Saturday, January 02, 2010

Let the Market Work - Government is Part of the Problem

See January 2, 2010 The New York Times article by Peter S. Goodman
"U.S. Loan Effort Is Seen as Adding to Housing Woes" at

"The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes. "
A question asked to Treasury Secretary Timothy Geithner “Are we creating a program in which we’re talking about potentially spending $75 billion to try to modify people into mortgages that will reduce the number of foreclosures in the short term, but just kick the can down the road?” she asked, raising the prospect “that we’ll be looking at an economy with elevated mortgage foreclosures not just for a year or two, but for many years. How do you deal with that problem, Mr. Secretary?”
A good question, Mr. Geithner conceded. “What to do about it,” he said. “That’s a hard thing.”

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