by Steve Farrell
The Moral Liberal
Making his case against government-guaranteed loans and mortgages a famous economist writes:
Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise.
They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. they tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion.
In brief, in the long run they do not increase overall national production but encourage malinvestment.
Penetrating hindsight on the housing bubble/burst, heh?
So you’d think. But, let me set the record straight: call it economic prophecy. For the economist is Henry Hazlit, the book, “Economics In One Lesson,” the year, 1979, or let’s go back further, the first edition of this prescient volume was published in 1946.
Nearly everything I’ve read in that terrific primer reads like a telltale account of today’s bad news.
Point is, it’s not like we weren’t warned about the dangers of “a little bit of socialism.”
But what is more disturbing is: first a lame duck Bush Administration (with the support of that ‘conservative’ party in Congress), and next the ‘liberal’ party come to power (with the support of the ‘media enter stage left) is now offering, no, forcing upon us (since the polls testify that a clear majority of Americans reject the idea) more socialism as the cure. And this time, “not a little bit.”
Simple solution to all this: Just say “no” to more socialism, and “yes” to a return to the American Founders free enterprise system.
It’s really not that complicated. Free enterprise is a key element in the success formula that made us the richest, freest, happiest nation in the history of mankind. While socialism is that “charitable” idea that impoverished and enslaved two-thirds of the planet.
Any questions? Just ask Henry Hazlit.
Steve Farrell is one of the original pundits at Silver Eddy Award Winner, NewsMax.com (1999-2008), associate professor of political economy at George Wythe University, the author of the highly praised inspirational novel “Dark Rose,” and the President of the Latter-day Center for Moral Liberalism.
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