Biden Admin and Fed Market Distortion
Commentary
Federal Reserve control over interest rates, combined with government money creation, distorts markets, causing booms and busts, high household debt, government deficits, and high real estate and education prices. President Joe Biden’s student loan forgiveness program will increase educational costs while increasing government spending by as much as $1.6 trillion.
The market for nearly every product, from hamburgers to shoes, is governed by supply and demand. If producers charge too much for a product, demand goes down, and the price goes with it. This signals to the producers that this good is less popular, and they will produce fewer of them. If the price continues to drop, the suppliers stop producing it because there is no demand. By the same token, if demand keeps rising, the price goes up, and producers make more of that good. This happens naturally without government intervention because of supply and demand—Adam Smith’s “invisible hand.” When Bart Simpson toys were popular, Mattel’s president did not have to tell the toymaker to make more of them….