I think all things, that increase happiness should be reduced in effect.
Also all things, that decrease happiness should be increased in effect.
Currently there is way too many things, that improve happiness, meaning that with lots of policies you always win, even if you have debt crisis, hyperinflation and more bad situations.
It could be done to policies mostly - too many policies make voters happier at low to no cost.
Maybe is it intentional, so you can simply not subsidize private education/healthcare, and not have public version of those too?
its not intentional and does sound like a proper balance issue. Perhaps the default state of affairs without any policies should cause more unhappiness. So stuff like inequality etc should perhaps make people more unhappy (but can be mitigated by anti-inequality policies).