Thursday, October 23, 2008

Government to Gen Y: Get Lost!

It's not enough to have spent their money running up a $10T bar tab by handing out cash to people who didn't earn it (more huge subsidies for farmers! Yay!), now we're talking about keeping inflated housing prices high so young couples have a harder time buying a home.
WASHINGTON -- The Bush administration is weighing a roughly $40 billion proposal to help forestall foreclosures, one of a series of ideas under consideration designed to address the root causes of the financial crisis.

At a Senate Banking Committee hearing Thursday, Federal Deposit Insurance Corp. Chairman Sheila Bair is expected to suggest the government give banks a financial incentive to turn troubled loans into more-affordable mortgages, according to a person familiar with her testimony. Under the proposal, the government would share in any future losses on the new loans with lenders.
Home prices are still inflated. Foreclosures are an indication of that. Stopping foreclosures acts as a brake on the fall of prices. Foreclosures add to the supply of houses on the market. More supply with constant demand lowers prices. At least until Congress figures out how to repeal the law of supply and demand. In any case, we're working hard to keep housing prices unnaturally high.

You're welcome, kids! And since you're going to have to keep renting for a bit longer, would it trouble you to pick up the tab for the upcoming increases in the budgets for education, agriculture, the NEA ...


Anonymous said...

"Under the proposal, the government would share in any future losses on the new loans with lenders."

Forget loners sitting in cabins... now the anti-government forces can just buy real estate and walk away, thus shafting the government and a lender at the same time....

Dean said...

I remember this past spring thinking that the silver lining to the housing price correction was that repsonsible folks who didn't get sucked into the subprime non-sense would be able to start purchasing homes and thus begin to stabilize the prices naturally... a win-win.

And then the $300 billion mortgage bailout happened in June and I thought, uh oh, it on.