Governments taking risks

Here's a blast from the past ...

There is NO more persistent and influential faith in the world today than the faith in government spending. Everywhere government spending is presented as a panacea for all our economic ills. Is private industry partially stagnant? We can fix it all by government spending. Is there unemployment? That is obviously due to "insufficient private purchasing power." The remedy is just as obvious. All that is necessary is for the government to spend enough to make up the "deficiency." ... Everything we get, outside of the free gifts from nature, must in some way be paid for. The world is full of so-called economists who in turn are full of schemes for getting paid for nothing. They tell us that the government can spend and spend without taxing at all ... such pleasant dreams in the past has always been shattered by national insolvency or a runaway inflation. ... The proposal is frequently made that the government ought to assume the risks that are "too great for private industry." This means that bureaucrats should be permitted to take risks with the tax payer's money that no one is willing to take with his own.

Extracted from Economics In One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt

It is quite heartless to point out this fact when so many are losing homes and jobs in the west. But could it be that US and Europe are actually digging a deeper hole by the present bail-outs?