Investing with the US Government: Is it a Good Idea?

What's interesting about the current government bailout and stimulus mania in the US and in other parts of the world, is that for a long time, businesses with meaningful revenues from the government tended to sell for lower valuations,due to the fact that for obvious reasons, government-focused businesses are simply unreliable. In fact, there are generally risk clauses in many companies SEC filings that focus on the degree of government reliance and the uncertainty this creates.

Now with the government meddling in every business and essentially taking over the entire financial system, as well as proposing an almost ludicrous stimulus package (implying that the government will try to create a viable business by pumping money into the economy?), we are all now directly investing in the US government.

Shouldn’t this then be the strongest argument yet as to why valuations need to be significantly lower in the stock market? Who in their right mind, unless one is considering fraud (and government businesses are rife with fraud and a goldmine for those with a criminal mindset), would want to invest in a business with major government control? Is there anything more unreliable, fickle, and inefficient, than the government? What kind of discount is needed before one ventures to invest in a business which is by definition filled with corruption and inefficiency?