This is the Cato Daily Podcast for Wednesday, September 14th, 2016.

I'm Caleb Brown.

Government is a lousy lender, but that hasn't stopped the feds from moving more deeply into the allocation of capital in a wide range of areas.

Mike Brannon is a visiting fellow at the Cato Institute, he writes in the latest regulation magazine

about government's poor record discerning qualified borrowers.

What roles does the government have in, broadly speaking, lending.

It has a lot of them.

It is way too many in my opinion.

So in housing it plays an enormous role.

It does so in two different ways.

The first thing, of course, is that it has, we have a tax incentive

call where we allow people to deduct the mortgage interest they pay on their house.

This costs the federal government about $80 billion a year in foregone taxes.

The 10-year budget number that CBO uses is about a trillion.

a trillion. And this greatly influences the housing market.

And it doesn't help anyone buy houses, right? The dirty little secret is that

only 30% of all individuals itemize, the richest 30%. And so those are the only ones who avail

themselves of the mortgage interest deduction.

And it's not people that buy houses in another way because a lot of people, it's anybody who has

a mortgage, not people who buy houses, right?

There's a difference right yeah exactly this this

is completely distorted that market so it encourages people to

...