Cato scholar Mark Calabria argues in this paper that Fannie Mae and Freddie Mac, the two giant “government sponsored enterprises” that came to dominate the mortgage market ought to be abolished. Calabria right. I’d just add that these government programs meant to encourage home ownership, should never have been started. Just as with Social Security, Medicare and other federal programs begun long ago with the stated goals of doing nice things to help people, Fannie and Freddie became political kudzu, growing like mad.
Nothing in the Constitution authorizes Congress to be in the housing business at all. We’d be far better off if Fannie and Freddie had been killed off at the idea stage by someone pointing out that they are not proper uses of federal authority.
