The Subsidized Squeeze: How Washington Funds Your Inflation
Your shrinking paycheck isn't an accident of the business cycle. The federal government is actively subsidizing the very corporate giants that are driving up your cost of living.
The Brief
The Subsidized Squeeze: How Washington Funds Your Inflation
Source: bipartisanpolicy.org
Signed into law on July 4, 2025, the "One Big Beautiful Bill Act" (OBBB) is now projected by the Congressional Budget Office (CBO) to balloon the federal deficit by $3.4 trillion over the next decade. This massive injection of deficit-financed cash has pushed the Consumer Price Index to 4.2%, proving once again that when the state prints money to fund its pet projects, the public pays the tax through eroded purchasing power.
The pain hit home on January 1, 2026, when the expiration of enhanced health insurance subsidies forced average monthly premiums to jump from $113 to $178. Over three million Americans immediately dropped their coverage because they could no longer afford the state-mandated market.
Rather than face the music, the Department of Agriculture simply eliminated its primary food security survey in December 2025, blinding the public to the millions of families cut from nutrition assistance. To make matters worse, a Federal Reserve study reveals that 100% of excess core goods inflation since January 2025 stems directly from the administration's aggressive tariff regime.
Consumers are left footing 90% of the bill for these trade barriers, which have pushed the nation's effective tariff rate to its highest level since the Second World War.
By the numbers
- The Congressional Budget Office estimates the OBBB will increase the federal deficit by $3.4 trillion over 2025–2034.
- Average monthly health insurance premiums jumped 58% from $113 to $178 on January 1, 2026.
- Three million Americans dropped or lost ACA coverage by February 2026.
- Residential electricity bills have risen 42% nationally since 2021, driven by utility grid upgrades for AI data centers.
- The U.S. effective tariff rate has risen to nearly 10%, its highest level since the early 1940s.
- SNAP enrollment dropped by 4 million people between July 2025 and March 2026.
"The OBBB is not expected to materially reduce the federal deficit on its own." — S&P Global Sovereign Ratings Report, June 2026
This is the inevitable result of central planning: the state uses its coercive power to pick winners and losers, then hides the economic fallout by deleting the data that tracks it. When the government subsidizes massive corporate projects—like the explosive, state-backed buildout of AI data centers that has driven residential electricity bills up 42% since 2021—it forces you to underwrite corporate infrastructure through regulated utility rate hikes.
True liberty requires a transparent government and a free market, not a system where the politically connected secure subsidies while your household is taxed through the power grid, healthcare, and grocery bills.
The federal government is currently running a deficit so massive that interest payments alone consume nearly twelve percent of all federal revenue.
What happens next: S&P Global has warned it may downgrade the U.S. credit rating within two years as net federal debt is projected to surpass 100% of GDP by 2029.
Watchlist
- USMCA Trade Review — USMCA trilateral review opens today amid threats of total pact collapse.
- Algorithmic Rent Bans — California lawmakers vote on banning algorithmic rent-fixing software.
- Fed Stagflation Dilemma — The Federal Reserve faces core inflation stuck at 4.1%.
Bright Spot
Rather than allowing energy markets to price data center consumption fairly, federal lawmakers are attempting to freeze technological progress to cover up the failures of our heavily subsidized, state-regulated utility monopolies.
More headlines
- The Medicaid SqueezeEconomic
New Centers for Medicare & Medicaid Services (CMS) guidance overhauls budget neutrality rules for Medicaid Section 1115 demonstration waivers, stripping states of the ability to use "hypothetical" savings to expand coverage.
Crow's Nest Federal bureaucrats are squeezing state-level safety nets to patch their own deficit holes, ensuring that everyday patients pay the price for Washington's fiscal mismanagement.
What you can do: Contact your state's Medicaid director to demand a public disclosure of how these new federal actuarial requirements will impact local hospital pricing. - The Zoning CartelProperty
California lawmakers are advancing SB 295 to ban algorithmic pricing software like RealPage, which corporate landlords have used to coordinate and artificially inflate rents across competing properties.
Crow's Nest Banning software is a distraction from the real culprit: local governments using restrictive zoning laws to strangle housing supply and protect corporate cartels from genuine market competition.
What you can do: Attend your next local zoning board meeting to demand the repeal of restrictive zoning ordinances that prevent multifamily housing construction.
Take Action
Oppose the Medicaid Waiver Squeeze
The new CMS guidance takes effect on January 1, 2027, meaning state agencies are drafting their compliance plans right now.
Until tomorrow, stay free.