The High Cost of Government Intervention

Here's a link to an interesting article by Rajshree Agarwal, a business professor at the University of Illinois. According to Ms. Agarwal, "Massive bailouts and other moves by the U.S. government to stem a near-epic economic meltdown could set the U.S. economy back by more than a half-century..."

This story presents another aspect of the "too big to fail" argument that doesn't receive a lot of press.

Interested? Click here to access the article.

The High Cost of Solving "Crisis" Situations

It seems like we've gone from a crisis - we have to act immediately or everything will come crashing down around us - to a calmer perspective on the economy. As has happened in the past, we are adjusting to the current situation and are likely to do quite well over time.

Our government has moved on to solving another "crisis" - the high cost of health care.

We are just now beginning to read and hear concerns about the possibilities of high inflation and costs of financing a huge federal deficit. Strangely, these concerns were ignored when we were dealing with the last crisis. I'm certainly not an economist, but it seems odd that the solution for an economic downtown resulting at least in part from too much individual debt is for the government to take on huge amounts of debt.

Let's deal more deliberately and rationally with the next crisis. Health care for everyone is a wonderful idea. However, if we can't afford it, we shouldn't mortgage our futures to provide health care for everyone. Seems like it would make more sense to figure out what we could afford to pay and then see what we could buy with those dollars.