The gist of this report is that the creation of Freddie and Fannie created a non-sustainable bubble. Social engineering that attempts to lift people up by providing them benefits that they AND the society cannot afford inevitably leads to disaster. The report titled: "The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008," is available at the link. Have some airsick bags nearby.Washington must reexamine its politically expedient but irresponsible approach to encouraging higher levels of homeownership based on imprudently small down payments and too little emphasis on borrowers’ creditworthiness and ability to repay their loans. Without such a return to fiscal discipline and responsibility, we will continue making the same mistakes that led us to the current financial crisis.
Friday, July 10, 2009
And you are just now figuring this out...
In the "ya think?" category - this brilliance from the U.S. House of Representatives Committee on Oversight and Government Reform: