Five Solutions to the Affordability Crisis

 

By Chris Talgo

The current political buzz term is affordability crisis. Every day, political pundits and politicians talk about the affordability crisis because they know it represents an existential threat to the American dream.

The affordability crisis faced by tens of millions of Americans is more than a political slogan; it is a visceral struggle that causes chronic stress and anxiety, breeds hopelessness and apathy, begets envy and rage, and sows disillusionment and nihilism.

In other words, the affordability crisis that is making it impossible for hard-working Americans to get ahead is untenable. If it is not solved holistically, it will likely foster social chaos that could result in radical socio-economic changes like the implementation of American socialism.

The time for political posturing and pontificating is over. Americans need viable solutions to the cost-of-living crisis before it is too late. Below are five simple solutions that are intended to address the root causes of the affordability crisis.

Government Spending

The fundamental driver of inflation that is crushing the lower- and middle-classes and has warped the overall economy is out-of-control spending by the federal government. The national government spends, prints, and borrows trillions of dollars each year, which devalues the currency and creates asset bubbles that are advantageous to the rich.

It is incumbent that Congress cut spending back to pre-pandemic levels, balance the budget, and institute long-term reforms for insolvent entitlement programs.

Housing Supply

Real estate agents say it’s all about location whereas economists would say it’s all about supply.

Clearly, the U.S. housing market is suffering from a supply shortage. The reasons for the lack of supply are varied: a huge increase in immigration under President Biden, decades of onerous environmental regulations, restrictive zoning rules, high property taxes, burdensome building codes, rent freezes, big banks buying single-family homes and turning them into rental properties, etc.

Incentivizing the construction of single-family homes is the obvious solution to the problem. Therefore, it would behoove governments at all levels in all states and cities to take prudent measures to incentivize home-building by decreasing red tape, easing regulations, and lowering property taxes.

Energy

Like it or not, abundant and reliable energy is essential to affordability because energy is the mother’s milk to modern life. Energy impacts the cost of every activity and economic transaction.

When the cost of energy is artificially increased due to government intervention, all Americans suffer, especially those at the lower end of the economic ladder. Wealthy Americans may get annoyed when a gallon of gas increases or their electricity bills balloon, but hard-working Americans are hit much harder when politicians play energy politics.

Bringing down the cost of energy by eliminating subsidies and mandates for expensive, unreliable, and unclean green energy at both the federal and state levels coupled with a drive to unleash affordable, reliable, and clean energy sources like natural gas would help alleviate the cost-of-living crisis.

Embrace Entrepreneurship and Nurture Innovation

Historically, America has been the land of opportunity because its economy was an incubator for entrepreneurship and innovation. Today, this is not the case.

Today, the barriers for entry into many markets are simply too high for entrepreneurs and small businesses to overcome. The economy, for lack of a better word, is rigged in favor of big businesses that have powerful connections, legions of lobbyists and lawyers, and politicians in their pockets.

This rotten, sclerotic crony capitalist system is more akin to European serfdom than the American experiment. However, it can be reformed.

Maybe it’s time to consider a new era of anti-trust legislation to break up industry-wide cartels that bully small businesses and deter open, fair competition. I think it is more than past time to loosen the regulatory labyrinth that big businesses have erected at all levels of government to prohibit start-ups. The same should apply to the maze of licensing requirements and other barriers that individuals face when they are just trying to get a business up and running. Create opportunity zones that over time will rekindle upward mobility.

Health Care

Like education, the cost of health care has far outpaced inflation. Although most blame the exorbitant cost of health care on greedy corporations, the real culprit is government intervention.

As government has become more embedded in health care spending and decisions, the cost of care has skyrocketed, and the quality of care has plummeted.

The solution is putting Americans, not government, at the center of the health care decision-making process via programs like health ownership accounts, direct primary agreements, and many more consumer-driven ideas.

In a perfect world, Americans would buy health insurance like they buy auto insurance. It would be portable, not tied to one’s job, not a one-size-fits-all policy, tailored to the unique needs and circumstances of individuals/families, etc.

Perhaps we should allow people who are young and healthy to purchase policies that take into account their lower risk factors. Maybe we should tie premiums to one’s health habits. There are countless ways to insert free-market forces, what some call the invisible hand, which would restore price signals and reintroduce the laws of supply and demand into health care. Doing this would significantly reduce the cost of health care and put more money in Americans’ wallets.

As history shows, when the masses think the system is rigged, they almost always reach a breaking point and demand revolution.

Thankfully, we have not reached this ominous point yet. However, it would be foolish to believe that the status quo is tenable.

The affordability crisis will likely worsen if current trends continue and political leaders refuse to address the root causes. This is not a partisan issue. It is the most important issue facing America as we prepare to celebrate the nation’s 250th birthday.

Chris Talgo (ctalgo@heartland.org) is editorial director at The Heartland Institute.

https://www.americanthinker.com/articles/2025/12/five_solutions_to_the_affordability_crisis.html