Meanwhile, thousands of new homeowners, a large proportion of them Hispanic and black, faced foreclosure and eviction. Government's efforts to help people — especially minorities with subpar credit — created a mess.
Finally the third H, higher education. Going back three decades, government has subsidized college loans in a way that has pumped money into the nation's colleges and universities. The argument was that college degrees enabled people to make better livings and that government should help everyone who wanted one.
College becomes unaffordable
But as government pumped more and more money in, institutions have been raising tuitions and fees faster than inflation for three decades. That leaves college unaffordable for almost every family without government-encouraged loans.
The result has been administrative bloat — colleges and universities have had more administrators than teachers since 2005 — and students with college loan debt that can't be discharged in bankruptcy. Many students leave school without degrees but with plenty of debt.
Not all policies attempting to help people produce such results. The G.I. Bill of Rights providing higher education benefits and housing loans after World War II worked because it rewarded not only past service but also strenuous effort.
The original FHA home mortgage program worked well because it limited loans to those with good credit ratings.
But policies trying to extend the benefits of health insurance, housing and higher education that tended to sever the connection between effort and reward have backfired.