jpete wrote:I'd have to disagree with that.
Governments job is clearly defined in the Constitution and promoting home ownership is no where to be found.
I think people naturally would want a "place of their own" rather than 60 to a room. Government doesn't need to encourage that.
What government needs to do is provide for national defense to create a safe environment. And keep taxes generally low so that people have enough money to afford things like houses.
When they attempt more than that is when the trouble begins.
Just would like to add to the above.
When anyone whether a private individual or government sets out to deliberately manipulate a market bad things happen, especially if they are ignorant of the most basic things of how markets work. By lowering interest rates and standards it created millions of potential buyers which in turn created demand enough to skyrocket prices. Mortgage brokers and lenders had a positive incentive to OK loans since the mortgages could be passed off to government backed institutions with no risk. Even the much milder government intervention of allowing mortgage interest to be deductible from taxes only made houses more expensive because the market quickly takes this into account. Without it house prices will be lower.
It seems that no matter how many times it is demonstrated that free markets work best, there are those who are convinced they know better. How irrational is that? The danger is when they dominate our government. They did an evil thing while deceiving themselves they were doing good. Instead of making home ownership easier they made it harder and at a cost of trillions of dollars and jeopardy to the economy which is still not over as socialist theory still prevails.