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What Housing Bubble?

Tuesday 17 August 2010 - Filed under Dumbassery + Economy + Government

The New York Times concerning Fannie and Freddie:

The administration is still considering these and other options. The choice will reflect in large part a judgment about how hard the government should try to increase homeownership. Broader guarantees create greater risks for taxpayers, but also lower interest rates, bringing ownership within reach for more families.

Shaun Donovan, the housing secretary and a host of the conference with Mr. Geithner, said that the administration remained committed to “broad access to homeownership, including options for those families who have historically been shut out of these markets.”

Government still playing the “home ownership at any cost” game is a sign that it didn’t learn a fucking thing.

Simple economics lesson: if you flood the market with easy money given to those who generally cannot afford it, that isn’t backed by a down payment, yet guaranteed with tax dollars, you set up the perfect conditions for a repeat of what just fucking happened to the housing market. Easy money = prices skyrocketing = inflated markets that are unfuckingsustainable.

Why is it that a goddamn medieval literature nerd understands this idea better than the administration’s top economists?

And that’s just the purely economic argument against government backed mortgages. The other elephant in the room is asking why the fuck it’s my responsibility as a taxpayer to encourage homeownership for those who cannot afford in on their own accord by backing mortgages for those who don’t pay in to them themselves?