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Politics and Policy at HUD

The FY 2010 budget for the U.S. Department of Housing and Urban Development (HUD) “requests a gross budget of $46.344 billion in fiscal year 2010, an increase of 10.8 percent over the fiscal year 2009 budget of $41.833 billion.” In addition, HUD’s budget request “enables the Department to respond aggressively to the housing crisis as well as contribute to broader national priorities on energy, sustainable growth, community revitalization and poverty alleviation.”

Consequently, a new Cato Institute Policy Analysis (requires Adobe), “Three Decades of Politics and Failed Policies at HUD”,  by Tad DeHaven is a timely reminder that HUD “has long been plagued by scandals, mismanagement, and policy failures.” The study “discusses how HUD officials operate within a highly politicized environment, which is heavily influenced by the groups that HUD subsidizes and regulates, including the housing industry, financial institutions, and community activists."

DeHaven writes of four recent HUD secretaries, and says:

“These public officials touted seemingly noble goals while pursuing personal and political agendas that ended up harming taxpayers and the economy. Even if there were a need for federal housing programs, experience has shown that HUD could not implement such programs without mismanagement, cronyism, and other abuses.

“Federal housing policies illustrate broader realities of government intervention. When making decisions, policymakers usually have selfinterested goals that conflict with the broader interests of taxpayers and the general public. Furthermore, their visions for improving society with federal programs usually backfire because of the distortions that those programs create in the economy.

“Housing was traditionally a private concern, and it should be made so again because government involvement has done great damage. Alas, policymakers have not learned this lesson even after the recent housing boom and bust. Since the housing and financial meltdowns, federal intervention in housing markets has substantially increased, thus paving the way for further troubles down the road for taxpayers and the economy.”

Just another case of government failure? Take a few minutes to read the entire policy analysis, and then decide.

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