GOVERNMENT is inefficient, wasteful, and shortsighted. Bureaucrats are lazy, corrupt, and dull-witted. Now that I have left government, I hear the government-is-dumb critique from academic colleagues. From business colleagues, I hear the government-is-inefficient mantra (with countervailing praise for private sector efficiency).

Voters share this distrust: Their enthusiasm for privatizing Social Security and reluctance to expand government health insurance mark doubts about the competence of their leaders.

So I offer the housing sector as evidence of government's savvy and worth. The United States has set records that other nations envy. And standing in the wings, barely recognized, is government, which has undergirded and propelled this economic success tale.

First, the statistics. A majority (68 percent) of households own their own homes, the highest in our history. New homes are 50 percent larger than 30 years ago. Today, more than ever, home ownership is Americans' principal asset-building strategy. In 2001, we cashed out $75 billion via
refinancings - almost twice as much as we received from tax rebates. Even most stock owning households hold most of their wealth in their homes.

Housing, moreover, has not gone into free-fall in this recession. In 2001, there were record sales of existing homes and near-record construction of new homes. Economists marvel that this industry remains strong as other indicators dip.

It was not always thus. Twenty years ago many families were priced out of the market: High interest rates, coupled with high down payments, kept them renters. And historically housing led the economic recessionary downturns.

What happened? A constellation of forces, private and public, deserve praise.

The mortgage interest deduction, in place since 1913 (when all interest was deductible), remained intact after the 1986 tax revisions, making homeownership more advantageous.

The government acted to take some of the risk out of mortgage lending. The New Deal offered banks some protection by insuring the mortgages of qualified borrowers (through the Federal Housing Administration). Further, the New Deal laid the groundwork for a secondary mortgage market, which has evolved into an efficient structured channel for banks to hedge risk. The government-initiated and chartered secondary mortgage market assumed even more of banks' risks: By buying mortgages, they gave banks sufficient liquidity to lend to far more prospective borrowers. Both Fannie Mae and Freddie Mac have grown to be the giants holding up one of the housing sector's many legs. Fannie Mae and Freddie Mac bought or guaranteed almost two-thirds of all Americans' mortgages last year.

Although neither giant is directly under government control, the government's role in their modus operandi has surely spurred their growth (both raise capital at favorable rates). They attract investors throughout the world.

Low interest rates too encourage more people to buy homes. The government-created Federal Reserve has had an overt policy of lowering interest rates to spur housing consumption.

And government has subsidized home ownership for low- and moderate-income first-time buyers. State housing finance agencies, issuing tax-exempt bonds, offer subsidies to first-time borrowers (through federal tax exemption) - subsidies that lower interest rates. Finally, 30 years ago, some would-be borrowers, because of race, ethnicity, family status, or income, heard ''no'' from lenders. With Fair Lending laws, the government outlawed discrimination. With the Community Reinvestment Act, the government nudged banks to reach out to low income Americans.

Of course, the private sector merits a giant bow for the homeownership success tale. Low unemployment, coupled with the prosperity of the late 1990s, enabled more people to sign on the dotted line of a mortgage. And the plethora of mortgage ''products'' from a host of lenders - no longer just banks, but mortgage companies and bankers - convinced would-be buyers that they could swing a mortgage.

The success tale is not complete: One out of every eight families spend over 50 percent of their income on housing. Wages have not kept up with rents: Nationally, a head of household needs to earn $13.50 an hour to afford a moderate two-bedroom apartment. In Boston, the hourly ''housing wage'' is $20.21; in Kansas City, $12.90. Although the homeownership rate for minorities has grown, a black-white schism persists.

In fact, the final criticism of government comes from advocates for the poor and near-poor: Government is heartless, deaf to the disenfranchised. Where the private sector measures government against a business school archetype of efficiency, the nonprofit sector measures it against an archetype of compassion. Admittedly, the government can and should do more.

But this bureaucratic machine - which has fueled millions of Americans' ascent to the middle class - is neither inefficient nor stupid. The legislators squabbling over arcane laws and the bureaucrats poring over regulations in alphabet-agencies deserve recognition.