Government intervention is always done with the intent of helping some group of people. Typically, whatever they do is done to help the poor and down-trodden. Anyone that opposes liberal initiatives to save the world is labeled a friend of the greedy, rich corporate thieves. We've had a war on poverty that started under Franklin Roosevelt, but our inept government can't seem to bring that war to an end. The government MessAPolitico is really adept at spending our money, but inept at solving any problem as intended.
What are some places where our government has "really helped" - not? Here are some examples.
Medicare and Medicaid were created during the "Great Society" initiative of Lyndon Johnson. Have you noticed that the cost of medical care in the United States pretty much tracked with the inflation rate of the rest of the economy until the mid-1960's. What happened then? Medical costs suddenly outpaced the rest of the economy. Adding a bunch of money into any segment of the economy creates a lot of demand. When the demand goes up, prices go up. Before Medicare and Medicaid were created, poor people received their medical care on a pro bono basis. The doctors and charity hospitals provided the basic medical care needs of these poor people. With the new Medicare and Medicaid programs, the doctors and other healthcare providers had no problem charging full price for services that were once provided pro bono. After all, the money wasn't coming from the poor; it was coming from that rich guy, Uncle Sam. So the government helped us out by making the price of medical care skyrocket.
Fannie Mae and Freddie Mac took it as a mission to put more people into homes of their own. How did that work out? Well, they forced banks to relax their lending standards. The rules for qualifying for loans were relaxed, giving more people a loan. The rules requiring significant down payments were relaxed. With more and more families qualifying for a home loan and other families qualifying for bigger home loans than ever before, the demand for homes was through the roof. As with the medical care jump in demand or any industry experiencing high demand, the prices increased rapidly. We had a "perfect storm" in housing (or maybe a "perfect MessAPolitico"). The storm gave us high prices and little of no down payment for far too many homeowners. This put the banks at extremely high risk. Too many homeowners had nearly zero equity in their home; if prices dropped just a little, there wasn't enough equity to cover the loan. Of course, that happened. The economy took a downturn. Many of these new homeowners lost their jobs, so they couldn't make the payments. They had little or no "skin in the game" (equity to lose), so they just turned the keys over to the bank and moved out. The bank was stuck with a foreclosed property that wasn't worth enough to pay back the loan. In fact, home prices plummeted. Now everyone who owned a home lost money in their equity. If they were upside down on the mortgage, they couldn't sell the home and move if they found a job in another city. The homeowners either lost their homes or they were trapped in them. The goal was to get people that couldn't afford homes into a home of their own. That didn't happen in the end, and some people that had been secure in their homes lost them. The banks and other lending institutions were suddenly in seriously bad financial shape. Without the strong banks, lending was curtailed throwing the entire economy into a deep recession -- one that I would say hasn't ended yet. How's that for unintended consequences.
I will say it again: the government could screw up a wet dream. I wish the government would just stop protecting and helping us. I can't take much more of this MessAPolitico.
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