South Shore Press Video Vault: Leveling with Levy

Affordability, or the lack thereof, remains one of the biggest issues facing American families. From housing and groceries to electricity and everyday expenses, the cost of living continues to put tremendous pressure on household budgets.

I find it remarkable that the political left, which created much of the affordability crisis Americans are experiencing today, is attempting to distance itself from responsibility. Instead, Democrats are blaming President Donald Trump, citing the Iran war and his tariffs as the primary causes.

Yes, while the Iran war has temporarily driven up gasoline prices, and the tariffs have been inconsistently applied and have had a slight impact as well, we should not forget that prices were already extraordinarily high when Trump took office. That was largely the result of policies implemented under the Biden administration.

What is particularly interesting is that many young Americans now believe capitalism itself is responsible for their financial difficulties. They blame capitalism for their inability to afford rent, purchase a home or pay for groceries. In reality, I would argue that the opposite is true. The anti-capitalist, anti-free-market policies embraced by the left and the Biden administration contributed significantly to these problems.

Consider why inflation increased approximately 20% during the Biden administration. The federal government engaged in extraordinary spending, using the COVID-19 pandemic as justification for an unprecedented expansion of government expenditures.

Spending accelerated dramatically. Programs that Democrats had long sought to fund suddenly received substantial financial support under the umbrella of pandemic relief. Consequently, the federal budget increased from approximately $4.5 trillion before Biden took office to roughly $7 trillion, establishing a new level of federal spending.

Historically, extraordinary government expenditures associated with national emergencies, including World War II, eventually declined once those emergencies ended. However, federal spending increased during COVID and remained elevated afterward.

The consequences were significant. The purchasing power of the dollar declined, and inflation accelerated.

These concerns were not limited to conservative economists. Democratic economic figures, including Steve Rattner and Larry Summers, the former president of Harvard University, warned that excessive federal spending could produce substantial inflation.

Their warnings proved justified. Inflation increased approximately 20% during Biden's presidency.

The Federal Reserve subsequently raised interest rates to combat inflation. Mortgage rates climbed from approximately 2.5% during Trump's previous administration to roughly 6.5% toward the end of Biden's presidency.

Consider the financial consequences of that four-percentage-point difference. For a homeowner financing a $500,000 mortgage, the additional annual expense could approach $14,000.

These are the real-world consequences of government policies that interfere with free-market principles.

Housing affordability also illustrates the fundamental economic relationship between supply and demand. A market-oriented approach would encourage additional housing construction to increase supply and help stabilize prices.

Instead, restrictive development policies in many Democratic-controlled states and cities have made residential construction increasingly difficult. When housing supply is constrained while demand continues to grow, prices inevitably rise.

Immigration policies further complicated this imbalance. During the Biden administration, an estimated 20 million illegal immigrants entered the country, according to figures cited by critics of his border policies.

That influx increased demand for housing at a time when construction restrictions were already limiting supply. A federal study indicated that immigration-related demand accounted for approximately 20% to 30% of certain increases in rents and housing costs.

The relationship is straightforward: Greater demand combined with insufficient supply produces higher prices.

Electricity costs provide another example of how government intervention can affect affordability.

Some critics attribute today's elevated electricity rates to Trump. However, electricity costs had already increased substantially during Biden's presidency, with some estimates placing those increases as high as 60%.

Why did this happen?

Policies that restricted energy production and infrastructure development played an important role. The closure of nuclear power plants and opposition to natural gas pipelines reduced available energy supplies and contributed to higher costs.

Once again, restricting supply while demand remains strong inevitably places upward pressure on prices.

These examples demonstrate why capitalism should not be blamed for the affordability crisis. Nor should Trump bear responsibility for economic conditions that developed before he returned to office.

Certainly, the Iran war, which many consider a necessary short-term military action, has affected energy prices. Trump's tariffs have also contributed to certain cost increases.

However, neither policy created the underlying affordability problems that American families have been confronting for years.

Americans to returned control of government to the Democrats, who are promising to resolve the very affordability crisis that their policies helped create.

I remain unconvinced.

Steve Levy is a former Suffolk County Executive, former New York State Assemblyman and Executive Director of the Center for Cost Effective Government.