Sunday, May 25, 2014

Impounding–a badly misunderstood concept

Notice that:

  • if a house costs $200,000 and you make a grant of $25,000 free to everybody pretty soon that house will cost $225,000
  • if a doctors visit costs $50 and you make a grant of $5.00 free to everyone pretty soon that visit will cost $55.00

You can try to hide it behind “criteria”, “targets”, ages, genders, ethnicities – anything you like to dream up…… and worst of all votes (vote for my party and we will “fix” housing, doctors visits…. you name it by giving you “free” whatever to the value of $xxxx…..) but it will be impounded into the price.

Notice too that even if the “free” money is available to only a few then the price will still be impounded…..

World wide there are various subsidies are made so people can buy hearing aids more cheaply…. result? Costs are in the several thousands for a piece of equipment which is less complex than an iPhone at $300 – $500.

Truly there is no free lunch. Giving away lunch drives the price up.

1 comment:

  1. I guess this is just how the magic of marketing comes in. I am also not sure why this things happen but they surely does happen in an instant.