American Elephants

The Federal Government Has 160 Programs to Deal With Housing. by The Elephant's Child

Many people are puzzled by conservative protests about Big Government. And when Republicans start listing departments they’d like to dispose of, are somewhat horrified.  High on the list is usually the Department of Education and the Department of Energy. But it is farther down in the weeds where the problems become obvious.

We have One Hundred and Sixty federal programs that deal with housing.

In a recent report from the General Accountability Office, they noted that “fiscal realities raise questions about the efficiency of multiple housing programs and activities across federal agencies with similar goals, products, and sometimes parallel delivery systems.”

Senator Jim DeMint’s (R-SC) senior communications advisor and speechwriter, Amanda Carpenter, was a columnist for the Washington Times, wrote a post on the senator’s page concerning how many programs deal with housing.

HUD runs the majority of the programs, 91. The United States Department of Agriculture, which also administers farming aid and the nation’s food stamp program, offers 18 different types of housing assistance as well.  The Internal Revenue Service has 14 programs, The Department of Treasury offers 8 programs; the Department of Veterans Affairs 7; the Department of Labor; Federal Home Loan Banks 3.

The rest are run through a number of organizations: Interior, Federal Reserve, Fannie Mae, Freddie Mac; Ginnie Mae; Farmer Mac; the Federal Housing Finance Agency, and the Consumer Financial Protection Bureau, and more.

The complete list is found in the Table of Contents page: scroll down.

This is just a hint of the growth to be found in the executive sector of the government. There are an obscene number of job-training programs, many if not most duplicative.  Wikipedia has a list of the major departments and the year they were established, including the annual (2009) outlay of funds and numbers of employees. ObamaCare added, I believe, 159 new agencies, and those will probably spawn more. You will notice that some Departments have changed their name, swallowed up others, recast, but none, none — ever go away.

And this is only the smallest glimpse of the problem. Each of these Departments has many agencies, offices, or administrations. Some are not listed, like the EPA which is an independent agency that apparently answers to no one. The EPA is my number one candidate for extinction. It has done little that is useful, and enormous amounts of damage, and should be abolished. I don’t think that Congress has the fortitude to eliminate it.

Overspending, Overregulation: Exporting American Business! by The Elephant's Child

Earlier this month the non-partisan General Accounting Office (GAO) released a 345 page report detailing 34 major areas of wasteful duplication in government spending.  Senator Tom Coburn (R-OK) said it makes Congress look like a bunch of jackasses.  He pointed out that ending the duplication  could save the government $100 billion to $200 billion every year.  A no-brainer, right?

Liberals responded to the report with polite applause,  Sen. Harry Reid bubbled with enthusiasm. “I think there are duplicative programs around here that we could eliminate.  Those are some of the things we could do over the long term that could save some money.” Nothing to see here, please go back to sleep.

Liberals continue to believe in Keynesian economics, that government spending creates a “multiplier effect” that stimulates the economy. They like believing that because it allows them to continue spending, which they believe gets them votes.  Unfortunately they are impervious to evidence.

Goldman Sachs released a report purporting to show that the $61 billion in cuts in the House fiscal year bill would reduce economic spending by up to 2% this year.  Economist Mark Zandi issued a report claiming that Republican plans would reduce economic growth by .5% this year and by .2% in 2012, resulting in 700,000 fewer jobs by the end of next year. These are the same gurus who promised that their $1 trillion stimulus would keep unemployment below 8%. That worked well.

Brian Reidl of the Heritage Foundation explains why government spending does not stimulate economic growth:

Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another.

Congress cannot create new purchasing power out of thin air. If it funds new spending with taxes, it is simply redistributing existing purchasing power (while decreasing incentives to produce income and output). If Congress instead borrows the money from domestic investors, those investors will have that much less to invest or to spend in the private economy. If they borrow the money from foreigners, the balance of payments will adjust by equally raising net imports, leaving total demand and output unchanged. Every dollar Congress spends must first come from somewhere else.

A recent poll from The Hill found that voters are nearly unanimous on debt reduction, and a majority want Congress to cut spending.  Whether that means that people are really aware of the seriousness of the problem remains to be seen. Americans have a lot of plain old common sense, and understand debt and balanced checkbooks.

President Obama said that “rules have gotten out of balance, placing unreasonable burdens on business — burdens that have had a chilling effect on growth and jobs.”  Unfortunately here is a big distance between Obama’s rhetoric and his followup. No one believes him.

American companies are strangling in red tape.  George Buckley, CEO of 3M told the Financial Times recently that “Politicians forget that business has choice.  We’re not indentured servants and we will do business where it’s good and friendly.  If it’s hostile, incrementally, things will slip away.  We’ve got a real choice between manufacturing in Canada and Mexico — which tend to be pro-business — or America.”

The regulatory burden falls even more heavily on small business than on giants like 3M. Small businesses are the engines of growth and source of as much as 2/3  of all new jobs.The Small Business Administration (SBA) says that for companies with 500 or more employees, the cost of regulation comes to $7,765 per worker.  For companies with fewer than 20 employees, it’s $10,585 per worker.

Shrinking government entails more than just cutting our $3.7 trillion in spending, which is hard enough with unwilling Democrats, but we must also slash the regulatory state. The economy will not recover and the unemployed will not find new jobs with governmental dithering, meaningless rhetoric and liberal foot-dragging.

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