What do Healthcare, College Education and Housing Have in Common?

Guest Post: Money Down A Rathole: College, Healthcare, Housing | ZeroHedge.

All of the items mentioned in the headline above have one thing in common, and it is very obvious after reading the article. Can you guess what it is?

The answer is that each of the market sectors is heavily influenced by federal spending. The federal government guarantees student loans incentivizing financial institutions to originate more student loans. In healthcare, huge swaths of the population, mostly oldsters, are receiving free or subsidized health car at the expense of the taxpayer. The government also guarantees mortgages and encourages mortgages for marginal lenders pumping up demand for housing.

In each of these situations, government money is hot money. Additional demand is created by each of these programs resulting in inflation.

Government programs help in the short-term, but in the long-term people adjust and game the system. Those receiving benefits try to maximize those benefits, and the suppliers raise prices in response to maximize their revenues.

Of course, this is a losing argument. No one believes that the programs that we are deploying to help ourselves are actually the things that are hurting us.

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