by Allen West for Townhall
A fundamental tenet of socialist economic theory is the nationalization of production. That means more government control over the means of economic activity advancing more public and less private sector investment, ingenuity, and innovation. There are those who embrace the concept that government can provide services better and be a fair competitor with the private sector. That of course is a horrible misconception.
First, government does not have to raise capital, it simply raises taxes – or it can print money to fund its programs. Government does not have to pay for advertising its “product,” it uses unlimited taxpayer funds. Government does not have to produce a superior product, it can use the legislative process to “mandate” – we call it coerce – behavior, forcing acceptance.
In the late 1970s, President Jimmy Carter felt every American had a “right to own a home” and thus created the Community Reinvestment Act. The result some 30 years later was a mortgage meltdown due to the government-created subprime crisis. Legislation and actions were advanced to support this scheme – such as repealing the Glass-Steagall Act – along with the expansion of GSEs (Government Sponsored Enterprises) such as Fannie Mae and Freddie Mac. Today, more than 90% of mortgages in America are backed by taxpayers, not the private sector.
Of course, there are private sector entities that lobby and profit from government crony capitalism. As always when following socialist economic principles, the end result is that there are those who line up at the government trough awaiting a “bailout” – that is, taxpayer funds.
In the Patient Protection and Affordable Care Act, government “nationalized” college student loans, dictating interest rates. So, with diminishing private financial sector involvement, government has created a monopoly – with the funds clawed back from private lenders of student loans used to expand the nearly 159 new government agencies and bureaucracies created by “Obamacare.”
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