I have no idea who Cabot Phillips is but he made the following social media claim:
Is that true or sensationalist? Yep, but I was able to produce similar results with easily accessible data, and there is probably some data somewhere which could be found to get closer to his result.
McDonalds happy meal was $1.10 in 1979 and it’s $3 today. $1 in 1979 is worth $3.64 in 2018. 3 / (1.1*3.64) = .75, which indicates a real terms price decrease of 25% for a happy meal in 2018 compared to 1979. This is less than Cabot advertised above, but still.
BLS indicates from 1980 to 2018 college prices nominally increased 260%. The nominal increase is a bit higher from 1979 to 2018, but not the 297% discussed above. CPI increased about 120% over the same period, so college had a real price increase of about 140%.
More important than the specifics of this rando shitpost, however, is the general principal of the economic effect of government intervention in the free market. As has been discussed at length in academia, think tanks, news, and blogs including After Econ, government-produced goods and services tend to cost 3x as much as similar-quality products produced on the free market.
The mechanisms of this inefficiency are well understood and mainly attributable to elementary concepts in public choice economics and robust political economy such as rent seeking, calculation issues, and other effects.
- April 2018, Why Tax Cuts are Great Even if They Don’t Improve X
- Sep 2014, The Multiplier Defect
- Feb 2014, Comparative Government Efficiency
- Nov 2013, Was the Government Shutdown Good for the Job Market?