Interest rates in the US are not set directly by the government. Instead the federal funds rate is a target rate that the Fed aims for by either expanding or contracting the money supply.

Also the TIBOR and LIBOR and all the other *IBORs aren’t set by the government either. Certainly government monetary policies affect these rates, but ultimately it’s a free market function.

Having the government directly set private lending rates is a very bad idea and would certainly result in disaster (much like how all other price controls are terrible ideas).