Help me battle my teacher's indoctrination

[lehighguy]

I don't know enough about Enron. Some of the problems may go all the way back to our government conception of a corporation. I'll let others comment on this.

Sub-prime lending is a natural result of moral hazard created by government in the first place.

First in the way the Fed runs out monetary policy to promote borrowing and spending over saving. This might take a lot of study and I guarantee your professor wouldn't understand it.

Second is our governments favoring of mortgage debt through interest tax deductions amongst a variety of other subsidies. The governement favors people who take out giant mortgages.

Third is our government has created an atmosphere were people expect to be bailed out, leading to moral hazard and a propensity to take risks. Ask about the S+L crises in the 80s, the LTCM bailout in '98, the "Greenspan put". Recentely our new Fed chief slashed rates 50bp, devauling the savings of Americans to bailout the sub-prime crowd, no doubt ensuring people will engage in the same practices next decade expecting another bailout.

Social Security is a giant ponzi scheme. The program uses the same accounting as Enron. If the government was a private entity it would have been shut down for massive fraud related to these programs.

Your professor likely advoates reduced military spending to pay for SS and Medicare. In addition to not being enough a much better question to ask is why such funds should go to SS and Medicare when they can be given back to the people through lower taxes. People can then invest that money for thier own retirement, ensuring money is actually there for thier retirement rather then being squandered by the governemnt.

Scandanavia does great because it is sitting on as much oil as Saudi Arabia. They are better run the the rest of Europe due to thier smaller size, but they suffer from many of the same demographic problems and if not for the oil they would have the same financial problems as France. France is a good example of how [censored] things would be with socialism in America.