More worrisome news from the sector of government economic control. The Treasury Department is expected to announce it will be pumping an additional $7.5 billion into car loan company GMAC, and as a result the federal government will assume a majority stake in the private auto finance company. Not only does it throw more taxpayer money down the tube in an effort to prop up car loans, but it gives bureaucrats controlling interest in a private entity that is responsible for a large number of citizens’ car loans. With giving tax money comes an obligation to safeguard the public funds, but there is a large difference between being cautious on behalf of taxpayers and taking the reins of a company on the supposed behalf of taxpayers. The move will put the finishing touches on an almost complete takeover of the auto industry by the federal government.
This comes as Federal Reserve officials are considering buying more debt from Treasury and the mortgage industry, and have, incidentally, downgraded their outlook for the near-term economic future, saying the recession will continue for another two years. Good thing we got that massive stimulus package passed, right?
If you want to know the endgame for all this government spending, just take a look at the woes of California and a few other states that have spent themselves into fiscal oblivion. Taking over vast sectors of the economy won’t solve the underlying issues, but will instead massively harm the free-market system that, by and large, has served us fairly well. Government control of the auto, banking, and finance industries signals a troubling turn into the morass of socialism that will take a long time to extricate ourselves from. My fears for our long-term outlook are growing steadily by the day.