Las Vegas Sun

March 28, 2024

LETTER TO THE EDITOR:

Let’s make sure we honor law of supply and demand

Health care, oil and college tuition grow more expensive by the week. So we pass laws to make health care “affordable,” and force renewable energy use, and provide more college tuition assistance, but still prices rise.

Some say greed is the cause. Then why would health insurers be greedy, but not auto or life insurers? Why would the price of oil ever decline? And are colleges greedy? Maybe greed isn’t the cause of higher prices.

Greater access to tuition assistance from government loan programs increases demand for a college education, without an increase in the number of colleges or professors, so the price of college tuition rises. Health insurance and government subsidies give more people access to health care, without an increase in the number of hospitals or doctors, so the price of health care rises. And restrictions on drilling limit the supply of oil, while global demand rises, so oil gets more expensive.

Supply and demand alone determine the price of something. All government can do is distort supply and demand to create an artificial, unsustainable price. These distortions cause misallocation and inefficient use of finite resources. And these effects, in turn, cause widespread hardship and untold suffering.

As citizens of a free republic, it is up to us to understand these things and to elect government representatives and leaders who will institute laws that allow supply and demand to function. We have no one to blame but ourselves if we fail to do so.

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