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This post is in response to the question What are practical ways that the United States can be proactive in preventing future financial crises? posed by 
I believe the easiest answer to this question is by avoiding the creation of artificial markets. The United States has a tendency of trying to force the market in certain directions which then ends up being counterproductive. When artificial markets form, they cannot last forever, so when the market starts to correct itself, we see the “bubble” burst. In the movie from last night, an example used was of federal college loans. The United States has attempted to force the market in a specific direction by providing federal loans to students without any collateral or credit check. As a result, students take out these loans that they will not be able to afford without receiving a high paying job after graduating. However, high paying jobs are not necessarily common for a majority of college majors, so the debt is almost insurmountable. For example, education majors end up with a huge student loan debt, but their profession as public educators does not allow them an income large enough to pay it off. This results in debt that will never be paid off. The way that the U.S. tried to manipulate the market to ensure college was accessible was not a well thought out strategy because now we are seeing the economic impact it is having on graduates. This may eventually lead to the bubble bursting. In response to the question at hand, I feel the U.S. government ends up causing these bubbles by halfheartedly interfering with the market in ways that then end up having a worse long term effect. I believe that if we took two different approaches, it may result in better consequences. First, we could argue that the U.S. needs to stop involving themselves in the market at all and let it self correct itself instead of trying to inflate it artificially. Another option may be for the government to take control over certain institutions like with socialized medicine or ensuring college education be free to all. By doing either of these things, I believe a better alternative will be met than what is occurring in the status quo.
