Every Program Designed To Make It Affordable Made It More Expensive — The 100 Year Pattern

Añadido: 2026-05-28

[00:00:00]In 1965, the federal government launched Medicare and Medicaid to make healthcare affordable for every American.

[00:00:09]Before 1965, healthcare [music] consumed approximately 5% of the American economy.

[00:00:16]Today, it consumes 18%. [music] In 1965, the federal government launched the student loan program to make college [music] affordable for every American.

[00:00:27]Before 1965, a year of college cost $400.

[00:00:32]Today, >> [music] >> it costs $40,000.

[00:00:35]In 1977, the federal government expanded [music] the Community Reinvestment Act to make home ownership affordable for every American.

[00:00:44]Before the expansion, the average American home cost approximately [music] two times the average annual salary.

[00:00:50]Today, it costs approximately seven times the average annual salary.

[00:00:55]Same pattern, [music] every single time.

[00:00:59]Here is why this keeps happening, and it is not [music] complicated.

[00:01:04]When a third party pays for something on your behalf, you stop being price sensitive.

[00:01:09]When you stop [music] being price sensitive, the seller raises the price.

[00:01:14]When the government then increases the subsidy to cover the higher price, the seller [music] raises it again.

[00:01:22]The economist Milton Friedman documented this pattern in 1962, more than 60 [music] years ago.

[00:01:30]He called it the iron law of subsidies.

[00:01:33]Every subsidy [music] eventually gets absorbed by the seller as a higher price.

[00:01:39]The intended [music] beneficiary ends up paying more, not less, because the market adjusts to the new money flowing in.

[00:01:46]Healthcare costs more >> [music] >> because Medicare exists.

[00:01:50]College costs more because student loans exist.

[00:01:54]Housing costs more because government-backed mortgages exist.

[00:01:58]This is not a political [music] opinion.

[00:02:00]This is 100 years of documented American economic history. [music] And Washington has known about this pattern for at least 60 of those years.

[00:02:10]They keep doing it [music] anyway because the program announcement is popular. The price increase comes later.

[00:02:17]And by then, nobody remembers who called