I wonder if the prices will go up 26%.
Good bet and good call!
If The Govt. gave everybody who rents $500 in rent subsidy, in a normal market, rents would go up about $500 over whatever time the rental market required to adjust.
So, is it the tenant, or the landlord. who ends up ahead in the end? Note that the taxpayer, who might be neither tenant, nor landlord, as always, is a loser.
It's just the market finding equilibrium. What one is willing to actually give
out of pocket for something determines the price. If The Govt absorbs part of the price, demand increases, until pricing increases to match.
If, a year ago, The Govt. had sent everyone a voucher for $2.00 a roll toward as much toilet paper as they wanted to buy, would that have increased the price of toilet paper? Increased your ability to find a pack?
And, I'd bet that prices go up more than 26% in the end, because there will be a certain % of people who don't do the math, and want to buy just because they're "getting something for free". There's still derelict solar collectors on roofs from the first solar subsidies (late 70's?). What a deal those were!
Politicians actually understand this (or at least their economic advisors do). BUT, they also understand the value
to them of going on TV and telling people who don't think deeply, that they're "giving" them something! And, it can be colored "green", so much the better!
*** help us!
I AM NOT KNOCKING ANYONE TAKING ADVANTAGE OF THE HANDOUT TO GET THE STOVE THEY NEED. I've taken those handouts too. You might as well, as you're going to have to pay the inflated prices, and the tax bill too. I just wish there was some consensus against these tax-and -pork policies. It's really hard to get much of a movement when everybody's breath smells of one or another brand of pork, though. It's an old quote that the end of democracy comes when everyone uses it to feed from the trough.
Home grown energy and efficient stoves are a good thing! Handouts to stove makers, not so much. Disrupting the market, so that someone who really needs a stove can't even get one (toilet paper), also, not so much, and I'm betting that's coming.