Moral hazard is a situation where one set of people take risks but, if things go wrong, a different set of people clean up the mess.
Moral hazard is frequently the unintended result of a well-intended government program. For example, federally-chartered mortgage companies Fannie Mae and Freddie Mac, created to increase home ownership, put American taxpayers on the hook for about $238 billion in the wake of the 2008 financial crisis because they enabled banks to lend to uncreditworthy homebuyers and then flip the loans to the U.S. taxpayers.
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On Other Takes: The discussion about tort reform continues.
Coming Monday: Ana Fairhust, a Texas Public Policy Foundation intern, argues for school choice. On the Balanced Views page.