The Real Reason Prices Are Staying High
Peter Reagan

Washington’s favorite habit is the “temporary” fix – extend a subsidy here, push off a deadline there, and borrow the money to make it work. But those short-term patches carry long-term costs. They raise prices for families and deepen the national debt. Here’s how that affects your purchasing power… 

Washington, D.C. has a habit it just can’t quit. Every year or two, no matter who’s in charge, policymakers reach for the same quick hit: a “temporary” extension, a “bridge” program, a “one-time” emergency fix that somehow becomes a recurring expense.

It’s a cycle as predictable as it is expensive – and the bill always lands on the same doorstep: yours and mine.

If you’ve ever had a loved one with an addiction, you know the pattern. I’ve worked around this space for long enough to know it’s not a perfect match. But if you squint a little, it’s hard not to see the parallels. 

There’s the short-term gratification. 

There’s the denial. 

There’s the promise to do better next time.

And there’s the ever-growing bill that someone else has to pay.

Lately, one example in particular has been bothering me.

The Obamacare subsidy cliff – and the latest “temporary” fix

As part of the 2017 tax law, Obamacare tax subsidies are set to expire at the end of 2025.

If nothing changes, millions of households – especially those approaching retirement – could see health insurance costs rise again. For families already feeling squeezed by medical expenses that tend to grow with age, that’s a frightening prospect.

Politically, letting those subsidies lapse would be risky. So it wasn’t surprising to see the idea of a two-year extension floated recently. In the short term, it spares households from immediate sticker shock. In the long term, it spares Washington from voter anger.

But here’s the catch: according to projections from the non-partisan Citizens for a Responsible Federal Government, just two years of continuing these subsidies would cost the federal government roughly $50 billion.

And if history is any guide, those two years won’t be the end of it.

Washington rarely allows “temporary” programs to end. Congress has a habit of labeling major policies as “temporary” even when everyone involved expects them to be extended.

A good example is the Tax Cuts and Jobs Act of 2017, one of President Trump’s signature pieces of legislation during his first term. These tax cuts were written to expire in 2025 – not because anyone believed voters would happily accept higher taxes. Rather, because calling them temporary allowed Congress to present a smaller upfront price tag. 

See, Congressional legislation is “scored” by the Congressional Budget Office (CBO), which must estimate a bill’s 10-year costs. If a program is labeled “temporary,” then the CBO can only count the years it’s intended to be in effect. 

A “temporary” two-year program looks five times cheaper than a 10-year program – even though it’s almost guaranteed to cost the same, due to extension after extension. 

These budget rules effectively reward the illusion of a short-term program. And this happens over and over. Consider:

COVID-era relief programs: Many were passed as emergency measures, set to sunset after a year, and then extended repeatedly because no one wanted to take away support abruptly.

“One-year” fixes in Medicare and provider payments: Congress regularly implements short-term patches to avoid abrupt changes in healthcare reimbursement formulas – but the patches keep getting renewed, often for decades.

Congress uses politically convenient deadlines, and the “temporary” label, as a Trojan horse. They let pressure build as the deadline approaches, and then almost always extends the program. 

The incentives always point in the same direction: Keep spending, keep borrowing, leave the consequences to the next session. The next administration. The next generation. 

It's the same pattern we see with the debt ceiling. Lots of drama, complete with pearl-clutching and hand-wringing. Lots of brinkmanship. Sometimes, a government shutdown. 

But it all ends the same way: More spending.

This isn’t a political issue – it’s a structural problem

Let me be clear: this isn’t about singling out President Trump or Obama any particular administration. Both parties rely on short-term patches to get through the next election cycle.

Both talk about “fiscal discipline” and “spending priorities” and “what’s best for our constituents” while passing bills that add to the national debt. Sometimes, that legislation might arguably be a good idea! Regardless, the spending keeps expanding. 

This is how modern American politics works.

Voters demand relief now. Lawmakers respond with programs, extensions and subsidies – all funded with borrowed money. And when that borrowed money fuels inflation, the same voters demand another round of relief. The politicians who want to be re-elected line up to give it to them… 

Around and around we go.

The hidden cost of “just this once”

All of this has real consequences outside the Beltway.

Deficit spending isn’t just an accounting issue. It translates directly into higher prices. The math on this is no longer theoretical. As MIT Sloan’s senior lecturer Mark Kritzman explained:

“Our research shows mathematically that the overwhelming driver of that burst of inflation in 2022 was federal spending, not the supply chain.”

Their research found federal spending was two to three times more significant than any other factor behind that surge in inflation.

We all lived through that moment: Grocery bills doubling, rent spiking, homeowner’s insurance surging beyond belief, medical costs climbing, electricity prices refusing to budge. The 40-year spike in inflation finally subsided.

And while supply chains eventually healed, prices didn’t return to normal.

That’s the thing about inflation: Once the trillions in new currency are in circulation, they very rarely leave. Once businesses raise prices, they rarely reverse them. Once you give someone a handout, it’s very, very hard to take it away.

So when I see another $50 billion “temporary” extension, I don’t just see a policy debate. I see the next rung in a ladder we’ve been climbing down for decades:

Borrow. Spend. Inflate. Repeat.

And every time Washington repeats the cycle, our dollars lose a little more purchasing power. (Prices go up – not because food is suddenly rare, or because electricity got harder to generate – but because our dollars shrink.)

What this means for your long-term financial health

Most Americans think about their financial lives the way Washington thinks about legislation: “How do I get through the next year?”

I’m here to tell you that’s the same mindset that got us here in the first place. You cannot afford to focus on the year ahead – you have to raise your eyes to the horizon. 

I know, that can be a challenge in this era of TikTok and attention spans measured in fractions of a minute. Where thumbs-up or retweets are more important than thinking and discussing.

My grandparents used to say the same things in plainer language, and Marcus Aurelius did the same about 2,000 years ago:

“Time is like a river of passing events… no sooner is a thing brought to sight than it is swept by and another takes its place.”

Washington’s policies change. Subsidies come and go. Deadlines slip, programs get extended, and the cycle repeats. The only question that matters is the same one Grandpa pondered in his time, and the Founding Fathers in theirs: 

What can we use as an anchor when the river keeps moving?

What holds its value over a lifetime, across generations, even across centuries?

How can we save prudently today when the future is so uncertain?

For centuries, physical precious metals have played that role. 

They’re not a get-rich-quick scheme. They’re not a bet on politics or economic growth. They’re simply a time-tested store of wealth – one that isn’t dragged down when Congress charges another “temporary fix” to the national credit card.

And here’s the good news: You can diversify with physical precious metals in a tax-advantaged retirement account.

If you want to think beyond the next two-year extension and build your financial future on a foundation that’s meant to last, I invite you to take the next step. Request your free Precious Metals IRA info kit, and learn how to shelter your savings with assets Washington can’t devalue or inflate away.

Let’s face it: It may be too late for long-term thinking to fix our national debt.

But it can absolutely change your financial future.