The government, however, is not a marketplace.

No, granted. For me, it is more like an umpire or referee overseeing a market to ensure its fairness. Most importantly, a market without the oversight of its citizens is like a game without rules, the chaos of Calvin ball, where the most dominant players can make up the rules to fit their personal advantages.

So when a government participates in a market, yes, it "distorts" that market. Hopefully, the distortions will be beneficial over time. I know, I know, they often aren't. That doesn't mean the logic allowing these actions isn't sound.