Congress and the Trump Administration are considering proposals that would set U.S. drug prices equal to the prices paid in arbitrary countries, or proposals that would mandate drug price arbitration. These policies will burden the U.S. health care system with price controls, just by another name.
www.forbes.com
Those proposals aren't price controls by any name, they are proposals for how much Medicare and Medicaid pay for medicine which
influence but
do not control the market for medicinces nationwide. So yeah, nice try...but not price controls.
I understand your thought process but if gas prices go much above $5, and certainly if it gets anything close to $10, our knee jerk reactionary government will absolutely respond to the crisis with some sort of price controls, whether by name or otherwise.
The only real lever the government can exercise right now is to release oil from the Strategic Petroleum Reserve but that is for emergencies. While supplies have been released before to help with supply and prices, particularly after Hurricane Katrina, it is only a 35 day supply for the entire country and would have limited impact.
I'm not even sure price controls legal right now, and they would have secondary and tertiary effects far beyond than the short-term benefit of lowering gas prices. It would distort the economy in ways that would have long-term and adverse impacts far beyond the price you pay at the pump, that should be evident to anyone who knows anything about the last time we imposed price controls in the 70's under Nixon.
Then there is the obvious question folks who talk about price controls don't seem to have an answer for, what if the oil companies simply refuse to sell? Is the government going to force them? They might just slow down or even halt production until the price controls are lifted. While American companies are generally patriotic their bottom line is the most important thing to them, they are companies after all.
During the 1973 OPEC oil crisis were OPEC refused to sell oil to the U.S., President Nixon imposes price controls on oil.
Nixon imposed price controls in 1971, two years before the oil embargo started in 1973. The price controls were imposed because the post-war Bretton Woods system and its gold standard was causing serious strain on the dollar and our economy, with foreign currency reserves alone at surpassing the value of our entire gold reserves, not counting our domestic obligations. Coupled with the fact that post-war US oil production peaked in 1970 we were starting to have gas and oil shortages because our domestic production and limited imports were not keeping up with demand. All before the oil embargo made things worse.
I don't think anyone who lived during the '70's yearns for a return of stagflation and the economic malaise that we endured back then, not to mention the horrible fashions and disco music.
