I have to say we may both be highly cynical but boy oh boy do I see us taking a much different direction at least in the short term. Over the next year I see about a 180 degrees opposite what you stated.
That is, I see a democratic executive and legislative branch. I see tax increases as well as substantially higher spending on social/welfare programs. Indeed I do see the resurrection of depression era programs. I see our government basically underwriting a faltering secondary market in the guise of providing affordable housing as a social benefit when in reality you and I know it is simply to keep an anemic secondary market afloat in the hopes that someday it will be healthy enough to live on its own.
I think there will indeed be programs where the government will help strapped homeowners out by underwriting undermarket financing and basically sending out IOUs to lenders.
In fact I really believe there are no shortages of wild ideas and programs that will involve the FHA, all of the GSEs and even private industry. Once upon a time banks didn’t want to have anything to do with the government. Oh how times are going to change.
My last comment is that the BofA deal with Countrywide is a perfect example of what we will see. Do you honestly believe when BofA took on Countrywide that they didn’t have a plan for the government to bail them out?
Don’t get me wrong because I think in the long run, massive privatization with low taxes is the way out and it makes so much sense. However our country is going to have to get a good dose of Obama or Hillary before anything will happen. Whether it is 4 or 8 years is really the only question.