Price Controls Are the Worst Possible Solution to Inflation

Source: Reason
by Joe Lancaster

“Nearly nine out of 10 Americans are worried about inflation, according to one recent survey. And they’re right to be concerned: When inflation outpaces growth in wages, your money is worth less. As with any political issue, opinions vary on what can be done about inflation, which hit its highest level since 1982 in November. But some suggestions are simply not worth trying. … Price controls have a tendency to create shortages and surpluses regardless of their effects on inflation. When a price for a good is set too high, nobody can afford it, creating a surplus. And when a price for a good is set too low, people are incentivized to overbuy and hoard, and the supply is depleted. You do not have to look to far-flung autocracies like Venezuela to find examples: All across the U.S., price controls lead to astronomical health care costs and a scarcity of rental homes.” (01/03/22)