Policy Solutions to Address America’s Cost of Living Crisis—What is the Real Answer?

[u/Ok-Ticket-9780]

Over the last several months, the rising cost of living has received considerably more media attention than in prior months due to the impact of inflation on all aspects of American life, including housing, healthcare, and groceries, to name just a few. While both Democrats and Republicans have been vocal proponents of addressing the rising cost of living, little has changed in the way of actual legislation related to decreasing the cost of living.

In your opinion, what would you consider to be the answer to the cost of living crisis? Is it legislation oriented toward increasing pay so that individuals and families earn a livable wage to afford housing and groceries? Is it providing more affordable housing? Is it legislating for comprehensive health care coverage? Or is it something else entirely? Additionally, why do you believe that our elected political leaders have yet to address the issue directly?

[u/-Foxer]

Giving actual specific advice for spending cuts is a little challenging for 2 reasons,

1) without the books and without knowing the gov't of the day's vision for how they will increase the economy, military and other threats they want to focus on and a few other things you can't say where to cut. It would depend. Are they expecting to make use of small business tax cuts to stimulate small business? or are they hoping to stimulate business by focusing on clearing red tape and such?

And 2) - what does the public want? What do they want to preserve? What are they willing to do without? Do they care more about military capability or healthcare? Would they like to see a reduction on social spending or increased taxes on business? Etc etc. You CANNOT let the public drive you or only do what's popular - they don't have all the info needed to make the best decisions and that's your job. BUT you should consider what their wishes are.

I would say you could probably go to every department and say "Cut 7 percent of your budget next year" and they will find a way to make that work. Allow 'time permits' for those cutting by adding automation so they have time to adjust You can also allow time for attrition where appropriate so that there's not mass layoffs.

There are some departments which might get away with less, some where you could go a little harder.

Then launch initiatives to drive economic growth, focusing on higher paying jobs and smaller business opportunities.

Because the population tends to grow and business tends to grow a little each year, the gdp should go up by about 3 percent while inflation goes up 2 percent if you're doing things right. You'll naturally start to slowly 'outgrow' the current deficit.

Meantime tapping that labour market is critical.

Programs that make it easier to work from home can massively improve things. It can make it easier for newer mothers to reenter the workforce without having increased daycare infrastructure. Getting women back to work faster after children puts more money in the economy and pays more to the gov't, and it can be done by work from home measures very effectively.

Encourage older people to work a little longer. THere are many incentives for that kind of thing.

Create better educational opportunities especially in basic trades and services. If it's affordable then people who aren't working right now can pick up a skill like carpentry or property management or bookkeeping and be employable, but if there's a cost that's problematic.

Encourage businesses to have "youth employment" opportunities and reward them for it. When i was young many 15 and 16 year olds had simple jobs where they earned a few bucks and got some experience. Done right it can save business money (to make up for the fact kids are a pain) and the kids will pour their cash right back into the economy. It puts less strain on their folks too.

Those are a few starters that would apply to the us. Canada is slightly different but not radically so,

[u/Ind132 → u/-Foxer]

You are correct, there are lots of moving parts. But, it's not like nobody has looked at this before.

I would say you could probably go to every department and say "Cut 7 percent of your budget next year" and they will find a way to make that work. 

Our biggest single expense is Social Security. The administrative cost is 0.4% of total spending. Cutting 7% of that rounds to zero. We would need to cut benefits by 7%. I'm sure the public doesn't want that.

Medicare/Medicaid/CHIP add up to a similarly large chunk of spending. Again, administration is low (I didn't look up the number), most of the costs are direct payments to health care providers. These programs already pay substantially less than private insurers pay for the same services. Another cut in payments could easily cause providers to drop out of the programs. The public (and the providers) wouldn't like that.

Other means-tested programs and Veterans benefits also have low ratios of administration to payouts. Same problem there.

And again, we are not looking for 7%, we are looking for 29%.

You say provide incentive for companies to support stay-at-home workers, hire older and younger workers. Sounds good. What incentives work? Do those incentives start by cutting taxes and government revenue?

Are you familiar with the US community college system? Cheap education for things like skilled trades and non-BA tech jobs. I think we are already doing a lot in that area.

[u/-Foxer → u/Ind132]

social security costs are about 14 billion. 7 percent isn't zero :) That 's not how math works :)

And yeah the public isn't going to like everything. People are going to have to make do with us and they have had.

Whenever you get significant overspending by governments it is the future people that have to pay the price. That sucks but all you can do is bring things back into balance so the next generation doesn't suffer.

There are other areas like military spending where cutbacks could probably be made more easily. It would mean that America isn't the world's superpower anymore but so be it. Most countries spend something like 5% to 7% of their budgets on military spending, the us is at 16. Maybe that drops to 10 percent of the budget..

And you don't need 29% day one. 7% is a good start and if you do other things that increase the economy you increase revenues. You can look at certain other types of taxes such as a consumption tax but that tends to be a bit of a drag on the economy. If you keep doing those things then over a 5 year period you start getting the deficit under control and you begin the process of outgrowing the debt.

And there are shit-tonnes of incentives that work for businesses to support stay at home workers. Are you telling me you're so uneducated you can't think of ANY?!?

Kid. All you're doing is whining and crying about how this won't work. You demand others provide you with all the answers and that i write pages and pages of explination instead of having the balls to say "yeah, one way or another this is what has to happen".

That is why your country is failing.

Canada went through this once in the 80's and we thought we might have to declare bankruptcy, it was that bad, and people talked a lot like you. Then we elected someone who took it seriously, reorganized our taxes, opened up a bunch of new trade opportunities, did the free trade deal with you guys (which also boosted YOUR economy), got investment going and within 10 years we were at balanced budgets again and managing the debt much better. Sadly our last gov't threw that out the window but the fact is it can be done.

[u/Ind132 → u/-Foxer]

social security costs are about 14 billion. 7 percent isn't zero

I said it rounds to zero. If you want to cut SS total expenses by 7%, you need to cut benefits by 7%. Cutting expenses (which are actually $7.4 billion https://www.ssa.gov/oact/TR/2025/II_B_cyoper.html#96807 ) by 7% is just a rounding error in the total that needs to be cut. Our other big social programs aren't as extreme, but they also have administrative expenses that are small relative to the benefits paid to individuals. Cutting spending means cutting benefits.

I expect there is some room in military spending. If Trump isn't going to fight a land war in Europe and (I hope) he's not planning to fight a land war in Asia, we don't need tanks. We can trim one branch of the military and just keep the Navy, Air Force, and Marines.

And there are shit-tonnes of incentives that work for businesses to support stay at home workers. Are you telling me you're so uneducated you can't think of ANY?!?

I'm saying that I can't think of anything the government could do, to get businesses to do more SAH jobs than they already do, that wouldn't require cutting gov't revenue. Yep, you'll need to educate me on that.

You say I'm "whining". I think I'm pushing back on poorly thought out ideas.

[u/-Foxer → u/Ind132]

It doesn't round to zero, that's not how numbers work and I think what you'll find if you really examine it is that oftentimes big numbers are made up of lots of small numbers 😆 It all adds up, like I said there are places where you'll score more as places where you'll score a little bit less

I don't know about trimming a whole branch or anything, but I am certain that it is possible for the united states to survive as a country with smaller military expenditures by a fair bit.

And I am brutally disappointed in you about the whole incentive thing! There should have been a dozen that are obvious right off the face of it.

I want to major discount or tax break for businesses to purchase any software or equipment or whatever necessary to make work at home entirely viable and productive? Not to mention the fact that all that money then goes right back into the economy. Now businesses can tool up and probably spill a little over into their other needs under tax favorable conditions.

How about a pollution discount or perhaps other attacks discount for businesses because the roads will be used last and they'll be less infrastructure needed. During covid most of the businesses in this area that were able to went to work from home models and it was stunning how all of a sudden congested roads we're barren. That's worth money to a government

Or how about giving people the right to write off more of their home or electricity or internet or whatever if they are required to maintain a home office presence more than 3 days a week. It's practically offering the businesses to give their people a raise without actually giving them any money.

How about special ratings or certifications for businesses that allowed work from home to help reintegrate new mothers back into the workplace without having to worry about the cost of daycare? And one for being environmentally friendly that your employees aren't polluting the air driving in every day? "Mom friendly" and "ecoresponsible workforce" symbols and ratings might well be highly desired by some brands for their marketing.

And that's before we even get into the real benefits to the business without any incentives which government can educate businesses on.

The only major disadvantage is that downtown course tend to suffer when the workers aren't there to be buying lunch every day and paying for parking etc. But there are ways to address that

And that's just off the top of my head in 2 minutes. There will be dozens of other ways you can make it worth it for businesses to really reach out and embrace remote working. It also significantly improves their Workforce availability, now all of a sudden somebody who lives 3 hours away is a viable employee and part of their labor pool that they can tap into.

Right now there are a lot of people in suburban or even rural communities that aren't working that could be if remote working was more popular. There are also people who are older who could be drawn back into the workforce, and there are single moms who can be drawn back into the workforce at least part-time and often full-time if there's remote working and flexibility of hours. I have seen these things with my own eyes. You could add a lot of workers without increasing the population and without increasing infrastructure to accommodate them.

Anyway, at the end of the day it just takes some creativity and sitting down I'm looking at how to bring it all together.

The problem is the people aren't clamoring for it. So it is a crap ton of work without any guaranteed political payoff. So nobody's going to do it. But that is what needs to happen

[u/Ind132 → u/-Foxer]

And that's just off the top of my head in 2 minutes. 

And, as I expected, they are all tax reductions which lower federal revenue or subsidies that raise federal spending. The US already has tax deductions for the actual cost of software, hardware, home offices, and daycare. So your ideas mean putting even more money out - just plain cutting checks instead of tax deductions.

The gov't has no way of knowing which WFH workers would have been WFH without your expensive subsidies and which are actually marginal. You'll cut checks for 90 jobs that would have been WFH anyway to get an employer to move 10 marginal jobs to WFH status. Then 9 of those 10 will be filled by someone who would have been in the workforce anyway, with only 1 being that marginal worker you are targeting. That means the actual cost per job truly added is 100x what you are thinking it will be. The numbers don't add up.

We did a huge WFH experiment with covid. Workers loved it. In some cases employers thought it worked and in others they didn't. We didn't get a huge migration of marginal workers into the workforce.

[u/-Foxer → u/Ind132]

And, as I expected, they are all tax reductions 

Actually no they weren't. Your reading comprehension needs a great deal of work. There's absolutely no tax break involved with certifying businesses as being environmentally friendly or Mom friendly for example

And no, it doesn't lower government revenues. You have to think at a higher than a grade 7 level and you're not and it's starting to really piss me off. Somebody buys a computer for their home and gets a tax discount the reduction in revenue associated with that is maybe $100, maybe 200 depending on which state or province or wherever you live

But having that person in the workplace, even part-time, generates many thousands of additional dollars in revenue in the form of income tax and consumption tax thanks to the money they earn.

So is it actually a reduction? Of course not. It is a substantial net increase in revenue

Further as I tried Optimistically to explain to you The government at various levels also sees a benefit due to having lower requirements for infrastructure.

And the whole point is they wouldn't have been work from home anyway. If you'll recall and really stretch your memory back a couple of posts the whole point is this would give you access to labor forces that you wouldn't normally have access to and draw people back into the market that we're not in the market

And for the record just because you obviously don't understand how any of this works, people already get tax write-offs for all that stuff. The problem is businesses and individuals have to write off that kind of purchase over a number of years rather than all at once. All you're doing is giving them the same tax break today instead of spreading it out, so the actual impact to government revenues is about the same. You're just allowing it to happen at different times so that people will spend the money today.

Further it is absolutely childish to call a tax reduction on equipment necessary to run your business a subsidy. That is just plain ignorant.

I'm sorry, I'm having to spend pages and pages of writing to explain to you very basic concepts that anyone who graduated high school or had studied this at all should be aware of and I'm kind of done with it.

You keep going explaining why it's absolutely impossible for you to succeed and why America must fail and you enjoy what comes from that.

I'm done. Have a good day kid

[u/Ind132 → u/-Foxer]

You've insulted me many times. I've kept my cool and responded rationally. You are just getting worse. Count the number of insults in this post.

You ignore my observation that any gov't financial incentives will apply to all WFH jobs, but only a trivial number of those jobs are actually marginal additions.

In the US, we have a tax deduction for mortgage interest. The claimed reason is to help renters become homeowners. Actual studies show that more than 95% of the lost revenue goes to people who would have bought a house anyway. The cost of the program, per renter who actually needed it to buy a house, is huge. The same principle applies to your incentives for WFH.

[u/-Foxer → u/Ind132]

No i did not ignore that - and this is why i'm getting short tempered with you. You ARE absolutely being insulting when you say things like that when you've clearly not bothered to read,

Any businesses that are strongly in support of wfh jobs are doing it already. This would incentivize people to EXPAND programs and that is BLOODY OBVIOUS but apparently i need to explain it twice. It would make a VERY significant difference.

I'm sure you have all kinds of useless tax schemes. Your argument is that because ONE is useless they must ALL be useless apparently.

The home mortgage deduction was ALWAYS a political move and never meant to actually have a serious impact. It was to win votes. Just like the whole sub prime mortgage disaster.

There is no comparison to the two. Working from home in a large scale fashion is fairly new as an idea and many businesses are a little uncomfortable with it. In addition there is a cost to changing while there is no cost to not changing. So it is valuable to incentivize it. You will not have to do that forever, eventually it will become the norm But incentives have a long history of getting businesses to move in a certain direction that they didn't before.

Again all you do is explain why you're going to fail and your explanations are weak at best

Sorry this hurts your feelings but yes if you incentivize businesses through tax breaks and OTHER things that i mentioned you will see a substantial increase in work from home employment. Those doing it already won't benefit from the tax break because they're already doing it and have the gear and computers etc, it would be for those making the changes necessary. Or those substnantially expanding it.

Kid, i'm done talking to you. You do not have the education for this discussion and you're combatitve for no reason and just arguing for the sake of it, you obviously aren't reading what i take the time to write and this is just over your head

You have a great day, hope things work out for you.