Aside from the basic governmental function of defending the people from enemies, foreign and domestic, most government action actually Makes Things Worse. This is particularly true of our modern progressive educated ruling class, whose religion is that politics can bend the arc of history towards justice.
We have already seen how government education and pensions have Made Things Worse. Let us continue.
Government Healthcare. Back in the day, when everyone (about 75 percent of people) belonged to the Masons or the Elks or the Eagles, each lodge had a "lodge doctor." I had a cousin who was a Mason -- he was a contractor that helped build his local lodge -- and he thought that lodge doctors was the best thing since sliced bread. You see lodge doctors were usually kids just out of medical school, and their were cheap. And, if you follow the link above, you will find that lodge doctors helped the poor. And, of course, doctors typically would attend to the poor for free. Not that they liked it, and not that they spent a lot of time and energy on the poor. But then I'm not sure that today's doctors put too much energy into their Medicaid patients, either.
Anyway, without government healthcare the cheapskates could get healthcare from their lodge doctors, others could have health insurance plans with whatever deductibles they had in mind, and the fancy-pants set would go to the Mayo Clinic. And we could all decide, years in advance, how much heroic care we wanted at end-of-life. Medicare, you know, has developed all kinds of protocols to speed end-of-life care. That's why Sarah Palin got into so much trouble talking about "death panels." How Dare She!
Then, there is the huge regulatory burden of government regulations and credentialization on healthcare. When you regulate an industry what you get is "regulatory capture." That's science, developed by George Stigler.
The conclusion is obvious. Government healthcare makes healthcare worse, and it won't get better until we break up the unholy marriage between government and the healthcare industry.
Government Home Mortgages. Back in the day, before the Great Depression, people only got to borrow about 50 percent of a home's value, and they could only get a ten-year mortgage, which terminated in a balloon payment, at which point you paid off the rest of the loan or you refinanced at the going interest rate. That meant that houses were smaller, prices were lower. But then the government created a secondary market in mortgage loans with Fannie Mae, and then they let Fannie Mae issue government-backed bonds, and then they let people borrow up to 80 percent of a loan and take out 30-year fixed-rate mortgages, and then they said that you had to take into account a wife's income when determining creditworthiness. And then home prices soared into the stratosphere and priced the kids out of the market.
Plus, as the science says in Walter Bagehot's Lombard Street, when you have mortgages that can't be liquidated because low down payments and borrowers can't make their payments because unemployment then you get the mother of all credit crunches as in 2006-08. So low-down mortgages make the credit system fragile. Imagine.
The conclusion is obvious. Government mortgages make homes more expensive and the credit system more fragile. They make home ownership worse.
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