by Ellen Sauerbrey

The Obama administration is moving with lightning speed to destroy the private sector and create a new kind of citizen-serf that must look to the government to meet ever more basic needs. Government takeovers started in earnest a year ago with the seizure of Fannie Mae and Freddie Mac. This was followed by the takeover of banks and the car makers. And currently the battle is being fought over the attempted takeover of health care and student loans.

If President Obama and liberal Democrats in Congress have their way, for the first time in history, American citizens will be dependent on bureaucrats in Washington for their home mortgages, their children’s college loans, and their health care. That equates to a dangerous new level dependency on government for middle America.

The Washington Post reported September 7 that the federal government is now guaranteeing 86 percent of all new home mortgages, up from 30% four years ago. So for most American families, the American dream of home ownership now rests with a federal bureaucracy. This is the same bureaucracy that encouraged people to buy homes they could not afford and stuck the taxpayers with billions in defaulted loans.

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In mid September, the House voted for an education-financing measure that would oust private lenders from the student loan business and make the government the sole provider of student loans under federal programs. Should parents be left with no choice but a Washington bureaucracy from which to borrow money for their children’s college education?

As the Wall Street Journal reported, “Loans directly from the feds have been available for decades, but the government’s poor customer service has resulted in most borrowers choosing private lenders. We are told that we need a “public option” to ensure competition in health care, yet when it comes to student loans the government wants to crush competition.

If the Senate passes the measure, the U.S. Department of Education will move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans. The remaining 20% of the market is likely to be crowded out by regulations Congress created last year.

Critics argue it is wrong to put the government in near-total control of student lending; that it expands the federal balance sheet by another trillion dollars over the next decade, and can inject politics into loan issuance and loan defaults.

Do American families really want their ability to buy a home or send their children to college dependent on a government bureaucracy? If the Democrats also succeed in their quest to grab control of the American health care system, the mechanism will be in place to control the most intimate aspects of our lives.

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