America Doesn’t Have an Affordability Problem. We Have Low Job Growth and High Debt Problems.

Right now, the labor market is VERY SLOW, as Americans and their government are spiraling into a debt death trap.

Got a balloon nearby? If so, inflate it. If not, pretend to inflate it. Now, tell me how you can get the air out of the balloon without popping it. Oh, you say, I’ll just deflate the balloon by letting air out. Works for balloons; not for economies. After Joe Biden’s runaway inflation, prices are where they are. The only way to bring prices down is via deflation, which is very bad for an economy. The fundamental problem of inflation is it pushes prices up on many goods and services permanently unless the economy goes through a deflationary period. God knows, we don’t want Donald Trump to go full-on Richard Nixon by instituting price controls. That would make things worse.

Here are a few realities:

(1) Healthcare is not affordable. It wasn’t affordable before enacting the Affordable Care Act (ACA a.k.a Obamacare). And, it won’t be affordable in the future unless Congress and Trump once and for all repeal Obamacare and replace it with a healthcare system that is more oriented to people’s actual health and rewards/punishes people for making healthcare decisions. As I wrote recently, my healthcare costs have jumped over 80% in three years despite my good health;

(2) Gasoline prices are down since Trump took office, which is a major headache for most Americans. With more exploration, drilling, and production of oil and natural gas, price should continue to decline (that is supply versus demand at work);

(3) Per news reports, Thanksgiving dinner in 2025 will costs less than in did in 2024. That means food prices—not all food prices, but many—are no longer being driven up by accelerating inflation;

(4) Until the Federal Reserve reduces interest rates more, home mortgages and corporate borrowing on capital expenditures (CapEx) will be muted. Home interest rates remain north of 6.0%, which means fewer Americans can afford to buy a home and those in homes can’t afford to upgrade. That retards the housing market. Companies looking to expand their businesses via CapEX can only do so if the cost of borrowing is lower than the expected profitability of expansion. Our currently high interest rates are depressing corporate borrowing; and

(5) Trump has announced a lot of deals with companies and countries with promises to invest in America via either expansions or buying more goods. Trump needs to demand those entities show him the money NOW!! They all know he is on a ticking clock that expires at noon on January 20, 2029. They can slow-roll him—as China did in 2020—without consequence. For trade deals cut, they could await the U.S. Supreme Court decision on the constitutionality of his tariffs given the apparent hostility a majority of justices seem to have had during oral arguments.

The punchline is that Trump has little control over the things that aren’t affordable today. He needs Congress and the Federal Reserve to act.

For perspective on consumer prices, look at the table above. Here are a few things to note:

(1) From January 2009 to January 2017 (Barack Obama’s presidency), the consumer price average only increased by a solid 31.69 points over those eight years;

(2) From January 2017 to January 2021 (Trump I), the consumer price average only went up by a very respectable 19.02 points, which included price issues impacted by the pandemic;

(3) From January 2021 to January 2025 (Biden), the consumer price average skyrocketed by a giant 56.45 points!!! THAT IS WHAT HAS KILLED AMERICANS BECAUSE ECONOMICALLY IN TERMS OF PRICE WHAT GOES UP VIA INFLATION RARELY COMES DOWN; and

(4) So far in Trump II, the consumer price average is only up about five points, which puts Trump II on pace to match Trump I.

Historically, the only way other than deflation to get past inflated prices is to supercharge the labor market so competition for workers goes up, which drives wages and benefits up. Trump did that during his first term when job and wage growth outpaced inflation. That growth is why Trump nearly won the 2020 election despite all of the things the Left and its media sycophants did to rig the election. With higher wages, Americans will get back ahead of the Biden inflated prices of goods and services.

Right now, the labor market is VERY SLOW. Based on 2025 data through August, we’ve only added roughly 490,000 jobs. That just won’t cut it in a country of 330 million Americans. It certainly won’t lead to competition and the wage increases needed to catch up with Biden’s inflation. In comparison, during the same stretch in Trump I in 2017, the labor market added 1,291,000 jobs, or more than 2.5 times more jobs. Before the pandemic shutdown America in March 2020, the Trump I economy had added 6,664,000 jobs. From January 2017 to the midterm election in November 2018, the Trump I economy added 3,989,000 jobs, which helped Republicans stem midterm losses that year (lost U.S. House seats, but gained U.S. Senate seats). In just twelve months, the Trump II economy needs to add 3,500,000 jobs to match Trump I’s record before voters decide to keep control of Washington, D.C., in Republicans hands or give Democrats congressional power again. That is a steep hill to climb.

Now for the part where I pee in everyone’s punch bowl. Politicians won’t say it, but I can. An enormous problem confronting Trump II who has the best Treasury Secretary in Scott Bessent that I’ve ever seen is that America has more than ever become an instant gratification society. Not only do they want action immediately, they want results immediately. Even worse, their desire for more and better has resulted in Americans being more in debt personally than at any point in American history. The total debt on student loans, credit cards, auto loans, and other personal debt is HIGHER THAN EVER BEFORE at $5.09 TRILLION. When you add home mortgages of $13.49 TRILLION, the total debt balance of Americans stands at an earth shattering $18.58 TRILLION. That is an enormous figure to pay off, with some of that debt being absurdly bad car loans (as in loans covering the current car being driven and one or two cars already traded back) and sky-high credit card interest rates. I suspect what Americans are referring to as “affordability” issues really means they are over-leveraged financially, so need more money or lower interest rates. That is what the data actually says. Again, if the Federal Reserve would lower interest rates, many Americans would find relief in refinancing their debts.

Let’s not even get into the $38.3 trillion federal debt that pushed interest on that debt north of $1 trillion annually this year. Americans and their government are spiraling into a debt death trap.

At the end of the day, Trump and his team can only do so much to get the economy firing on all cylinders. Americans need to be more responsible with what they acquire on credit. As you know, up until July, I drove a twenty-one-year-old car, which was replaced by a ten-year-old car. Not to be braggy, but I can afford to buy pretty much any car or truck that I want. I don’t get a new car because the one I have gets me from point A to point B really well. Most of my clothes are fairly old. I eschew Starbucks in favor of being a member of the Panera Sip Club, which costs me less than $0.40 per cup of coffee per day. And, unlike many Americans, I use coupons at the grocery store. My point is I see people every day live in houses they can barely afford because they spend too much money on fancy cars, fancy clothes, fancy trips, fancy coffee, fancy dinners, and fancy things. As I drilled into my kids, high income rarely equals high net worth because too many people focus on fancy, not frugality. Our parents and grandparents lived good, but frugal lives. They didn’t take on lots of debt and they had the ability to manage tough economic times. Americans have lost that mentality, which makes it hard for Republicans who mostly believe government dependency is bad and should be temporary and easy for Democrats who believe creating more permanent government dependency guarantees them electoral job security.

Agricultural Secretary Brooke Rollins recently stated that there is an enormous level of fraud in the SNAP program, so she will require all recipients to reapply in order to verify that recipients are eligible and not double or triple dipping. Hopefully, Rollins work is successful. The more we can wean Americans from their dependency on government benefits (did the DOGE work result in any REAL impact on fraudulent entitlement figures???), the more likely they will reenter the job market to increase the competition for jobs should the economy start to get going. We’ve done this pruning of government dependency before (see 1996 welfare reform). We can do it again.

Let me end by dragging out my old friend, Scottish philosopher Alexander Tytler, who is attributed with making this statement about where I think America finds itself:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.

As my kids colloquially say, he isn’t wrong. Is he?