Government Risk-Bearing
The federal government provides insurance of many private pension plans through the Pension Benefit Guaranty Corporation, subsidizesand implicitly guarantees the liabilitiesofseveral agencies dominating secondary loan markets (for example, the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Student Loan Mar ketingAssociation),andeithermakesdirectloansorguaranteesprivatelygenerated loans through a varietyofcreditprograms to farmers, exporters, home purchasers, and others. As the federal government has expanded its presence in the U. Insurance companies are a class of private-sector firms one commonly thinks of as providing these services. Because peopleand firms generally seekto avoid risk, atsomeprice they are willing to pay another party to assume the risk they would otherwise face.