Thread: The Obamanation
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Old 02-17-2012, 12:07 PM   #1555
Undertoad
Radical Centrist
 
Join Date: Jan 2001
Location: Cottage of Prussia
Posts: 31,423
So Fannie and Freddie supplied the wood, not the spark. The larger point is that Fannie and Freddie was government, intervening to strengthen the working class. And the economy said, well that outcome is going to be exactly the opposite of what was well-intended, because this is the economy, and everything's connected.

I see this all the time. How about college education. It works the same way. The government, with the best of intentions, announces that it will make available cheap money for people going to college. Thus several generations benefit from greater educations.

But over time, College, with all the best of intentions, finds a huge new market of people who can afford them, on top of the people who have enough to pay. Thus College increases its price by more than double the inflation rate. Now Government and all the people who can afford it are paying double (six figures at some places) for something with no additional worth.

Medicare part D. Government, with all the best of intentions, announces that they are going to pay for old people's drugs. The drug companies then double their prices to a marketplace that doesn't shop for value. Now Medicare has to pay even more and the drug companies get rich.
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