The federal government repeatedly demonstrates zero understanding of the law of unintended consequences, showing that history is little barrier to legislators’ plans. Fall of last year, the federal government’s involvement in home loans bore its rotten fruit.
If there is anything at which the federal government has proven completely incompetent, fiscal responsibility certainly nears the top of the ever-expanding list.
The Social Security Act of 1935 mandated donations from every tax-paying individual in America, forcing the working population to pay retirement benefits to the 65-and-older population.
The Securities and Exchange Commission defines a Ponzi scheme as a system in which “money from new investors is used to pay off earlier investors until the whole scheme collapses.”
Compare this definition to Social Security. The biggest Ponzi scheme in history is due to collapse in 2017 when money from new taxpayers no longer covers payments to earlier retirees. Yet half of the nation seems to believe that legislators are the appropriate people to manage health care.
Congress approved the Federal Reserve Act in 1913 under the pretense of solidifying the dollar, regulating banks and maintaining the stability of America’s financial system.
What cost a penny in 1913 now costs roughly 96 cents. Does this sound like a stable dollar?
Most of you are too young to remember, and your educators have undoubtedly failed to explain to you, but there was a Savings and Loan Crisis in the 1980s that triggered a panicked “bail out.” Does this seem like successful regulation? Does it sound similar to last fall? Banks regulated by governments fail.
Carter brought us and then Clinton revised the Community Reinvestment Act. This brain trust combined a Republican House and a Democratic president legislating lower standards for home loans.
I doubt any of you need to be reminded of the consequences of this legislation.
Remember, Congress funded the covert war against the Soviet Union in Afghanistan, Saddam Hussein’s war against Iran and Operation Iraqi Freedom.
All these acts of government reaped unintended consequences harming the American public. While the harm may have been limited to increased taxes or the utter destruction of the value of the dollar in a couple of these instances, they also caused problems that took decades to develop.
The housing bubble took decades to inflate before bursting last fall. Congress accomplished the very same feat in just weeks this summer with Cash for Clunkers. They certainly became more efficient in damaging the economy. Keep the change.
In 32 days spanning July and August, Congress approved $3 billion in funds we do not — and never will — have to encourage the trade-in of old gas guzzlers for more efficient vehicles. Americans largely traded in American SUVs for Japanese sedans. Oops.
Supporters lauded the success of seven hundred thousand “gas guzzlers” traded in for newer vehicles, and claimed the triumph of the program triggered increased production from auto manufacturers in Detroit. Why would Detroit increase production when the Toyota Corolla was the number one vehicle sold?
We tolerate this lunacy from Washington, somehow allowing this collection of lawyers to tell us whatever they want, regardless of the reality.
Yes, government provides somewhat clean drinking water, the interstate system and the FAA. They also create a mess of virtually everything they touch, like the Midas touch, except the result stinks of dung.
Last week Congress approved the Student Aid and Fiscal Responsibility Act and the Editorial Board of this very newspaper applauded Congress for ultimately making college more affordable. By taking borrowed money they will not be alive to pay back, Congress made nothing more affordable, they instead mortgaged our future.
Our generation must realize every cent borrowed today requires taxes or inflation — the “invisible” tax that takes value from your money and transfers it to the government — tomorrow.
There is no surer method of ensuring the demise of student loans and education than taking them away from private banks and putting them in the hands of the federal government.
History is crying out to us screaming, “Stop the insanity!” at the top of its lungs. Will we ever listen?
Seth J. Stern is a senior journalism and sociology major and a political science minor. His column appears Fridays in the Collegian. Letters and feedback can be sent to email@example.com.