The Wall Street Journal reports that the Obama administration plans on spending $35 billion on state and local housing agencies to bolster lending to low- and moderate-income home buyers. The effort would come on the heels of other federal interventions to prop up the ailing housing market:
Republicans are all over the ACORN scandal and calling for an end to federal subsidies for the group. That would be a good step, but it’s not exactly going out on a limb and pushing for major budget reforms.
For the past couple of years the Department of Housing & Urban Development’s Federal Housing Administration (FHA) has been doing its best to re-inflate the housing bubble.
Last week I blogged on President Obama’s “stimulus” rally prop Henrietta Hughes — a.k.a. “the face of the economic crisis.” Ms. Hughes and her son, who were homeless, asked our messianic president to help them since they’ve been stuck on a two-year waiting list at the Fort Myers, Fl., public housing authority. Using the government’s own numbers, I was able to determine that Fort Myers and surrounding Lee County received almost $70 million in U.S. Housing & Urban Development (HUD) money in the past three years. Some $41 million — or $600 per man, woman, and child in Fort Myers — went to the city’s public housing authority alone.
I concluded that HUD’s inspector general should investigate what the housing authority is doing with all that taxpayer change. And if a story coming out of Las Vegas about its public housing authority is any indicator, there’s a good chance a lack of federal funding wasn’t the problem in Fort Myers. According to the Las Vegas Sun,
House Democrats have released a $825 billion plan to “stimulate” the nation’s economy. After reading through the 13-page press release, it is blatantly obvious to me that the proposal is nothing more than a conglomeration of traditional special interest favorites. Education pork? Check. Science pork? Check. Transportation pork? Check. Pork for state and local governments? Check and check.
Cato scholars have written extensively on most of the plan’s components at one time or another. For instance, anyone interested in the alleged stimulative power of more federal dollars being spent on higher education should check out Neal McCluskey’s post from Friday. Or see Chris Edwards and Peter Van Doren on infrastructure spending in this nifty piece.
In no particular order, I thought I’d pick out some of the programs targeted for “stimulating” and provide an example of how taxpayers can expect their money to be spent. Lest anyone think I’m cherry-picking, the following hardly scratches the surface:
The IBD has an excellent front page summary of the 1990s roots to the Fannie Mae and Freddie Mac disaster.
One issue IBD touches on is the ineffectiveness of the regulating agency OFHEO. OFHEO gave Fannie and Freddie a clean bill of health just last December.
One reason that having regulatory agencies is worse than having no suchagencies is the false sense of security provided to markets by such apparently off-base seals of approval.