The High Cost of Living

Prices Soar Like the Noble Eagle

The cost of living rising.

People can’t keep up.

Housing. Insurance. Healthcare. Childcare. Energy. Food. Taxes. They’re all becoming increasingly expensive, leaving many people unable to afford the necessities.

All the while, we see an ever-widening wealth gap between those who have plenty and those struggling.

The cost of living has been on the rise for years and shows no signs of stopping

This situation simply cannot continue; something must change.

What’s Increasing the Cost of Living?

There are many complex but interrelated causes of the increasing cost of living. It’s a complicated, interrelated world we live in, one with misaligned incentives and a lack of transparency. Understanding the underlying causes of price increases isn’t always easy. It seldom is. But at a superficial level, we can identify specific costs that have increased at a higher rate than others.

Rising Inflation

The cost of living was already a problem before we saw this explosion in inflation. Inflation, when the cost of goods and services rises, erodes our purchasing power. This means that, even if our salaries go up, we can’t buy as much with that money as we could before.

Inflation is just another word for the increased cost of living. The difference is that inflation is defined by the government and economists. It reflects the higher cost we’re paying at the cash register. Economists keep an ongoing record of the cost of various goods in what’s referred to as the Consumer Price Index.

Measuring Inflation with the Consumer Price Index

The Consumer Price Index (CPI) is a key measure used to assess changes in the costs of everyday items purchased by consumers. Typically, the CPI tracks changes in prices related to food, housing, clothing, transportation, and health care. This measurement accounts for different price weights by assigning each item’s importance relative to all others; for example, food and other necessities are weighted more heavily than luxury items.

The CPI reflects how much consumers spend on goods and services. Rising costs cause inflation; CPI reflects these increases.

One of the most frustrating aspects of increasing costs is they are things we need, not luxuries. Some of these sectors we’re seeing prices increase the fastest include:

Housing Costs

While housing costs have come down since the pandemic highs, they are still much higher than many Americans can afford. In addition to the cost of a new home, the price of rent has seen drastic increases as well.

We are still facing a massive deficit in the number of homes available vs demand. In 2020, Freddie Mac estimated America has a nearly 4 million home supply deficit. High home costs make it increasingly difficult for people to afford a place to live.

Many have described this as a housing crisis, where more and more people cannot find affordable housing. Evictions and rotten living situations are becoming more and more prevalent.

Insurance and Healthcare

Increased insurance and healthcare costs are another major contributor to the high cost of living. Despite Obama, Trump, and Biden (and basically every other politician) making lowering health care costs a primary focus of their campaign, the cost of health care continues to rise, with the quality continuing to suffer. The broken healthcare system is a massive factor in the increasing cost of living.

Read about the broken health care system >>

Insurance companies can charge whatever they want.

Those fortunate to have insurance know there’s not much we can do but pay more and more. There’s not enough competition and transparency in the insurance markets to push costs lower.

Even with insurance, going to the doctor or seeking treatment is still incredibly expensive. High Deductible Health Plans (HDHP) mean that when we use care we’re still paying through the nose. We’re paying more and more for results that are worse and worse.

As a result, many people and businesses (especially small businesses) can’t afford to pay for essential healthcare services. As a result, they go without treatment until they end up at the emergency room to undergo expensive procedures, making health care even more expensive for all of us. A vicious cycle indeed.

The Cost of Childcare and Worker Shortage

Childcare costs are through the roof and are a big part of why costs, particularly for families, are so high.

The cost of child care has a complicated effect on the economy and inflation.

For many families, childcare is one of the biggest monthly expenses, often prohibitively expensive, costing more than many families can afford. This leaves many parents struggling to find affordable childcare.

The cost of child care keeps many parents out of the workforce, which increases wages overall, which increases costs.

Following the pandemic, many mothers decided to stay home rather than pay the exorbitant cost of childcare, leading to worker shortages that further drive inflation.

Energy and Gas

Energy costs have also increased much too quickly. Instability in Russia and Ukraine is making things worse. Oil and gas have become scarcer, and alternative energy sources are not able to make up for the difference in demand.

No, it’s not Biden’s fault or Trumps. Increased energy costs reflect a fragile global economy subject to disruptions. It’s due to poor leadership, unstable markets, along with the high up-front cost of sourcing or creating energy. Many oil and gas producers also stopped investing in production as the world seemed to pivot to renewables, understanding too late that solar, wind, and other renewables are not currently able to keep up with energy demand.

Food Costs

The cost of food is another major factor in the cost of living. Food staples like bread, meat, milk, produce – nothing is safe from increased costs. The cost of feed, fertilizer, water, pesticides, transportation, labor – all combine to drive food prices up for everyone. It’s an interconnected ecosystem that is difficult to manage.

An Aging Population

As the baby boomer generation ages, they are increasingly relying on social welfare programs like Social Security and Medicare. This puts pressure on the system and drives up costs for everyone.

And as the boomers leave the workforce, we don’t always have qualified workers to fill their shoes. A large number of retirees and soon-to-be retirees is having, and will continue to have, significant impact on inflation.


When was the last time taxes went down? Each paycheck we see up to a third of our pay just disappears into the wind. And what are we getting for it? A bloated Federal budget that spends much more than it brings in results in higher taxes for everyone.

Bringing federal spending under control is paramount if we want to bring down taxes.

People Just Don’t Make Enough

The rising costs wouldn’t be so bad if our paychecks kept up. But it’s no secret that workers aren’t taking home enough money. Many people are barely scraping by.

Companies pay average workers and vendors as little as they can. Meanwhile CEOs and stockholders make more and more money off employees’ hard work.

The Federal Reserve currently wants to bring unemployment, and by extension wages, down to slow down inflation. But unfortunately, it’s average Americans that will see their paycheck get smaller, or disappear altogether.

The wealth gap in contributing to inequality, which leads to increased instability.

Something Has to Change

This situation simply can’t continue like it is if we want to avoid potentially devastating conflicts. When people struggle to pay the bills and feed their families, they grow angrier and angrier. Unless we bring down the cost of living, polarization, violence, and anger will get worse and worse.

Whether it’s creating better economic policies, more equitable taxing, or investing in social programs that help people meet their needs more easily, there are steps that we can take to bring down the cost of living for everyone. Steps like increasing wages, providing more affordable housing and childcare, making healthcare more affordable, promoting upward mobility, controlling government spending, and on and on.

We need to solve problems>>

But most importantly, if we want to create a more equitable society where everyone has access to a decent standard of living, we need to address the root causes of rising costs.

We can’t just keep putting Band-Aids on the problem; we need systemic change to address our biggest societal problems. Until we do so, our society will continue to struggle under the weight of rising costs and growing inequality.

Unfortunately, systemic change requires things society is lacking. We need real leadership, cooperation, better incentives, responsible business, more transparency, an honest media, and on and on. It requires find ways to close the wealth gap without destroying the economy or creating unmanageable government bureaucracy.

It requires honest conversations and difficult sacrifices.

In short, we need solutions.

I hope you’ll join me in exploring the root causes of the increasing cost of living crisis and discussing potential solutions.

What do you think is the best way to bring prices down?

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