The Cost-of-Living Crisis (2019 to 2025)
If 2019 was the last normal year in America, then any honest discussion of today's economy must begin with inflation.
According to the Consumer Price Index (CPI), inflation was modest before the pandemic. The inflation rate was 1.8 percent in 2019 and 1.2 percent in 2020.
Inflation then surged to about 4.7% in 2021 and 8.0% in 2022, which was fastest pace in four decades.
Although inflation slowed to around 4.1% in 2023 to roughly 2.6% by 2025, the damage was already done.
From December 2019 to December 2025, the Consumer Price Index rose by roughly 26% overall. The steepest increases hit costs families cannot avoid.
From 2019 to 2024, grocery prices increased by 25%, rent increased by 28% and energy prices increased by 29 %.
Housing affordability deteriorated rapidly.
In 2019, 30‑year fixed mortgage rates hovered between roughly 3.7 and 4.5%; by 2025, they were between 6 and 7%.
This jump in mortgage rates, combined with higher home prices and insurance, turned into crushing monthly payments.
Other costs surged as well.
Used car prices spiked during the pandemic and, even after some decline, are now approximately 32% higher from 2019 to 2025. In the same period, the price of new cars increased by approximately 22%.
From 2020 to 2024, childcare increased by 29%.
From February 2020 to August 2025, auto‑insurance premiums increased by 55%.
According to LendingTree, home insurance rates increased by 40.4 percent from 2019 to 2024. The hardest hit was Colorado at 76.6 percent while the least cumulative increase was Vermont at 12.2%.
From 2019 to 2024, median single‑family home prices increased by nearly 50 percent while median household income rose only about 22%.
Harvard's Joint Center for Housing Studies reports that the national median single-family home price rose to roughly five times the median household income in 2024.
After the housing bubble burst, construction collapsed from 2 million homes in 2005 to barely 500,000 in 2009.
Since 2009, the country has never produced more than 1.6 million homes per year.
AEI Housing Center estimates a nationwide shortage of about six million homes
Restoring affordability will require building roughly 1.7 million to two million homes per year. Approximately 1.3 million alone are needed just to keep pace with population growth and household formation and the rest will reduce the shortage annually.
Even before the pandemic, the United States was paying much more for education than almost any other country.
According to the National Center for Education Statistics, in 2019, we spent 38% more per student on elementary and secondary education than the OECD average.
We spend more on education than in almost every country.
If only more spending meant better test scores compared to the students in other advanced OECD countries.
In fact, despite decreases test scores in all three subjects, the U.S. moved up in the global PISA rankings between 2018 and 2022.
In 2022, we were 26th in math, tenth in science, and sixth in reading out of 81 countries.
In the 2021-22 school year, the United States government spent $1.64 trillion dollars on education when you combine federal, state, and local.
In higher education, we spent twice the OECD average per student.
With $1.77 trillion in student loan debt, America can no longer afford degrees that don't lead to jobs.
Even before 2019, the United States spent more on healthcare than any other country. Healthcare remains the largest and most troubling cost driver.
In 2024, the United States spent 17.2% of its GDP on healthcare, which is more than any other OECD country.
The average among OECD countries was only 9.3%.
There were some valid reasons for this gap: America's higher obesity rates, a fee-for-service system, and heavy end-of-life spending all contribute to this gap.
Roughly one-quarter of Medicare spending occurs in patients' final year of life, compared to just 18 percent of private insurance spending.
The bottom line was clear: we paid more and got less.
The costs are projected to keep climbing.
Other countries cover everyone, have healthier populations, and spend less.
That should trouble us.
Obesity alone is a massive and preventable drain.
Research estimates obesity-related medical costs at roughly $260 billion (based on 2016 data). Instead of focusing resources on breakthrough cures, we spend staggering sums managing preventable disease.
Instead of a public option or "Medicare for All," the country needs a Facebook option: large, competitive insurance exchanges that replace the employer-based model, give consumers real choice, and use price transparency to drive costs down through scale.
Congress should amend the McCarran-Ferguson Act of 1945 to allow Americans to purchase health insurance across state lines.
State-based insurance regulation has fragmented the market, limited competition, and strengthened regional monopolies.
A national market would expand consumer choice, increase competition, and give Americans access to lower-cost plans.
If wages are ever to outpace prices again, the answer is cost control rooted in competition, incentives, and outcomes.
This is especially true in healthcare, education, and insurance where America spends the most and too often gets the least.
Robert Zapesochny is a researcher and writer. His work focuses on foreign affairs, national security, and presidential history. He's been published in numerous outlets, including The American Spectator, The Washington Times, and The American Conservative. When not writing, he works for a N.Y. medical research company. Read more Robert Zapesochny Insider articles — Click Here Now.
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