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Cost Disease Socialism
Report

Cost Disease Socialism

How Subsidizing Costs While Restricting Supply Drives America’s Fiscal Imbalance

Steven M. Teles, Samuel Hammond and Daniel Takash
Niskanen Center, 2021
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Editorial Rating

7

Qualities

  • Analytical
  • Concrete Examples
  • For Experts

Recommendation

Researchers Steven M. Teles, Samuel Hammond and Daniel Takash examine America’s fiscal health from the perspective of “cost disease socialism.” They posit that government spending on core necessities like health care, education and housing in supply-restricted markets creates an unsustainable upward spiral in costs without any offsetting economic growth. They suggest that focusing instead on stimulating the supply of these goods and services will lead to long-run prosperity and viable state finances. Executives and concerned citizens will find this a thought-provoking commentary.

Take-Aways

  • Bringing essential services onto public budgets fuels unsustainable costs and debt.
  • Labor-intensive work underlies “cost disease.”
  • Regulatory fixes – alterations to incentives, cost structures and supply constraints – can solve the fiscal problem of cost disease.

About the Authors

Steven M. Teles is a professor at Johns Hopkins University and a senior fellow at the Niskanen Center, where Samuel Hammond is the director of poverty and welfare policy, and Daniel Takash is a regulatory policy fellow.

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