Governments are mishandling the affordability crisis

Governments worldwide are struggling to address the affordability crisis, with many implementing policies that exacerbate the issue. The Economist notes that tax cuts and subsidies, often intended to help low-income households, can actually increase inequality by benefiting higher-income households more. For example, a study in the United States found that 70% of the benefits from a 2017 tax cut went to the top 20% of earners. Governments are also failing to address the root causes of affordability issues, such as housing costs and healthcare expenses. In some countries, such as the UK, housing costs have increased by over 50% in the past decade, making it difficult for low-income households to afford basic necessities. The Economist argues that governments must adopt more targeted and effective policies to address the affordability crisis, such as increasing the minimum wage, improving public transportation, and investing in affordable housing.