Government Programs Waste Taxpayer Dollars

I recently visited the Lyndon Baines Johnson (LBJ) Presidential Library in Austin, Texas. From 1964-1967, LBJ strong-armed Congress into passing a plethora of government welfare programs that  became known as The Great Society. LBJ had witnessed many Americans living in poverty and he believed that the government should solve the problems of the poor.

Democrats have consistently been quick to develop government programs and slow to admit that the government programs are not working and are a waste of taxpayer dollars. 

In 1965, LBJ and the Democrats forced through Congress the Housing and Urban Development (HUD) Act which they championed as the most valuable legislation in history. 

Jack Ryan, founder of Rex, a house brokerage firm, analyzed the results of this legislation. Ryan noted recently in the Wall Street Journal that in 1967 the US home ownership rate was 64%. Today, after spending $3 trillion dollars (in 2024 dollars), the home ownership rate is 64%.

Interestingly, in Europe, the home ownership rate is 69% according to the European Union. In the US, after huge government spending in this area, there is no increase in home ownership. 

Ryan notes that, sadly, US home prices and rental rates have risen faster than inflation. In 1967, the average home price was $27,000. Today, the average home price is $500,000. In 1967, the average home price was 3 times an average family’s income. Today, the average home price is 7 times the average family’s income.

The government programs dealing in the area of home ownership are numerous. Fannie Mac, Fannie Mae, Freddie Mac, the Federal Housing Authority and the Federal Housing Finance Agency are all federal agencies put in place to help increase home ownership. 

The results of these agencies in the private sector would be called disastrous. Sadly, in the world of federal government funding, these failing programs continue to receive huge amounts of taxpayer dollars. 

If the federal programs were ineffective but harmless, one could accept the fact that many government agencies and programs are useless. 

Sadly, in the housing area, the government programs actually harm the taxpayers. By subsidizing down payments for unqualified buyers, the government introduces an excess supply of buyers into the marketplace. In many instances, these additional buyers drive up home prices to artificial levels. Many people are forced to borrow more money in order to purchase these homes. Often this leads to unnecessary bankruptcies when the economy falters. 

The federal government has thrown trillions of dollars into the marketplace attempting to increase home ownership. As with much of the government spending, it is useless and unnecessary. 

Ironically, you can rest assured that when Trump and Musk attempt to cut the HUD funding, the Democrats, locally and nationally will yell and scream that Americans will be shut out of their dream of home ownership. Just remember, Democrats do not understand how to operate business at a profit. They are, however, proficient at wasting taxpayer dollars.

Let’s hope that Trump and Elon can save our government by cutting the waste.