The Washington Examiner recently ran Jennifer Schubert-Akin’s op-ed on government vs. free-market solutions. The op-ed highlighted Steamboat Institute’s recent Campus Liberty Tour debates at UT Austin and University of Maryland between Charles Payne and Bakari Sellers on this topic.
Jennifer analyzes the problem of the high cost of childcare and explains why proposed government solutions wouldn’t be as effective as free-market alternatives. She writes:
Consider one of the Democrats’ major proposals: universal prekindergarten for children ages 3-4 and enormous subsidies for infant care. Affordable child care is clearly a problem facing the country. Yet it’s highly debatable whether these government proposals are the best solution.
Subsidized child care would significantly worsen child care shortages by artificially boosting demand. It’s no surprise that nations with the most socialized child care systems also have the longest waitlists. In France, for instance, approximately one-quarter of families lack access. Such shortages may result in even fewer parents being able to access child care than under the market-based status quo.
Subsidies also tend to reduce quality because providers don’t need to perform as highly to attract consumers. It’s also unclear whether subsidized infant child care would offer parents significant financial savings in the long run. Subsidies generally cause providers to raise their prices, reducing or eliminating the subsidy’s value. Higher education is perhaps the best example of this phenomenon.
Then there’s the cost of these government programs via the higher taxes needed to pay for them. Advocates of new spending generally ignore this side of the ledger. Deficit spending and printing money to pay for these programs in lieu of tax hikes would only fuel the inflation fire. In contrast, free market solutions can address societal problems without such negative unintended consequences.
For instance, free market reforms to relax onerous licensing requirements and strict day care regulations, including those that require small child-to-caregiver ratios, can lower child care prices. Reducing income transfers that pay some people nearly as much or more to stay home than work can alleviate the labor shortage that’s driving up child care prices.
The Steamboat Institute is bringing this robust debate over government versus free market policies to college students who may not have heard both sides. On Tuesday, we’re at the University of Texas, Austin, and on Wednesday, we’re at the University of Maryland. Charles Payne of Fox Business and CNN political commentator Bakari Sellers will take part in the debates. Our motivation?
Free market solutions that widen the path to prosperity deserve just as much consideration and moral legitimacy as government efforts.
Read the full op-ed HERE.