Saturday, March 6, 2010

Economic View: Mom, Apple Pie and Mortgages

By Robert J. Shiller in the NY Times:

FOR decades, the federal government has subsidized housing — particularly owner-occupied housing. This has been especially true during the continuing financial crisis, with Fannie Mae, Freddie Mac and the Federal Housing Administration propping up the housing market by issuing guarantees for investors on most new mortgages.

But what is the long-term justification for putting taxpayers on the line to subsidize homeownership? Is this nothing more than a sacred cow in American society — a political necessity because so many voters own homes and are mindful of their resale value?

In fact, there is much more to the history of subsidizing housing. While the crisis in the housing market shows that our current approach is far from perfect, there is a certain wisdom behind it, related not only to economic stimulus but also to the preservation of a sense of national identity. It’s important to remember this as we consider re-engineering our institutions as the crisis ebbs.

Read full commentary

3 comments:

  1. You make a valid point. We should take a careful look at where we took wrong turns, as we rebuild our policies and strategies.

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    IT contractor mortgage

    ReplyDelete
  2. You make a valid point. We should take a careful look at where we took wrong turns, as we rebuild our policies and strategies.

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    IT contractor mortgage

    ReplyDelete
  3. It's great that private institutions are stepping up though. I've heard that some even want to refinance mortgage leads.

    ReplyDelete