How to Think About Affordability

“Affordability” is the word grabbing the headlines in public discourse these days.

However, if affordability is a problem, it’s important to be clear about what exactly the problem is and what can be done.

Gallup has new polling data noting that the “high cost of living continues to top Americans’ list of the most important financial problems facing their families.”

Per Gallup’s new data, 31% say “high cost of living/inflation” is the most important problem,“ 13% say energy costs/oil and gas prices, 13% say "cost of owning or renting a home” and 8% say “healthcare costs.”

But “cost of living” and “affordability” are not the same thing.

“Cost of living” is just that — the costs of items purchased for personal and family needs.

But “affordability” is my capability for making these purchases.

A top-of-the-line Mercedes is not affordable for most working Americans. But for Jeff Bezos or Bill Gates it is nothing.

What’s important is that my cost of living is not increasing faster than my income — what I can pay. It is critically important that we are looking at both.

Bernie Sanders, America’s favorite socialist, is good reason why we should be thinking about this.

Sanders is quite right, for instance, that health care costs in our country are a problem, and as he regularly notes, it is true that health care expenditures here, as percent of GDP, are twice what they are in many other industrialized countries.

But Sanders’ answer to the problem is turn it all over to government, which is the cause of the problem, not the solution. We have runaway health care costs in our country because we have too much government, not because we don’t have enough.

Capitalism works because individuals running their own businesses in a competitive marketplace keeps everything sharp and efficient. Take away the competition, substitute bureaucrats for private ownership, and the mess starts.

Per Petersen-KFF Health System Tracker, in 1970, U.S. health expenditures as a percentage of GDP stood at 6.9%. By 2024, it was up to 18%.

Also, per Petersen-KFF, in 1970, out-of-pocket expenditures on health care amounted to 32.7 % of total health care spending and public health insurance amounted to 22%.

By 2025, the out-of-pocket expenditures dropped to 10.5% of the total and public insurance increased to 42.6%.

More government means more waste, more inefficiency and more fraud, hence higher costs.

The U.S. Government Accountability Office reports $186 billion in improper payments made by the federal government in 2025, up $24 billion from the year prior. Medicare, Medicaid and SNAP (food stamps) account for $104 billion of the $186 billion.

But again, let’s recall that affordability is not just what things cost, but our capability for paying.

More government — more socialism per Bernie Sanders’ dream — means less economic growth and lower incomes, hence diminished capability for each household to make purchases.

The Fraser Institute publishes an annual Economic Freedom of the World report, measuring economic freedom in 165 countries worldwide. Countries that are the most economically free are those with the least government interference in the economy.

Per Fraser, the top 25% of countries in economic freedom have average per capita income 6.2 times higher than the bottom 25%.

The rate of poverty in the least economically free countries is 25 times greater than in the most economically free.

As we have the “affordability” discussion, it is critical we keep this in mind.

Areas of the economy that are getting the most attention are the overall rate of inflation and energy costs and housing costs in addition to health care costs.

Those on the left, the progressives, see rising costs as an opportunity to advance their big government agenda.

But that agenda will just make costs worse and diminish economic growth and hence incomes, reducing our ability to make purchases regardless of what things cost.

The Patriot Post® · How to Think About Affordability