Government has once again overstepped its boundaries and begun to meddle in the affairs of the free market. As the Washington Post reported yesterday, Fairfax County in North Virginia has approved a program to purchase foreclosed properties and grant subsidized loans to private citizens in order to combat the foreclosure crisis which has hit the Washington area particularly hard.
The county, which has allocated more than $10 million in tax revenue to the program, will buy 10 houses up front and will provide government backed, subsidized, low-interest loans to qualifying individuals purchasing houses. Fairfax county Board of Supervisors Chairman Gerald E. Connolly (D) defended the county’s action, stating:
“Fairfax, like the rest of the country, is facing a foreclosure crisis that’s unprecedented… the county has to use its resources and influence to try to stem the tide…”
Perhaps Mr. Connolly and the rest of the board ought to be reminded exactly what the government’s role is—and is not. It certainly is not in the government’s business to use tax dollars to buy up private homes, nor should the government forcibly take money from one individual and loan it to another. Simply put, this is not what government was designed to do.
Moreover, the impact of the program is likely to be non-existent—or even negative.
One thing that is for certain, however, is that the move by Fairfax County politicians is most certainly a PR gesture designed to give the false illusion that the government is hard at work on a solution to the foreclosure crisis. Ponzi would be proud. If the county has $10 million to throw around, why not use it more effectively than by spending it on a program that circumvents the free market and is likely to have little real impact?
For starters, Fairfax County could look inward and gauge how the $10 million could be more effectively used to cushion the county budget and alleviate the tax payer burden in 2009. This in turn could stimulate the county’s economy and encourage private citizens to engage the housing market at an appropriate time when the market levels out and new prices are set.
The bottom line is that there is a crisis and its solution lies in the free market guided by private citizens. It is not the government’s place to use extorted tax dollars to help a select number of individuals acquire homes.
As Republican Supervisor—and outspoken critic of the program—Pat S. Herrity said, “This is a solution in search of a problem.”
Nevertheless, proponents of the “solution” hope to see it spread quickly across the country. Although Fairfax County is one of the first to undertake a measure of this degree, Connolly hopes his program will be a model for the rest of the nation to follow.
Hopefully the rest of the nation will choose the enduring and proven model of Adam Smith instead, keeping government and the free market in the separate roles in which they belong.
