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Thought To Ponder

There is growing interest among U.S. politicians for a form of national sales tax known as the value-added tax (VAT). But rather than use the VAT to replace the income tax, the politicians want a new source of revenue to expand the burden of government.
Daniel J. Mitchell
[ Economy Government ]
 Video: Economics 101: Defining a "Moral Hazard" 
15 January 2010
Center for Freedom and Prosperity

A new video released today by the Center for Freedom and Prosperity Foundation (CF&P) is the first in their "Economics 101" video series, a project designed to educate students, young people, and the general public about basic free market principles.


In this video, entitled "Economics 101: Moral Hazard," Nicole Kurokawa of the Independent Women's Forum explains the concept of moral hazard, which occurs when bad policies give people incentives to make imprudent choices.


She explains how government intervention created moral hazard in the housing market by subsidizing bad mortgages. This, in turn, produced a housing bubble followed by a financial crisis.

 

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Comments

Bill - 16 January 2010 05:49
101 Moral Hazard
Way to easy on the government's role in creating the financial
'problem'. As you say, 'they took the free market out of the equation'!!

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