The Price Con

The Washington Times

Assume you decided to build a new home and contracted with a builder to construct it for $300,000. Several months later, after the basement is finished, the builder comes back and says, "I underestimated my costs, and the house will now cost $900,000." Would you pay the additional amount?

Assume you ordered a new car from a dealer for an agreed upon $20,000 price. Two weeks later, the dealer calls and says the car will now cost $60,000. Would you pay more?

In both the above cases, you would refuse to pay the additional amount, because in the real world of competitive private sellers and buyers, such behavior by a seller would be unacceptable. However, what we find unacceptable behavior in our private dealings becomes the norm when dealing with government.

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Richard Rahn

Richard W. Rahn is an economist, syndicated columnist, and entrepreneur. He was a senior fellow of the Discovery Institute. Currently, he is Chairman of Improbable Success Productions and the Institute for Global Economic Growth. He was the Vice President and Chief Economist of the United States Chamber of Commerce during the Reagan Administration and remains a staunch advocate of supply-side economics, small government, and classical liberalism.