I make a mortgage payment to the US government, the USDA, to be exact. The government will make $108,000 over the life of the loan. It's a self-help project for low income first-time homeowners. It's a win-win-win. The homeowner gets in with sweat equity. The project creates jobs for the construction industry. The government takes in more than they spend over the life of the loan.
Naturally, it's at the top of the list of programs to eliminate for teabaggers because it helps people who aren't rich. Like the bailout of GM, which will net the taxpayer hundreds of millions in profit while saving millions of jobs, shouldn't this be on the 'SAVE' list, rather than the 'KILL' list if it makes money?
I am seldom happy with the concept of government "making money". It always seems to be another ploy to cut out private business by massive subsidies, once more taking from the "haves" and giving to the "have nots". And no, I do not refer to your personal situation; merely to that particular function the government has taken upon itself.
I am not familiar with USDA mortgages and will probably make some wrong assumptions but:
1. Unless you are paying market rates of interest (probably not?) the government must borrow the money to make the loan and may well not make a profit on it.
2. Banks seldom go for "sweat equity" for good reason - far too many defaults. While you may well be successful in building your home the overall rate of failure for such projects is too high for business - why in the world would government be more successful? They can't do anything else right!
3. I assume little to no down payment - again, banks have found that to be a total failure. It is one of the major causes of the mortgage business collapse. Without subsidies government will find the same thing.
4. If indeed the project is self sustaining, creating jobs for construction industry, the same thing can be done (and done better) by private business which creates tax income that wasn't there before.
Overall, the government has no business in trying to make money by running a business. Including the mortgage business.
The program has been around for 40 years. There is a foreclosure rate, from memory, 4.5%. It's no money down but we worked! All the painting and any work which didn't require special expertise. Forty thousand homes have been built under the program, all in areas classed rural. The program is designed for people of modest income who might never accumulate the down payment. In other words, we would not have gotten into decent housing because we would never have 15 to 20% down payment.
I can introduce you to a hundred families who will tell you it works.
The same folks who want to convince you the government can't do anything right, confronted with a program that works on every level, will then tell you the government must abadon that success so the narrative of government failure is intact.
See, I told you I would make wrong assumptions. The last (only) house I've had built I did all the painting, all the landscaping, poured the sidewalk, built the front concrete and brick stoop and more. I did not consider it as sweat equity; I thought you meant framing, sheetrocking, installing flooring and cabinetry, etc. Everything but perhaps electrical, plumbing and HVAC work.
There is a local program here whereupon folks agree to help build several houses, whereupon they get their own built (with their own help). Only a small handful of professional are used. I believe it is successful, but it is VERY limited; only a handful have been completed.
I don't understand how you can say the USDA program works on every level, though; does the government actually make money (verified by competent and honest auditors) or is it another subsidy? Most government programs work; we have roads and airports, we have beautiful national monuments and parks, and NASA made it to the moon. None of these, however, make money. They all cost money, and I strongly suspect that this mortgage program does as well.
Government can and has accomplished many great things. It is just that private business can nearly always do the job as well and at far less cost.
Then why doesn't it?
And why is the bottom line all ways in $$$$$?
Why not in improved living conditions or improved employment, improved health or improved environment?
Simple: the OP was about the government making $$$$$. Not about improved employment, health or environment. That is therefore the thrust of my comments.
So why not answer the first point?
Why doesn't it?
For the most part it does. You, however, choose points that are not in the realm of business at all and expect business to accomplish it anyway.
While the American health system can produce perhaps the best health care in the world, it can't do so for everyone without massive govt. subsidies. That is not the work of private business. Just as an example.
On the other hand, ask nearly any vet using the Veterans health care what they think about it. Or anyone that works in it. It's pitiful compared to the privately run hospitals.
Lol! Yeah sure it "makes" money! The only way the government makes money is to print it! SHUT IT DOWN!
Eric Cantor said "we all need to tighten the belt, make do with less."
Unless of course, you are Rush Limbaugh.
It's too much for poor ole Rush to have 57 million dollars instead of 59.
You, on the other hand...you poor seniors, disabled kids, poor single moms, middle class worker, union member, YOU will do with less. And YOU will take it and shut up.
Did you know that the US Postal Service generated a surplus for DECADES?
They have also generated large deficits for decades. It worked fairly well until private business began to compete with them, whereupon they found they couldn't charge the premium rates for plum work and use those rates to subsidize the more difficult and lower paying work. Whereupon they went into deficity and subsidized mode.
Nevertheless, the postal service is, outside of those few income producing sectors, a good govt. service. It just doesn't produce any income.
Lol! Sure because it was a monopoly! Now it's an obsolete dinosaur that should be cut loose let fedex and UPS provide mail service!
No thank you!
I don't want to have to pay $3.00 for one stamp.
by Stump Parrish19 months ago
The tax cuts that are being debated in Washington have been described as a jobs creating nessessity by the republicans. These tax cuts have been in effect for 10 years now and I have to wonder where all the jobs they...
by Lasantha Wijesekera4 years ago
Currently PayPal is the only payment method available for the HubPages Ad Program. In most countries, PayPal can only be used to send money. Funds in the PayPal account cannot be withdrawn by the PayPal account holders...
by Motown2Chitown4 years ago
http://www.news-journal.com/news/local/ … 00470.htmlI find myself disturbed by this story. I am a firm believer in the right of an individual to ask that his religious values be respected, but does that...
by Cassie Smith5 years ago
Only half of all Americans are paying their taxes because they are still employed. The unemployment rate isn't going down any time soon as much as the media wants to spin it so it looks like the taxpayer half will...
by crankalicious2 months ago
On Friday, his first day in office, Donald Trump's administration reversed a decision that would have cut the FHA mortgage insurance premium, which would have saved the average home owner about $500/year. It was set to...
by MikeNV6 years ago
You can read it for yourself... and you should. And you should vote out every Democrat and Republican that supported this giveaway of your tax dollars to the wealthy. Everyone here knows that the Chrysler GM...
Copyright © 2017 HubPages Inc. and respective owners.
Other product and company names shown may be trademarks of their respective owners.
HubPages® is a registered Service Mark of HubPages, Inc.
HubPages and Hubbers (authors) may earn revenue on this page based on affiliate relationships and advertisements with partners including Amazon, Google, and others.