Exactly! Government assumed the Risk! If I owned a mortgage company and the government said, “Make sure EVERYONE gets a mortgage, and Freddie and Fannie will pay for it!”. Why not give everyone a mortgage?! It is called a “perverse incentive”. Every time government gets involved in free markets, it creates them! (e.g. $700 hammers, $900 toilette seats, trips to vegas, etc.)
Ann Coulter just wrote an opinion piece about college and university tuition. It has gone up 1,000% since 1978. Why? Government (read: taxpayers) assumed the risk on the loans, so the greedy academia crowd has been ratcheting up the price like a flywheel.