The government solution to a problem is usually as bad as the problem.

--Milton Friedman

Summary--

We look to government to solve our problems and find that the medicine is often worse than the disease it was supposed to cure. Too often, government action accomplishes exactly the opposite of what lawmakers had in mind. In many cases, the best thing government can do is get out of the way and let the private sector do its job.

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Whenever we're dissatisfied with something, people and politicians often look to government instinctively to solve the problem. The downside of this approach is that whenever government sets out to do one thing that seems noble enough, the end result frequently seems to be just the opposite of what is intended. So when the federal government mandated that banks help unqualified borrowers get home mortgages, the goal was to increase home ownership. The result was a lot of people losing their homes, along with their future credit prospects.

The examples are endless. Government intervention during the Great Depression was probably the main reason the downturn lasted as long as it did. Similarly, today's heavy-handed government market intrusion along with its spending as if there is no tomorrow are without a doubt prolonging our current economic crisis.

Or take student loan programs: The National Direct Student Loan program began in 1958 and focused on making college affordable for low-income students. Beginning in 1965, Guaranteed Student Loans became available to all students. Other programs followed with the intent of making college more affordable. One of the most remarkable side affects of this constant stream of government funding has been the creation of a financial climate that has enabled tuition rates to increase on average at roughly double the rate of inflation every year since 1958. Schools have been able to raise tuition so dramatically because students, backed by the government, have virtually unlimited ability to pay. Funny how that works. Government tries to make college more affordable and in the process creates the conditions for skyrocketing tuition costs. And students, families, and taxpayers are saddled with a mountain of debt.

The State of Utah wanted to increase insurance coverage for its citizens, so it mandated what kind of insurance firms with government contracts must provide for employees and dependents. As I've discussed further under the healthcare heading, one of the results of this policy is to decrease the use of health insurance policies that show the most promise for controlling healthcare costs. Surely that is not what State lawmakers intended.

What about public assistance policies that provide more funding for households with only one parent in the home? The tragic consequence is to discourage traditional, two-parent homes. The list goes on. Near our home are government-subsidized apartments. If tenants there get a job and start making more money, their rent goes up equivalently. The result of that policy is that people that are economically challenged to begin with have little incentive to get and hold a job—certainly not what lawmakers and bureaucrats had in mind when they developed this approach.

And what about UTOPIA and iProvo? These are both cases where government sponsorship of technology initiatives has squandered public funds and at the same time hindered progress the private sector would have made.

These examples underscore the fact that we should all have a healthy skepticism whenever anyone suggests that greater government involvement in our lives is going to make things better. My father always warned me to watch out and hold onto my wallet if ever someone arrived on the scene, hand outstretched in greeting, saying, "Hi. I'm from the government, and I'm here to help." Yes, there are things government can and should be doing, but government will never be as well managed and responsive to its customers as private businesses.

As Ronald Reagan used to say, in many cases the best thing that government can do is "get out of the way. . ." so that the private sector can do its job. Many of society's biggest problems will be better dealt with if our public policy makers understand the limitations of government intervention and instead remove impediments so that the free market can flourish and work towards solutions that will actually achieve what is intended.