Isn't it ironic that at a time when government officials are looking to investigate rising gas prices, some of these very same officials claim that they can't live within budgets capped at the rate of inflation?
While gas prices soar, computer software and hardware prices are falling - despite inflationary monetary policies. Both of these price changes are due to market forces. The economist Ludwig von Mises noted that it is the consumer who captains the economy. Petroleum companies can no more sustain high profit margins than computer companies.
In an unhampered economy, one that exists without government interventions, high profits signal new entrepreneurs to enter that specific market. These new entrants increase supply and cause profit margins to fall.
In the hampered economy, such as exists today with regard to petroleum, government regulations hinder entry into markets. The bottom line; government interventions in the oil and gas sector are a major cause in the rise of US gas prices – other causes being the continued demand for gas despite rising price, increasing demand overseas, and the US-lead mess in the Middle East. Conversely, the ease of entry into the computer sector keeps driving computing costs ever lower.
Enough economics, now irony. Ohio government officials at all levels are crying that they cannot live within budgets capped at the rate of inflation. Why? Simple, instead of minimal budgetary increases, Ohio governments have continued to spend at a rate of expenditure growth that far exceeds the rate of inflation. Instead of investigating petroleum companies, governments should be investigating themselves.
The TEL amendment would force Ohio governments of all sizes and shapes to limit their spending increases. That government officials cannot fathom such a loose rein of growth – loose since government should be reduced from its current size and expenditure-level – shows the inefficiency of government at all levels.