| -Caveat Lector-
Congressman Ron Paul's Statement
of Opposition to
H.R. 1276 -- The American Dream Downpayment
Act
The American dream, as conceived by the nation's founders, has
little in common with H.R. 1276,
the so-called American Dream Downpayment
Act. In the original version of the American dream,
individuals earned the
money to purchase a house through their own efforts, oftentimes
sacrificing
other goods to save for their first downpayment. According
to the sponsors of H.R. 1276, that
old American dream has been replaced by a
new dream of having the federal government force
your fellow citizens to hand
you the money for a downpayment.
H.R. 1276 not only warps the true
meaning of the American dream, but also exceeds Congress'
constitutional
boundaries and interferes with and distorts the operation of the free
market. Instead
of expanding unconstitutional federal power, Congress
should focus its energies on dismantling the
federal housing bureaucracy so
the America people can control housing resources and use the free
market to
meet their demands for affordable housing.
As the great economist Ludwig
Von Mises pointed out, questions of the proper allocation of
resources for
housing and other goods should be determined by consumer preference in the
free
market. Resources removed from the market and distributed
according to the preferences of
government politicians and bureaucrats are
not devoted to their highest-valued use. Thus,
government interference in
the economy results in a loss of economic efficiency and, more importantly, a
lower standard of living for all citizens.
H.R. 1276 takes resources
away from private citizens, through confiscatory taxation, and uses them for the
politically favored cause of expanding home ownership. Government
subsidization of housing leads to an excessive allocation of resources to the
housing market. Thus, thanks to government policy, resources that would
have been devoted to education, transportation, or some other good desired by
consumers, will instead be devoted to housing. Proponents of this bill
ignore the socially beneficial uses the monies devoted to housing might have
been put to had those resources been left in the hands of private citizens.
Finally, while I know this argument is unlikely to have much effect on
my colleagues, I must point out that Congress has no constitutional authority to
take money from one American and redistribute it to another. Legislation such as
H.R. 1276, which takes tax money from some Americans to give to others whom
Congress has determined are worthy, is thus blatantly unconstitutional.
I
hope no one confuses my opposition to this bill as opposition to any
congressional actions to ensure more Americans have access to affordable
housing. After all, one reason many Americans lack affordable housing is
because taxes and regulations have made it impossible for builders to provide
housing at a price that could be afforded by many lower-income Americans.
Therefore, Congress should cut taxes and regulations. A good start would
be generous housing tax credits. Congress should also consider tax credits and
regulatory relief for developers who provide housing for those with low
incomes. For example, I am cosponsoring H.R. 839, the Renewing the Dream
Tax Credit Act, which provides a tax credit to developers who construct or
rehabilitate low-income housing.
H.R. 1276 distorts the economy and
violates constitutional prohibitions on income redistribution. A
better way of guaranteeing an efficient housing market where everyone
could meet their own needs for housing would be for Congress to repeal taxes and
programs that burden the housing industry and allow housing needs to be met by
the free market. Therefore, I urge my colleagues to reject this bill and
instead develop housing policies consistent with constitutional principles, the
laws of economics, and respect for individual rights.
http://www.thelibertycommittee.org
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