Donald Trump’s daycare plan is nothing but more big-government

In Poor Richard's News by Mr. RightLeave a Comment

It’s true.

From Conservative Review:

In his latest economic left turn, Republican presidential candidate Donald Trump has embraced a watered-down version of one of Bernie Sanders’ policy proposals and promised a child care plan that would mandate six weeks of government-paid maternity leave while using public funds to subsidize home childcare.

While the proposal has already drawn praise from some voices on the Right, it belies that the Republican nominee is playing with some dangerous myths.

The first  is the myth that, “we need to help people” (as Trump said when he embraced a federal increase in the minimum wage). This new form of government intervention buys into the same myth that has already beset so many other vital sectors of our economy. However, as my colleague Maria Jeffrey points out, “When the federal government gets financially involved in an industry (health care, student loans, etc.) prices increase as a result of government subsidies.”

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Forget the fact that it’s not the government’s job to provide daycare (or anything else other than the common defense) for its citizens. It’s just bad policy. Subsidies make things more expensive. Daycares, like all other businesses, compete for customers. The most common and obvious way businesses compete for customers is by lowering prices. When people have more money to spend specifically on daycare, daycares raise prices. This is economics. It’s immutable. The same phenomenon happens with college tuition, healthcare prices and every other thing the government subsidizes. Here’s a section of a piece I wrote a while back on tuition:

Imagine this scenario: Let’s say you were the president of a private university. And let’s say, for simplicity’s sake, that the applicants to your university generally had about $10,000 they could spend per year on tuition. Now, you could set your tuition at $10,000. This would make sense. But what if you knew that the government was handing out tuition grants and making huge student loans easily accessible and fully guaranteed? In other words, what if you knew that the students who had $10,000 in the bank to pay for their education, could, on top of that, easily get a loan or a grant for another $10k and pay you $20,000 per year? Wouldn’t you charge $20,000? Obviously you would. Obviously.

The same thing applies to Trump’s plan. I realize he’s running as a Republican and that he’s not Hillary. But this is right out of the Democrat playbook.