Should more government programs strive to be more like the Federal Housing Administration? Sometimes, the FHA catches flak for lending to “subprime” borrowers and possibly contributing to higher-than-normal rates of foreclosure. Such is the case in Baltimore right now. But there is one important attribute of the FHA that should make it a model for all other government agencies. Namely: it costs the taxpayer nothing.

This makes discussing the mission and the practices of the FHA about as meaningful (or meaningless) as discussing the mission and practices of any private corporation. You can do it, but there is a more effective method of “protest.” If you don’t like what they produce or how they produce it, don’t buy anything from them. It’s just that easy.

Unlike agencies that receive funding directly from the government, private companies (and the FHA) need revenues coming in to meet expenses. They don’t get to rest on their laurels and continue wasteful practices after they’ve been identified. If something they’re doing is losing them money, they need to fix it or risk shutting their doors for good. That’s a powerful incentive for efficiency and good service – and it’s what has kept the products and services available on the private market improving steadily year after year.

There are a lot of government programs that I don’t support. I would imagine that there are some that you aren’t too fond of either. I say this not because I believe the only people who read our Maryland Policy Blog must be government-hating anarchists, but because the government has its fingers in so many pies that it would be almost impossible for someone to agree with all of them. However, it would be markedly less important who agreed with what if these programs weren’t taking money from the average American taxpayer.

The FHA has found a clever way to maintain its operations since 1934 without taxpayer funding. (It uses the revenue from the mortgage insurance paid for by homeowners to fund its operations.) Is it the most efficient organization in the country? Probably not. Is it the best solution to the problems it intends to solve? Again, perhaps not. But should it bother me, as an average American taxpayer? No – because it’s not my money!

So whatever I may think about the FHA should be meaningless to someone who uses its services, just like I am free to enjoy the low prices at Wal-Mart regardless of how many people think it’s an evil, greedy corporation. Since neither the FHA nor Wal-Mart are taxpayer funded, they are insulated from the discussion that we should be having about every single government agency right now: Is this the best use of our (limited) taxpayer money?

If more government agencies were more like the FHA, taxes would be lower and services would likely be improved. And we wouldn’t be so worried about driving off the fiscal cliff.