Uncle Sam to the Rescue

Today’s lead story in The New York Times is titled, “U.S. is Finding Role in Business Hard to Unwind.” It lists many statistics about the involvement of the U.S. govenment in the national economy since the financial crisis last year and suggests difficulties that will be faced in any return to free market enterprise.

The statistics listed in the article are indeed startling:

– Government spending accounts for 26 percent of the national economy, the largest percentage since World War II.

– 8 out of 10 new mortgages are financed by the United States.

– A car bought from General Motors technically is 60 percent owned by the government.

– Life insurance from AIG is 80 percent owned by the government.

– There are more than 200 civil servants administering the takeover programs with taxpayer money.

However, the article notes $70 billion in loans to many banks have been repayed with a substantial profit for the government, and the possibility of additional paybacks remains.

In my opinion, there is still light at the end of the tunnel, and many enterprises now dependent on U.S. aid will be eager to be rid of federal involvement, if only to regain control over their own paychecks. Money and profits will serve as just as useful an incentive to getting rid of the government as it was in pleading for their assistance.

Yes, power, especially financial power, abhors a vacuum. But the culture of this country is such that the private sector will fill that vacuum more and more as the recession recedes and the country grows stronger.