[quote=SD Realtor]It doesn’t matter how long. In fact all the trillions we have used to prop up the current lame scheme could have been used to help these poor old people you refer to. Instead under the current scheme housing is way overpriced, wall street continues to make record profits and the debt for all of these overpriced assets is still backed by the taxpayers.
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I think it does matter how long. I think you’re making the argument (and correct me if I’m wrong.) that if the Federal government (directly and indirectly through it’s agencies and the GSEs) took a hands off approach, and let the real estate market take another tumble quickly, that somehow there would be a recovery to normalcy faster than the current approach. That kind of extreme dynamics in the market would hurt. (I think you’ve acknowledge that.) The social pain would be enormous, and the current political climate would virtually insure that entitlements would not increase substantially. I’m not sure why a return to normalcy could be any faster than the current approach. We won’t create households any faster. We won’t need more houses in 5 or 10 years because of that approach.
I’m not ecstatic with any of the individual programs which have slowed the resolution of the market overhang. But I’m also not convinced that anything could have been done to make it better. As a whole, I think they’ve worked.
