Have you ever noticed that our federal government is always venturing out of its jurisdiction in trying to make things more affordable for all of us? Our paternal/maternal leaders in D.C. never pass up a chance to try to do something to make our lives easier. Their examples of benevolence are many and always end up in disaster.
Take education for instance. Uncle Sam has lavished grants and loans on us in an effort to make a college education affordable for most Americans. However, has the price of college decreased? Ever? The answer is no and in fact it can be argued that government grants and loans have actually contributed to the perennial increase in college tuitions. When students qualify for federal largess it makes them less likely to comparison shop based on cost. By eliminating cost competition in the college market institutions of higher learning have less incentive to lower costs. Perhaps this is why the rate of defaults on student loans is so high. Like subprime mortgages, instead of shopping around for economy, people commit to loans that they ultimately canâ€™t afford to pay.
Then, there is Washingtonâ€™s attempt to make retirement years more affordable. Social Security checks are mailed to millions of Americans every month to provide supplemental income to seniors. Because the program has been played up as the greatest thing since sliced bread by the Establishment many Americans have been deluded into believing that they can retire on Social Security alone. They forego saving for retirement and find when they retire that the monthly payment hardly makes ends meet. Perhaps this is the reason why many elderly folks sell their homes because they just donâ€™t have the funds to pay the ever increasing costs of property taxes. Taking into account that the Social Security Trust Fund is empty and estimates for future obligations are about $45 trillion imagine the inflation that will eat further into Social Security income when the Federal Reserve must print dollars to monetize government checks.
By now, we should all be familiar with Uncle Samâ€™s attempt to make home ownership more affordable for all of us. This has been primarily attempted through cheap money from the Federal Reserve and loan guarantees from Fannie Mae and Freddie Mac. But, believe it or not, low rates and easy guarantees increased the demand for housing thereby raising prices and shutting out millions of home seekers. Of course, in the end, artificially low interest rates and the benevolence of government caused the bubble which popped and placed millions more Americans into foreclosure.