Civitas Review

Government Creates Mess, Offers Itself as Solution

By | Posted in Economics, Healthcare |

We've seen it time and again. Government creates a mess, then offers itself as a solution, (using other people's money, of course).


Government creates a massively distorted, overprices (and going up) socialist patchwork of a health care system, then wants to help it out by "sharing the burden" with full-tilt single-payer socialism. Medicaid and Medicare will go over a cliff in about 15-20 years, no matter what, because the unfunded liability is massive. 45 million uninsured because they can't afford it. The crisis will be orders of magnitude bigger than what's going on today in the mortgage industry. The left celebrates the status quo while incrementally pushing us towards the precipice. Left blames greed and the market for government failure.

Mortgages & Lending:

Government creates a massively distorted, over-valuation bubble through "flexible lending standards," GSEs like Freddie and Fannie, and a tax code that encourages over-investment in real estate — all of which causes a bubble. Economists warn the government back in the late 1990s about bad risk practices–particularly the Community Reinvestment Act, then industry passes the built-in bad debt around like a bag of stink. Now we're in a meltdown. Government wants to rescue the banks after pushing them into insolvency. (See this terribly disturbing related story about Wachovia.) Left blames greed and the market for government failure.

The common thread? Government causes a Lorenz-like perturbation in the system, then the perturbation grows into a Tsunami. Government handmaidens point to government mistake and blame the market. People believe big lie. The lesson? Get government out of… well, everything.

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