Affordable Housing and the Financial Crisis (1 Viewer)

There is an exquisite irony with the financial crisis.

Democrats, such as the incoming administration are all for helping the poor. Prior to the Republicans taking over, the Democrats where able to establish programs to assist (subsidize) the poor with buying their American dream home.

We then entered an era of cheap money which allowed the people to buy houses easily so that they could have the American dream. This drove up the price of housing eventually making housing unaffordable. It also turned out that the buyers were not even able to afford their housing. The bubble began to burst.

The housing bubble has now burst and housing prices are collapsing. The New York Times wrote: "Weighed Down by Foreclosures, Home Sales Fall". The Times reports that home values fell in 120 of 152 metropolitan areas. Guess what we are getting now - affordable housing.

And what does our government, especially the incoming administration, want to do about it????? They want to protect housing prices!! So here we have a situation where housing prices are falling, which makes housing more affordable. Affordability has been a Democratic quest. Instead of celebrating the return of affordable housing the government is are now trying to artificially prop-up, at taxpayer expense, the value of housing.

If housing prices are artificially propped-up, guess what the solution will be? Why new subsidy programs (at taxpayer expense) to help the disenfranchised to buy their well deserved American dream home.

I generally think of myself as a liberal in most areas, but in the area of government spending I am very conservative. We have seen the results when a Republican administration (who should know better) started messing with the money supply. Steve has explained the consequences.

It is not a right for every family to own a detached house. Many families bought into this fallacy and we now see the results. A lot of them just walked away when they realized that they owed more on their dream home than it was actually worth.

Supply and demand should be the final yardstick for the worth of any item.

I do not see it as a case of owing more than a house is worth, it was being squeezed into a financial proposition that someone would never be capable of paying off. A lot of the practices that were employed used to be called loan sharking, howerer, with government blessing it was permitted as accepted credit practices.
The sad part is that people got suckered and the government will just jump in and bail out the load sharks and do little to help the victims of the scheme.

Best part of the bail out is being invited to the BAIL OUT BASH to help get rid of some of the emergency funds.
http://www.chicagotribune.com/news/opinion/chi-1009edit2oct09,0,4386282.story