ozzy43

Freddie and Fannie: Living in the Past

Nicely put, Lex.

I would add the following: the entire argument above is premised upon the notion that increasing the rate of home ownership is an unalloyed good in all ways and for all concerned - for the economy, for individuals, for families and communities, etc. I do not think things are anywhere near this simple, and I positively assert that that premise is debatable, and in my view wrongheaded. Not least because malinvestment and market/risk distortion - which is what Fannie and Freddie represent - always leads to pain in the end. And the longer we postpone this pain - Lex's apt the 'great unwind' - the more severe it will be. And we certainly seem determined to postpone it just as far and as hard as we possibly can, praying for a miracle to deliver us from the towering wall of pain that is headed straight for us. If the past is any guide, we will somehow figure out a way to make sure that most of the pain falls on our children and grandchildren, just like most of our debt will. That's what you get for trusting politicians.