If the government backs everything, people will engage in riskier behavior because they don't accurately assess risk. That creates a massive bubble of risky investments until it's too large for the government to effectively control.
There's an interesting book on the subject you might want to check out:
Not really. Remember this? https://www.forbes.com/sites/gordonchang/2014/01/19/mega-def...
If the government backs everything, people will engage in riskier behavior because they don't accurately assess risk. That creates a massive bubble of risky investments until it's too large for the government to effectively control.
There's an interesting book on the subject you might want to check out:
https://www.amazon.com/Chinas-Guaranteed-Bubble-government-p....