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.
Mississippi has a challenge in front of them as it continues to address the economic problems that face our nation. One factor that needs to be addressed in this complex issue is the number of regulations within the state. As an underlying cause of these regulatory excesses, the state has dozens of regulatory boards and agencies, with many barely even cataloged by the state government itself.
The number of regulatory boards has become bloated to the point that it is hard to keep track of what board oversees what regulation. To date, there is not even a comprehensive list of all the agencies, boards, and commissions that exist within the state.
Ultimately this reflects on government inefficiency and excessive control of the economy. Given the right context and purpose, regulations can serve as a helpful tool in ensuring fair and open competition. Now, however, regulations are often used as a political weapon to stomp out competition and economic progress. The proliferation of new rules, boards, and agencies is commonplace. In fact, this is so much the case that the legislature has no standardized system in place to notify stakeholders in government and the populace when a board is created or repealed.
Having so many regulatory boards has practical consequences. In 2018, the George Mason Mercatus Center and the MCPP reported a snapshot of Mississippi’s current regulatory scheme. We found that Mississippi’s Administrative Code is far more expansive in terms of regulations than it needs to be. In fact, it totals 117,558 restrictions, is comprised of 9.3 million words, and if you sat down and read it, it would take 13 weeks to read!
This does not necessarily mean regulations do not have their place. Regulations are, after all, enumerated powers given to state legislatures as a tool to govern. However, such power must come with limits. For one, overregulation stifles innovation and economic growth, a necessary component to society, especially during these times. As Broughel notes, such a system of regulations, over time, has a detrimental impact on the economy. In fact, if a cap on regulations was established and the state simply kept that number for a couple of years, the economy could grow substantially.
On another note, overregulation places a greater burden on the government to ensure that various provisions are met. When a government grows, it becomes harder to manage it efficiently. The net result is an economy that is snuffled out by too much oversight and a government that is overwhelmed with too many rules and regulators to keep track of.
If Mississippi desires to become a top state that provides incentives for families and businesses to come and settle there, the state has to get a handle on its regulatory schemes. In previous legislative sessions, policies have been proposed to do just that. However, there have not been enough significant policy reforms that would manage this problem effectively. As we move into the next legislative session, it should be a top priority to lessen the state government's hold on the economy by diminishing the extensive nature of its state regulations. While the government uses regulations as a context to insist that the people are accountable to its authority, how can the people themselves hold the government accountable if the state itself does not even know how many regulators there are? Rather than having a system that lacks accountability and burdens its people, the Magnolia State needs a regulatory overhaul. Meaningful reforms would ensure that every regulation serves a legitimate purpose and that every regulatory authority has transparency before the people it serves. It’s time for Mississippi to move forward.
When government overreach and excessive regulation occur, minorities often bear an extra burden. While Mississippi has a myriad of overbearing regulations, excessive healthcare regulations are potentially the most damaging. Indeed, Mississippi’s burdensome healthcare regulations have contributed to certain minorities having healthcare gaps.
According to the United States Census Bureau, 41 percent of those in the Mississippi population are a minority, consisting mostly of African Americans. This is one of the highest minority percentages in the country.
Ultimately, the state of Mississippi has a crisis of healthcare access that goes across all ethnicities. However, due to the geographic nature of healthcare access problems, healthcare access challenges in certain areas with a higher percentage of African Americans can lead to heightened challenges for the minority population as a whole.
There are several contributing factors to the reduced minority healthcare access in Mississippi. While the regulatory excesses on healthcare in the state have several variations, perhaps the most burdensome is the state’s Certificate of Need (CON) laws. Under CON laws, new healthcare providers must get permission from the state before beginning operations in a specific region. Additionally, the laws allow existing providers in the region to give input on whether not the new provider is needed.
While CON laws are problematic no matter where they are, these laws' effects on healthcare access are especially strong in rural areas. Fundamentally, rural health care systems are generally more sensitive to bad health care policy than their urban counterparts, and CON laws have an especially strong effect. According to research by the Mercatus Center at George Mason University, CON laws reduce the number of healthcare providers, increase the cost of healthcare in rural areas, and ultimately lead to lower health outcomes.
Mississippi has the highest percentage of rural African Americans in the country. Thirty-eight percent of the rural population is black. When placed in the context of CON laws, it is worth noting that the state has among the worst health outcomes for blacks in the country. In many states, the majority of the black population is urban-based and experiences a lesser impact than CON laws' effects on blacks in rural areas. Meanwhile, African Americans in Mississippi bear the heightened effect of CON laws on rural areas.
Additionally, the inherent concept behind CON laws places minorities at a disadvantage. CON laws grant approval for a new healthcare provider to open up only if the state determines that the population at large needs a particular healthcare service. However, the central planners behind CON implementation often fail to account for other factors, such as the positive benefits of increased competition for minorities.
To illustrate this, it is helpful to look at a study conducted by Rutgers University. In the wake of CON repeals in New Jersey, the study found that certain cardiovascular procedures saw an increase in “utilization overall and did so more rapidly for blacks.” This was due to the fact that increased competition from new providers led to more providers working with minority populations that were outside of their traditional patients.
CON regulations on healthcare provider expansion might help protect incumbent providers from new competition, but they do little to help everyday Mississippians. If Mississippi wants to see the void of healthcare providers in the state filled, a key step is to remove this red tape that inhibits its citizens, rural areas, and minority communities. Government control and central planning of the health sector is a recipe for deprivation, it’s time for Mississippi to turn the tide.
Precious metals like gold and silver have an interesting relationship with state economies and currencies. While the federal government has moved away from precious metals in favor of fiat currency, some state governments have also put policies in place that discourage gold and silver investment. Unfortunately, Mississippi is no exception.
Traditionally, currencies were managed on a fixed basis, meaning that governments print and distribute money based on the amount of gold and silver that is available. However, as time has moved on, these standards have been neglected and governments now operate on a more “flexible” monetary system. This means that the federal government can print money at its discretion. The problem is that the more the government prints, the less valuable American currency becomes, which causes serious economic problems like inflation.
It is no secret that the nation is suffering a crisis of inflation currently. This is due to a variety of reason that can be found elsewhere. However, state responses to this problem have started going in the right direction as governments begin to release controls like taxation on precious metals. The reason why this is a good thing is because, while precious metals are also good used for trade, it is effectually a currency. When states tax the sale of precious metals it is essentially taxing money itself. It simply does not make sense and is akin to going to the grocery store and being charged a tax for breaking out a five-dollar bill. This causes individuals to not engage in the precious metals market and distances the economy even more from a grounded monetary system.
A couple of days ago, the Money Metals Exchange and Sound Money Defense League released an index ranking the states on their precious metal policies. Each state is evaluated based on 12-criteria system that primarily examines whether states levy a sales tax against precious coins and bullion. On this point system, Mississippi ranked one of the lowest (7th worst) overall. This indicates a specific problem that can be remedied within the state by removing government taxation on precious metals.
As it stands, Ohio is the only state that has establish policies allocating a percentage of state-held pension funds to physical gold. Additionally, the majority of states throughout the country have either significantly decreased or removed altogether sales taxes on precious metals altogether. This is a good policy in returning to an economy that is grounded in something fixed. This is achieved by treating things like precious metals as distinct from the rest of the economy.
Mississippi is one of only nine states that imposes sales tax on precious metals, thus, it levies a 7% tax on gold and silver purchases. However, it is currently part of a group of states that are considering lessening or removing the sales tax on gold and silver. In the 2021 legislative session, a bill was introduced that would have repealed the sales tax on gold, silver, platinum and palladium bullion. However, the bill died in committee.
Repealing the sales tax on precious would be a good change for the economy. Prices for precious metals, and the inflation rate that comes along with them, should be able to fluctuate naturally without states artificially interfering. This is the essence of how free market economies are supposed to operate.
Friendly precious metal polices on the state level could lessen the burden for individuals like investors engaging in the market and including physical metals as part of their portfolios. Such reforms could also help citizens seeking to protect their savings and retirement from the erosion of inflation.
As Ron Paul describes it when he testified before the Arizona Senate Committee when it considered gold and silver monetary reform: “It makes no sense to tax money.” Mississippi should follow this commonsense principle and remove taxation on precious metals.
It is fairly common knowledge that many regulatory policies are arbitrarily instituted and enforced. While the existence of burdensome regulations is fairly well recognized, the specifics of just how excessive certain regulations can be is worth noting. This is especially true for new technologies and businesses that threaten entrenched interests.
At face value, the stated purpose of most regulations is to prevent some kind of harm. However, the question itself really hinges upon how regulators define the term harm. Some regulations do have a genuine intent against preventing actual harm, such as the widespread ban against driving while intoxicated. But unfortunately, the history of regulatory policy has a long history of excessive and even laughable rules.
While regulatory excesses have come in all sorts of contexts, there is a historical trend of new technologies often receiving the special ire of regulators. For instance, in the early 1900s, the advent of “horseless carriages” (better known today as cars) led to calls from some that all cars be required to follow rules that would be considered laughable today.
One such rule read: “automobiles traveling on country roads at night must send up a rocket every mile, then wait ten minutes for the road to clear. The driver may then proceed, with caution, blowing his horn and shooting off Roman candles, as before.” In addition, the proposed rules also required that cars change their paint colors every season to blend in with the scenery and not scare horses. While such rules seem comical at best in our modern context, the Pennsylvania state legislature approved the rules. The rules would have become settled law if the governor had not had enough common sense to veto them. If these rules had been enacted, there is little chance that the high speed interstates and highways of today could have become a reality.
Also in the early 1900s, the new technology of electricity had just started to become mainstream. Thomas Edison invented a form of electrical transmission to power his lightbulbs that became known as Direct Current (DC). Meanwhile, his rival, Nicholas Tesla, had developed an alternative type of current. This current was more effective at carrying electricity at long distances that became known as Alternating Current (AC).
Thus began the “War of the Currents.” Outraged at the prospect of AC current threatening the patent royalties he received from the use of DC current, Edison began a campaign to place AC current under the condemnation of regulators. He used the powers of the mainstream newspaper media as a platform to spread a hysteria known as the “Electric Wire Panic.” He put on a series of public electrocutions of animals using AC. Edison even funded the invention of the first electric chair (using AC, of course) as another platform to place AC current in a bad light.
Edison got close to his goal of stoking enough public hysteria for regulators to ban AC current altogether, but he was never fully successful. In fact, AC current eventually won over the electric industry as a safer and more efficient current, causing Edison’s DC current to fall out of widespread use. Yet, the power of government regulation almost eliminated the technological innovation found in AC current that allowed for electricity to travel at high voltage for long distances.
Yet the excessive regulations of yesterday were not restricted to new technology alone. Much like today, businesses were restricted as well. For instance, from the 1860s to the 1920s, several states had restrictions on the ability of banks headquartered within a state to open multiple branches. In this way, expansion was impeded, and existing interests were protected from new competition. On the national level, banks that wanted to operate across multiple states had to go through an onerous process of state-by-state restrictions requiring specific government approval for expansion. In some states, national banks could not open branches at all.
Finally, with the passage of the McFadden Act in the 1920s, banks were able to have more freedom, and today we see banks freely operating across multiple states. Someone from Mississippi vacationing in Georgia can often find a branch of their home bank with little trouble. This might not be the case if regulations had not been repealed.
While it is easy to point fingers at the past, similar regulatory absurdities exist today as well. Modern examples abound, such as excessive regulations on Bitcoin transactions and the absurd Certificate of Need laws that require new health care providers to get permission from competitors. The error of excessive regulation is no less real in 2021 than it was in 1901 or 1921. Instead of protecting old technologies and entrenched business interests, policymakers should learn from the lessons of the past and ensure that illogical regulations are placed in the dust bin of history where they belong.
It goes without saying that the post-pandemic world will (at least initially) operate differently than how we are used to. We are essentially in this state of limbo in which many aspects of society have returned to normal, and yet we still see the effects of the pandemic in effect in areas like schools, cities, and public spaces. Economically, the world is placed in a precarious position as stocks continue to fluctuate as fear of the rise of different Covid variants comes into play.
However, this precarious situation has had several impacts on society beyond just the stock market. Due to the fear of some variant rising or more government restrictions being instituted, the percentage of people leaving the workforce for retirement has significantly increased in recent years, and the average retirement age is now 55. The Peterson Institute for International Economics demonstrates numbers that suggest that even those people that are not old enough to retire are less likely to return to in-person employment because doing so may negatively affect their kids' ability to go to school. The net result of this is exactly what America is experiencing at the moment: slow labor-force recovery.
Yet, as Niall Ferguson notes, the U.S. labor market is facing an inflation surge that cannot simply be attributed to fear of Covid exposure. For one, the Biden Administration erred in providing a $1.9 trillion stimulus package earlier in the year when support had already been provided in 2020. The effect of this policy is that people now have excess savings that have provided that extra cushion needed for retirement to become a reality.
However, Ferguson also errs in his assessment that tax credits and cuts in marginal personal income tax rates negatively affect the incentive for people to return to the workforce. The assumption is that those with more money in their pockets will have less of an incentive to work. While this may be true within the context of giving people “free” paychecks in the form of stimulus packages, the effect of tax cuts helps (or at the very least contributes to) economic recovery.
When people receive tax cuts, it does not mean that they can now live with excess money. They still must pay taxes and still have additional expenditures in which to pay. However, the difference is that they now have an incentive to engage in the economy in a much freer manner and that in turn requires them to have jobs to maintain that same level of engagement.
In other words, tax cuts are effectually different from providing stimulus packages. Unfortunately, Ferguson treats them as if they are synonymous. The reality is that the fewer taxes person has to pay, the healthier the economy gets. The labor force is included in that equation. In fact, when Trump cut taxes during the pandemic, it greatly helped the economy. It is when those cuts are removed that recovery becomes stagnate.
Moving forward for the nation and for Mississippi, public policy must be crafted in such a way that encourages people to work and engage in the economy rather than enable them to remain at home, reliant on government money. Ironically, both government interference and an excessive fear of Covid originate from taxpayers giving into a narrative that does not necessarily reflect reality. Relying on the government to return everything to normal is not the answer. Only when people get their hands dirty again and get back to work will the economy eventually return to normal.
In the quest to expand broadband, some have suggested the implementation of government-owned broadband networks as a way to expand internet access. However, before such proposals are adopted, it is important to consider the key problems with government-owned networks.
In the first place, it is important to define what a government-owned network is (GON). GONs are broadband networks that are owned by a state or local government entity. The government entity usually also handles the operation of the network. Advocates of such networks claim that they help fill in the gaps in private sector service, but it is important to test such claims against the actual track record of the networks.
Mississippi has not seen a widespread implementation of GONs. But the effect of potential future implementation should be considered in light of the experiences of other states. According to a study conducted by the Taxpayers’ Protection Alliance, GONs have a consistent track record of costing more than expected to build and maintain.
Such networks consistently do not reach their targeted populations effectively, with many of them only reaching as little as 40 percent of the targeted households. On top of this, many municipalities have incurred millions of dollars in debt that the broadband networks themselves have not been able to pay for. This has led to higher taxes in some places as municipalities try to recoup their losses.
These facts point back to the principle that government entities interfering in the market by shifting taxpayer funds is an ineffective strategy for broadband. Not only are such programs prone to the problems mentioned above, but there is also the systemic issue with the fact that such government intrusion disincentivizes private sector broadband investment.
While a government network pulls from the flow of taxpayer dollars and lacks real competition, private sector companies have to deal with real challenges in a competitive market. In this way, government broadband has an unfair advantage over private-sector broadband companies. This stagnates private sector broadband investment in these areas and makes the broadband infrastructure expansion the exclusive domain of central government planners. Such centralized planning has a consistent track record of faulty projections and an inability to meet the demands of the market.
In order to prevent such failures, Mississippi should do as other states have done and restrict the formation of government-owned networks. Particularly in the wake of new broadband funding coming into the state, leaders should ensure that government entities do not use the funding to create such networks that will put them into debt and crowd out the private sector.
Mississippi needs real solutions to broadband expansion. While municipal broadband advocates often insist that government-owned networks are a pathway to expansion, empirical evidence and free market principles suggest otherwise. Rather than bring false “solutions” to the broadband gap, Mississippi should pursue free-market models that reject the poor track record of government-owned networks.
Mississippi currently stands as one of the cheapest areas to buy a house. In fact, the state ranks 2nd in the United States in cheap housing at a median value of $144,074 per a typical single-family home. However, that home value only increases at a rate of 9.8%, one of the lowest in the nation.
The state government has instituted policies to make the price higher than it should be while keeping the increase in value at a lower rate. One such policy that has affected the prices of housing is the policy towards lumber. Currently, lumber costs are up, and the demand is high. Mississippi currently has plenty of it to make newer houses. The problem is that production cannot keep up with the demand, and it certainly does not help when the Mississippi government places too much of a burden through regulations and bureaucratic control. Mississippi has, in the past, relaxed these regulations in order to ease the burden. It should do so again.
Perhaps the biggest factor in housing costs, however, is the need to build the Mississippi economy. The housing market is often seen as the indicator of a thriving state economy. This is because people are more willing to move into the state in which business is booming. Due to competition, if the economy is thriving and more people want to live in Mississippi, the prices will find its way to an appropriate level. In other words, if Mississippi wants cheap, quality housing, building the economy and letting the market fluctuate naturally is the best way to go.
When considering policy in this context, thinking about the big picture is often the most effective. Edmund Burke often asserts that policy change needs have a specific justification. Simply throwing things at the wall to see what sticks will bring about unforeseen consequences, ones that are often not welcome. If Mississippi sees a thriving market such as the one it sees currently in real estate, it is best to step back and let the natural benefits of the free market take hold. Increasing taxes or implementing regulations will only stifle the process and either plateau or decrease the market's progress.
You know you’ve seriously annoyed progressives when you get singled out for a hit piece in the UK’s Guardian newspaper by one of their New York-based columnists. According to Arwa Mahdawi writing in today’s Guardian, I am a “toxic politician” whom the UK was able to "successfully export."
What was it that prompted Miss Mahdawi, whom I don’t believe I have had the pleasure of meeting, to launch such a highly personal attack on a private citizen in a national newspaper? (Besides Brexit, of course).
Her tirade seems to have been prompted by the fact that I had the temerity to point out that the United States is more prosperous and innovative that Europe.
Well let’s consider the facts, for a moment. Here is a table showing how the richest countries in Europe compare the US states in terms of GDP per capita. Germany, Europe’s richest country, ranks below Oklahoma, the 38th richest state in America.
The UK is poorer that Arkansas and West Virginia. Even my own state, Mississippi, ranks above Italy and Spain. If you break the UK down by regions, Mississippi is more prosperous than much of the UK outside of London and the south east.
According to Miss Mahdawi, the US can’t be more successful because she lives in New York, where she “pays way more” for her “mobile phone plan and internet than she would for comparable services in the UK or anywhere in Europe.
Apparently the relative cost of her New York phone bill proves the Europe is better than America. Or something.
Perhaps if Guardian columnists made a little more effort to try to understand what those they write hit pieces on actually thought, they might recognize that free marketers favor more free markets.
But if they did that, then they might be forced to acknowledge that one of the reasons why certain sectors of the US economy have become cartels, without enough consumer choice and competition, is precisely because America is currently led by an administration that seeks to expand the role of government and make America more European. Much easier to make childish insults.
The interesting question to ask is why so many of Europe’s elite feel the need to lash out at anyone that suggests that the American model works better that the European.
In the UK, it is constantly implied the America’s health care system is vastly inferior. Really? Five years after diagnosis, only 56% of English cancer patients survive, compared to 65% of American patients. Poorer Americans in poor states often have healthier outcomes that many in Britain.
But again, these facts are overlooked. Anyone with the temerity to mention them gets vilified (“toxic”). And the many shortcomings in the US system are cited as evidence that nothing good ever happens stateside.
When Europe’s elites talk about America, often what they say – or won’t say – tells us more about them, than anything happening over here. The reality is that by most measures the United States gives ordinary citizens far better life chances than the European Union is able to provide for her people.
Deep down Europe’s elites know this. And they fear that their own citizens know it, too. So they constantly put America down in order to maintain their own status across the pond.