Affordability Is the Economic Test Washington Can’t Ignore 

Midterms are often used to understand the mood of the country, and this one is no different. As we barrel toward Election Day, many commenters say that this year’s midterms are a referendum on the economy—and affordability is certainly top of mind for households across the nation.

Americans don’t experience the economy in spreadsheets or monthly reports. They experience it at the grocery store, at the gas pump, and when they calculate whether they can afford a mortgage payment at today’s interest rates and home prices.  

On paper, the U.S. economy has many reasons for optimism: Economic growth is positive, the labor market is relatively strong, businesses continue to invest, and the stock market has reached record highs. America is extraordinarily productive and innovative.  

But tell that to a family struggling to buy their first home, or the recent graduate unable to invest in capital markets because he’s drowning in student debt. Most Americans recognize that the economy has made significant progress in many sectors, but even though many topline numbers look good, it doesn’t feel that way for many Americans.  

Two things can be true at once: The economy can grow while Americans experience a genuine affordability crisis. 

It’s important first to identify what is working. Many federal policies have made significant headway in providing targeted relief and expanding the broader economy. 

Tax cuts have allowed households, workers, and businesses to keep more of what they earn while simultaneously improving incentives to work, save, and invest. Deregulation continues to remove unnecessary costs that ultimately fall on businesses and consumers. Cutting red tape makes it cheaper for businesses to produce goods and services while improving quality and affordability for consumers.  

Getting the inefficient government out of the way isn’t constrained to regulations; the Trump administration has reduced the federal workforce to roughly 2.68 million, the lowest level since 1966. By shrinking the size and scope of a large, expensive, and intrusive government, the productive private sector is better able to innovate, create jobs, and contribute to economic growth. 

Those are genuine economic tailwinds, and policymakers should build on them. But an economy can still be growing without feeling perfectly affordable.  

Prices remain elevated across the economy, consumer confidence is weak, borrowing costs are high, and Washington is running trillion-dollar deficits with no serious plan to stop. Those pressures show up most clearly in some of the largest expenses facing American households: housing, education, and energy-driven inflation. 

Homeownership feels increasingly out of reach for many young Americans, and renters also face high prices. Policymakers too often subsidize demand or regulate supply without addressing government controls as the root cause of housing costs. If Washington wants housing to be more affordable, it needs to be easier to build more of it, not borrow for it.  

It’s the same story for higher education. Washington helped construct a financing system that insulates colleges from price discipline. As federal loans expanded, students gained greater access to borrowing while universities faced no pressure to control tuition costs. The answer isn’t another bailout that would shift costs to taxpayers. It’s restoring accountability to the market and getting government out. 

Another problem Americans encounter virtually everywhere is inflation. It eats away at weekly paychecks by making household necessities—from groceries to gas—more expensive. In September, the Consumer Price Index was up by 3.7% from a year earlier, with energy prices up more than 20%.  

Persistent inflation has consequences beyond the checkout counter. Inflationary pressures keep interest rates elevated, raising the hurdle for buying a first home or financing a small business. It also means Washington’s enormous debt burden becomes increasingly expensive to service.  

Pointing out these symptoms is easy. Diagnosing the illness and prescribing an antidote is more challenging.  

The conventional Washington answer is government meddling: Regulate prices, provide a subsidy, forgive a debt, impose another mandate, or otherwise try to make an expensive product appear less expensive to the person purchasing it. 

In reality, less government is needed, not more—despite the increasingly fashionable socialist talking point. 

The better approach is competitive capitalism and supply-side affordability. Increasing supply, competition, productivity, investment, and opportunity will help Americans afford more because the country will produce more. When it’s easier to build homes, produce and transport energy, and start and expand businesses, Americans feel relief.  

The current economy is not perfect, but it is far from broken. The obstacles standing between Americans and prosperity are policies that make housing, energy, school, hiring, and investment more expensive—in addition to government intervention that too often worsens the problem.  

Americans don’t need Washington bureaucrats telling them that more government will solve the issues government itself created. They need policymakers who acknowledge economic realities without surrendering to pessimism, while recognizing that America remains extraordinarily capable of delivering results with the right policies in place. 

Affordability comes from abundance, and competitive capitalism gives American families and businesses the freedom to create it.  

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