions that we now associate with the Legend of St. Nick — arriving under cover, entering homes through unconventional means, planting toys in wet socks hung by the fire — to meet the demand for toys while avoiding law enforcement.

The governor’s men then adopt more aggressive tactics like unreasonable searches and seizures, as well as subjecting violators to excessive punishments, though we’re told the tyrant(s) eventually died off and were replaced by better men. “By and by,” the narrator says, “the good people realized how silly their laws were,” and Santa's story goes worldwide. He no longer is considered an outlaw, but a saint. He grows older, but continues an annual ride across the planet, delivering gifts to all the well-behaved boys and girls.

It's an unconventional happy ending, and a silly allegory, but one that resonates with those who favor limited government. Unjust laws are finally repealed with the help of a brave individualist and freedom reigns. If there is some lesson to be learned, it’s that the prohibition of anything could result in many worse outcomes – crime, corruption, and increased government control over average citizens’ lives. If the adults don’t get anything out of this animated classic, hopefully, the kids will.

Agriculture is a growing industry. In a day when the nation has now has the ability to produce more agricultural products than prior generations, it has become apparent that agriculture is an industry where innovative business models and technologies have extraordinary potential. Despite this success, there has been a growth in regulations that inhibit this innovation.

According to the United States Department of Agriculture (USDA), the nation’s agricultural per-capita production has increased by almost 300 percent since 1948. While there was relatively little change in the inputs, the growth compounded. What is the cause of this? Studies by the USDA found that much of this growth was driven by the adoption of innovative business models and new technologies.

• Excessive regulation statistically affects agricultural innovation

While innovations in technology and business carry a directly positive effect for agricultural growth, there is an opposite effect when regulations increase.  Ultimately, there are two main jurisdictions for agricultural regulation, the state government and the federal government.

A Purdue University analysis of the agricultural regulations imposed on the federal level from 1997 to 2012 by the Environmental Protection Agency (EPA) and the USDA found that the regulations had a substantial impact on innovative growth in productivity.  Because of USDA regulations, the study found a 24.7 percent decrease in productivity growth, for EPA regulations, the study found a 36.8 percent decrease in productivity growth.

Despite such dismal effects of regulation on growth, federal agricultural regulation has only increased since the Purdue study’s 2012 end year. A 2018 study conducted by the George Washington University Regulatory Studies Center, and again, the USDA itself, had similar findings. Stating that “growth in total regulatory restrictions has a negative relationship with growth in crop yield.” This federal environment has led to calls from groups such as the American Farm Bureau Federation for a decrease in these excessive regulations, citing a fundamental issue with the extent and enforcement of federal agricultural regulations.

While state-level regulations have varied across the nation, these state-level regulations can inhibit agricultural innovation and growth as well. The extent and enforcement of agricultural regulation is different in every state, but examples of regulatory burdens on agriculture abound. This is true both for innovative agricultural technology and innovative agricultural business models.

On the innovative technology side, California law requires all self-driving tractors to have an operator stationed in the vehicle, practically defeating the purpose of “driverless” tractors. In Mississippi, drone operators seeking to spray pesticide or fertilizer would have to get an airplane pilot’s license. This is due to an outdated requirement that all aerial applicators have a pilot’s license. Both of these rules are based on outdated laws from the 1970s, and these regulations are only two such examples of burdens that states have placed on agricultural technology.

In addition to regulations on ag-tech, many states also have regulatory burdens on innovative agri-business models as well. For several years, multiple states did not permit farmers to sell shares of their dairy herds to outside participants. In addition, several states have prohibited certain farm-to-consumer food sales from being marketed on social media, forcing many farmers to be excluded from a basic tool that other sectors are permitted to use widely.

• Key reforms could help remove barriers to growth

Even a brief survey of the agricultural landscape demonstrates a need for meaningful regulatory reforms. Farmers across the state and country have recently battled economic downturns, natural disasters, a global pandemic, and numerous other challenges. The least that the government can do is remove regulations that inhibit their productivity and innovation.  While there is a myriad of agricultural regulations that should be fundamentally repealed on the state and federal level, there are also proactive reforms that could help maintain an environment that encourages growth.

With the backing of farmers and groups such as the American Legislative Exchange Council (ALEC), many states have enacted sweeping agricultural freedom laws that have expanded access to agricultural products by consumers. Given that a large percentage of the agricultural sector centers around food production, several states looking to cut regulations have enacted “Food Freedom” laws. Many of these laws encompass reforms such as expanding farm-to-table meat sales, broadening cottage food sales, and lowering small farmers' licensing and permit requirements.

In addition to specific changes to the most commonly burdensome regulations, there is also immense potential in a regulatory exemption program. In such a program, individual farmers could request specific exemptions from excessive agricultural regulations that do not affect health or safety. In some cases, a broad regulatory repeal like the food freedom laws may not apply to a farmer in a unique regulatory situation. 

Using such exemption programs, individual states, and even the federal government, could have platforms for farmers to continue operating and growing in the economy without being hamstrung by a one-size-fits-all approach. This “regulatory sandbox” model has a successful track record of success in other sectors, such as financial technology, and it could be a platform for farmers in unique scenarios to get the regulatory relief they need.

• It’s time to let farmers work without limits

The outdated rules of yesterday, and arbitrary regulations of today, shouldn’t be permitted to restrict the growth of agricultural innovation and prosperity for the future. A proactive agricultural sector can only grow to its fullest potential in a free market context.

Farmers have enough challenges to face as they strive to produce products for their families, neighbors, and country. Instead of placing more burdens on these hardworking folks, sound public policy should ensure that farmers can continue to grow and innovate without having the blight of a heavy-handed government.

The Christmas season represents a major source of cultural optimism that encourages people to spend more freely, sparking quick and, at times, unsustainable economic vitality. While this usually provides a boom, economic circumstances aggravated by government actions could mean a leaner holiday for thousands of Americans.   

Due to current economic hardships like inflation, the consumer price index reported that the price for goods and services have increased 6.2 percent over the last year (that number increased by 0.9 in the last month alone). Things are getting more expensive and under normal circumstances, people would be much less likely to consume more expensive items beyond what they need to buy out of necessity. Additionally, supply chain problems have led to a shortage of items one can buy. Meanwhile, the federal government of 2021 had a consistent pattern of policies that discouraged labor participation and increased monetary inflation.

However, despite economic challenges, consumer spending still occurs. This should not be surprising as the Christmas season generally represents a period in which people are not as concerned about the price tag. The data shows that even though holiday spending is less than previous years, people are still spending more than they typically do in other parts of the year.

This should be encouraged. Regardless of what economic theory you hold, consumer demand and spending are an essential part of boosting the economy. Even in the supply-side framework, cutting taxes for businesses to create jobs only works if those businesses have a demand for their product. The biggest problem that stands in the way is if companies can keep up with the demand when they themselves are running into a supply shortage. The ultimate solution to this is having the government come alongside businesses and help them make it easier to make goods by cutting red tape.

Mississippi is far from avoiding this problem during the Christmas season. Gas, food, and other consumer products are rising making it more difficult to travel and celebrate. Cultural optimism certainly helps with the state’s ability to maintain the economy. However, the true and sustainable solution to promote a healthy economy is by continuing to promote the free exchange of goods and services. Mississippi has already taken a step in testing this by creating a tax free holiday in the month of July. However, it can take further steps in promoting free market principles this holiday season by simply allowing companies to operate freely and becoming a help, rather than a hinderance, to them.

Ultimately, both businesses and consumers should be free to pursue what is most prudent for their interests. One of the greatest myths people believe regarding the economy is that simply because the nation is entering into economic hardships does not mean that government intervention is warranted.

This Christmas season may exhibit a time in which people will sacrifice, spend, and travel less, but that conclusion must be made by the consumers themselves, rather than government policymakers. As we enter the Christmas season, the choices of the people, rather than the government’s central planners and regulators, should be at the forefront.

It is a basic economic principle that when taxpayer dollars are injected into a sector of the economy, there is an imbalance in the free-market forces of competition and supply that help keep prices low and quality high. This shows true as the growing government has contributed to the problem of increased costs for health and higher-education.

In order to understand the context of rising education and healthcare costs, it is important first to consider the extent of these rising costs. Rather than being isolated incidences, higher education and healthcare have seen a consistent pattern of cost increase.

The American Enterprise Institute looked at the history of costs for multiple sectors using the Consumer Price Index from 2000 to 2020. The analysis attempted to consider the top cost increases in light of inflation and other factors. The report found that while overall inflation led to a 60 percent increase in costs, college tuition and fees increased by over 170 percent. Meanwhile, hospital costs increased by over 200 percent.

The increases in higher education costs tie directly into the amount of government funding that has flowed into the higher education system. According to U.S. News and World Report, the average in-state tuition at national universities was $5,775 in 2002 (adjusted for inflation to 2021 dollars). In 2021, the average in-state tuition was estimated at $11,631. So, in simple terms, college tuition has more than doubled.

Such increases are not isolated to the last 20 years either. Over 30 years ago, in 1987, some were already sounding the alarm that expanded government involvement in higher education brought about in the 1970s was causing tuition increases. Many universities jumped at the chance for more government dollars through grants and “subsidized” loans. Such circumstances eventually led the Federal Reserve to conclude in 2017 that every dollar of student aid would ultimately lead to an average tuition increase of 60 cents. This trend has continued to hold true. While college tuition slightly decreased in the wake of Covid, the long-term increased student and government debt and higher long-term tuition costs will likely be felt for years to come.

The same principle of harmful government intervention applies to much of the government’s health care funding as well. In 1970, the average American had $1,848 (in 2019 dollars, adjusted for inflation) in annual healthcare costs. By 2019, the annual healthcare cost per person had risen to $11,582. This reflects a six-fold increase. Granted, the factors that tie into healthcare costs and increases are complex and numerous. But a review of the impact of government healthcare spending demonstrates a real impact that affected Americans across the country.

For instance, according to the Heritage Foundation, the Affordable Care Act more than doubled the cost of health insurance in the individual market from 2013-2019. This was no less true in Mississippi. Average monthly premiums increased by 149 percent, from $214 to $532, reflecting an annual increase of $3,816. Citizens could be using such funds to put in savings, invest in the economy, or simply increase their quality of life. Instead, they have to put that income towards healthcare.

While the advocates of big government often make politically driven promises of “free” education and “free” healthcare, history and current experience continue to undermine such claims. Sure, some may perceive the government paying for higher education and healthcare as a way to help citizens save money. But the increases in cost caused by these “free” programs make the government’s “free” money a little better than just a high-interest loan -only in this case, payback comes in the form of higher costs for everyone.

Free market economics and common-sense mathematics reject the concept of government inflating healthcare and education by its false promises of “free” funding. If someone gave Johnny $10,000 to use towards his college or healthcare, and it caused all the hospitals and schools to raise their costs by at least $10,000 in response, then that wouldn’t truly be “free money.” Yet somehow, the lessons of this basic scenario are discounted if the giver’s name happens to be Uncle Sam and, worse, if the “giver” got the funds by taxation from others rather than his own benevolence. As demonstrated by healthcare and higher education, this scenario has played out in the real world.

Government funds always carry a price tag that usually begins and ends with the wallets of the taxpayers. As Americans watch the increase in healthcare and education costs, they might do well to recall that the promises of “free” money from gushing politicians have seldom stood the test of time. Rather than going back to the failed model of redistributing wealth, government policy should return to the free-market principles that have a track record of prosperity.