The Democrats’ ‘Affordability’ Scheme

It has been postulated that, for every economist, there is an equal and opposite economist – and they’re both wrong.

True, perhaps, but, at the intersection of economics and politics, no economists have ever been more wrong than modern Keynesians.

In the 1930s, John Maynard Keynes (1883-1946), a Cambridge-educated mathematician/statistician, economist and macroeconomic theorist, revised classical theories of economics.

Keynes rejected the classical theory of supply and demand, writing that aggregate demand, instead, determines economic output. He advocated government intervention in markets and deficit spending to smooth out economic cycles. Keynes named such intervention “priming the pump.”

Back then, Keynes’ notion of “increasing aggregate demand” through deficit spending was considered a plausible response to economic downturns.

Economics is not an exact science, but, thanks to Keynes’ modern acolytes, some of its rules have become clear. One is that, although deficit spending may briefly and superficially improve GDP, government cannot spend a nation to prosperity. Nor can prosperity be achieved through taxation. Keynesians have proven these rules repeatedly by violating both – and failing.

Deficit spending reduces economic output in the long run, primarily from its contribution to government debt which diverts private capital from more productive activities. Massive deficit spending diverts capital…massively.

For example, President Barack Obama presided over a huge stimulus bill allegedly designed to “prime the economic pump.” Nonetheless, unemployment remained high.

In order to preserve a sense of self-worth and dignity, the big-government Keynesians who invested careers in that exhausted economic dogma insisted that Keynes’ theories failed only because they were applied half-heartedly.

Paul Krugman, the New York Times’ Keynesian-in-residence, lamented, “The stimulus wasn’t nearly big enough to restore full employment.”

It was nonsense.

More recently, deficit spending passed by Democrat congressional majorities during the COVID years and signed by President Joe Biden, has produced an “issue” on which Democrats plan run in the 2026 midterm elections – affordability.

Their scheme is doubly ironic because 1) the most unaffordable states and cities, including U.S. News & World Report’s six most unaffordable states, are Democrat strongholds. Nine of the ten most expensive cities are big cities in blue states.” In fact, Bureau of Labor Statistics’ year-over-year consumer price index data through November 2025 finds inflation averaging 2.5 percent in conservative-led states versus 3 percent in states run by Democrats.

And, 2) Biden’s COVID-era American Rescue Plan, a $1.9 trillion “stimulus” bill, not only stimulated deficit spending, but printing the unsecured “money” necessary to fund it devalued our currency and produced an inflationary effect by forcing consumers to spend more dollars on the same goods and services.

Predictably, Democrats are blaming high prices on President Donald Trump and Republicans. As usual, they’re relying on allies in national media to sell their fiction.

However, not all media have signed on. Market economists at CNBC tell a different story, and reach a conclusion that is out of phase with Democrat talking points. CNBC’s parent, NBC, does not favor Republicans or President Trump.

Recently, CNBC host Joe Kernan and former Securities and Exchange Commission Chairman Jay Clayton discussed the affordability issue.

Kernen concluded, “The affordability issue is from the [cumulative] 22 percent increase in prices – in inflation – under [President Joe] Biden – full stop – that’s the affordability issue.” And Mr. Clayton said, “[President Trump was] thrown, what I would say, the worst economy for the average American in my adult lifetime.”

Clayton expressed confidence that Mr. Trump and his economic team, led by Treasury Secretary Scott Bessent, fully grasp the magnitude of the problem they inherited, and are addressing it.

While some prices remain high, inflation is down two-thirds from Biden’s year-over-year high. Gas prices are the lowest in years; the Biden administration’s costly “green” energy edicts are being dismantled; and an axe has been taken to the Biden administration’s regulatory regimen that, along with massive deficit spending and dollar devaluation, slowed economic growth, increased the prices of goods and services, and made everyday life unaffordable for millions of Americans.

The Democrats’ “affordability” finger-pointing is designed to avoid electoral accountability for causing the problem.

For them, too much spending is never enough. Democrats even shut down the government in October over their ultimately-unsatisfied demand to add an additional $1.3 trillion to the national debt.

If you think you’re broke now, you won’t like what putting Washington Democrats back in charge does to “affordability.”

https://www.pottsmerc.com/2026/01/18/jerry-shenk-the-democrats-affordability-scheme/