In a post appropriately titled "Housing Insanity," Megan McArdle expresses astonishment over the fact that despite the horrendous consequences of the housing bubble and its fallout, the federal government is going full steam ahead to promote no equity home purchases:

If you want to know why us libertarian types are skeptical of the government's ability to prevent housing market bubbles, well, I give you Exhibit 9,824: the government's new $1000 down housing program.

No, really. The government has apparently decided, in its infinite wisdom, that what the American economy really needs are more homebuyers with no equity.

The government is less worried about protecting itself from default than protecting itself from voters who want to buy a home at cheap rates. Small wonder they've decided to "help" low income homeowners into dangerous loans.

A fundamental debate is occurring throughout America regarding who is best able to make decisions regarding the use of property -- individuals in a free market or government officials. Nowhere is this debate more prominent than through local zoning and planning controls often referred to as "smart growth."

Genesee County has taken government control of private property to a whole new level with the Land Bank; a centerpiece of the Genesee County Urban Land Redevelopment Initiative. Utilizing the legal authority of PA 123 of 1999, which makes it easier for local government to obtain tax reverted property, county officials have aggressively moved to acquire tax- foreclosed properties. According to an investigation by Cathy Shafran of WJRT in Flint, the Land Bank is now responsible for more than 7,000 properties, including 2,300 abandoned homes.

Private ownership of property has been a mainstay of the American political and economic system since the founding of the country. Private property rights are guaranteed in both the U.S. and Michigan Constitutions. Americans have been traditionally supportive of government ownership of property when it serves a public purpose such as a school, highway or park. The Genesee County Land Bank, however, seems to go well beyond the traditional purposes of government ownership of property. The county is in effect acting as a real estate agent and landlord. Some have accused the county of being a slum landlord due to the blighted condition of much of the property y in the Land Bank.

The very existence of the Land Bank sends a chilling message to property owners as well as potential real estate investors. County officials have a free reign to implement their utopian vision of smart growth land use policy through the Land Bank. It is not hard to imagine the removal or relocation of entire neighborhoods "with the community's needs in mind."

Now, while the above is just local government action, I worry that left-wing ideas get shared, and that the idea might be beginning to sink in that the ultimate beneficiaries of foreclosures in general might simply be government.

If so, then it doesn't take much imagination to understand why encouraging irresponsible risk-taking and failure (in the name of "fairness," of course) would be seen as another way to hasten the destruction of private property.

So maybe the government's housing policy isn't as insane as it seems.

MORE: Glenn Reynolds thinks the problem is that these people are idiots.

Idiots who've been entrusted with nuclear weapons, and their economic equivalents.

Problem is, it takes the patience of a Zen master (which is a lot more patience than I have) to be reassured by the thought that the government is run by idiots.