Government Is Here to Help

If by help it means "make itself indispensable."


Government wants you to think it helps you at every turn. Every time you make a decision, a purchase, government wants to be there, looking essential.

But it's a trick. Most government "help" creates new problems.

Students once went to private banks to get college loans. Banks, since they had their own money on the line, tried to lend only to students who were likely to succeed and then pay them back. Politicians then said, "Banks don't lend enough, so we'll guarantee loans or make loans ourselves! After all, college is essential for success."

Colleges responded by raising tuition at seven times the rate of inflation. It's a spiral in which taxpayers are forced to give money to colleges—which then charge high tuition, so students graduate deep in debt, and then politicians demand that taxpayers forgive that debt.

President Obama said, sure, just pay back 10 percent or, after 20 years, nothing! Taxpayers will pay the rest, which goes to schools that employ professors who demand more government programs. It's a spiral that makes government bigger.

The same thing happened with housing. People once borrowed from private banks, which applied market discipline. If they thought you wanted to borrow more than you would likely repay, banks wouldn't lend you the money.

But now government—Fannie Mae, Freddie Mac and the Federal Housing Administration—guarantee nearly every loan. That helped create the last housing bubble. After it burst, and taxpayers were charged nearly $2 billion to bail out the FHA, the politicians assured the public they would fix this to make sure it never happened again.

But they didn't. Today, once again, more than 90 percent of home loans are backed by taxpayers, and after briefly raising down-payment requirements, the FHA will again make loans to people who make down payments of as little as 3 percent.

A sensible solution would be to get government out of the home loan business, but even Republicans claim government support for homebuilding is needed. It isn't. Canada has no Fannie, Freddie or FHA, and no housing bubble. In Canada, lenders and homeowners risk their own money, yet just as many people are able to buy homes.

Finally, Obamacare makes the same arrogant assumption about healthcare: Without government, people can't afford health care and won't make good decisions. But healthcare is bureaucratic and costly because of government.

For decades, government encouraged us to pay for health care—even routine procedures—with insurance. But insurance is designed for large, rare expenditures, like your house catching fire or a heart attack.

When everything from head colds to backaches is paid for through insurance, neither the customer nor service provider pays much attention to what anything costs. I'm on Medicare now. I'm amazed that when I go to a doctor, no one even mentions price.

If we paid for everything that way—clothing, groceries, computers—everything would cost much more. No one would know when to shop around, when they were getting a great deal, or when to say: enough.

The more we enshrine the idea that "everyone must have health insurance," the more big insurance companies can raise prices without worrying about customers fleeing. Forced government insurance steers everyone into a few big plans instead of letting individuals make decisions that foster competition. Hospitals and insurance companies are the ones really being helped.

President Eisenhower addressed a similar problem when he complained about a "military-industrial complex." Today we have a broader "government-industrial complex."

It shouldn't surprise us when big companies start out opposing regulation but then announce that they wholeheartedly support government's latest "reform."

By the time legislation is passed, the major players in the industry have had a role in writing the laws, ensuring that they are guaranteed a profit.

I don't think government makes my life easier by being around me all the time. Instead, it makes it harder and harder to imagine life without government. Perhaps that was their goal.


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    1. “Every time you make a decision, a purchase, [s]government[/s] an internet spammer wants to be there, looking essential.”

      1. Good you see the resemblance.

    2. Government is the problem! They are overpaid and love to micromanage other peoples lives.

    3. * sound of round being chambered *

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    1. Hhello, this is Raj Depaak, hhow mei I hylp yeu?

  3. I’ve said it before, and I’ll say it again – fascists don’t have to wear comic-opera uniforms and jackboots.

    Call it National Socialism without the anti-semitic elements

  4. I’m Jarvan.

    I’m helping.

  5. “I don’t think government makes my life easier by being around me all the time. Instead, it makes it harder and harder to imagine life without government. Perhaps that was their goal”


    I’m reminded of a line from Pirsig’s “Zen and the Art of Motorcycle Maintenance” when he says there’s no truth or altruism in government, schools, institutions, etc. because their only purpose is self perpetuation. (I’m paraphrasing here, I don’t have copy of it handy)

    1. Licensure is one of these particular goofs. You need a license to own a specific breed of animal; You need a license to drive; You need a license to exercise your second amendment right; You need a license to practice law, medicine, therapy, accounting, investing, and banking; You need a license to own certain brands of chemicals; You need a license for your driving license to drive large commercial vehicles; You need a special license for your second amendment license to have a gun on your person, concealed to preserve the element of surprise; You need a license to bring fruit from Mexico into the US…

      And for all of this licensure, we need people to staff offices to follow up and “audit” these “authorizations” to insure that arbitrary limitation periods, continuing education, and compliance is had. Talk about NECESSARY JOBS…

  6. If the government insisted that the people buy food insurance and then insisted that insurance cover every eating expense you’d soon have to be rich to buy a pack of bologna without government or insurance helping you out. Right now, thanks to government, a total shutdown of the government would actually result in a huge segment of the population dying of starvation in just a few weeks. Just 50 years ago a government shutdown could have been shrugged off by most of America, 100 years ago most Americans wouldn’t even have noticed that the government had shut down, today it would actually mean life or death for most Americans. Welcome to Euro-America!

  7. Government is bullshit! The worst government offenders are the: politicians, judges, police, prosecutors, tax collectors, and all other regulatory agents.

  8. The Illinois Department of Financial & Professional Regulation is nothing but a monopolist mob controlled group that creates jobs and careers for the mob. Eliminate the licensing requirements and allow the poor people to start businesses and occupations. Why should someone have to spend 7 years studying and get a medical degree and license just to help deliver a baby, a natural act?

    1. Right now, they have an investigation going on, for my dad. In the end, I do not expect anything out of it. Worry about the “death panels”! They have developed into part of the health care system! The insurance companies might help one along to the “other side”, if they think they might save a buck!

  9. Re “I’m from the government and I’m here to help”, the phrasing has a nice ring. Interestingly, a question remains in my mind, the minds of others too, that question being as follows. To help who, the citizenry or itself,at the expense of the citizenry.

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  11. The problem is how do you get the government out of a market once it has intervened. Unfortunately, the only safe way to get the government out of a market intervention is slowly – with the knowledge that somebody is still likely to get hurt.

    The simple fact is the low down payments brought more buyers into the market, driving up prices. If you remove those buyers from the housing market, you get a correction – and a fairly ugly one at that. If the value of housing drops sufficiently, the default rate would probably go up. A minor uptick on the default rate, given the discount associated with foreclosure sales, etc., is probably enough at this point to bankruptcy Freddie Mac, Fannie Mae and the other folks backstopping such loans (read many monoline insurers) – especially as there is only a very thin equity cushion associated with them. Lending, under those circumstances, would likely come to a screeching halt, exacerbating the crash in prices and taking out certain banks and/or mortgage loan originator organizations.

    1. (continued)
      When the banks start collapsing, there is a general problem with obtaining credit – and, I’m sorry, but the FDIC (like FSLIC before it) is also likely to be rendered insolvent (or rather, its existing insolvency would become apparent) if all the banks which needed to be taken down were actually taken down.

      The collapse also takes down the house building industry, severely hurts the home renovation industry, temporarily hits all levels of government which depend on property taxes (especially if they cannot readjust the rates to recapture the lost funds), and may trap certain homeowners who would then be unable to refinance their existing loans. Foreclosures/vacancies also create certain externalities on near-by properties, resulting in neighborhoods getting essentially destroyed (see Detroit and some of subdivisions near Las Vegas).

      The sad thing is we’ve seen this script before. It happened in the South central/Southwest of this country in connection with the S&L crisis. It happened with the implosion of the subprime lending markets after the Russian default. As the article notes, it is likely to happen again as the bubble reflates. And each time, it somehow comes as a complete surprise to the government and financial industry. 🙁

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