>American Enterprise Institute – Why The Next Housing Crisis Is Already Underway
by Donna S. Robinson – 22 March 2012
Like a cancerous tumor that just won’t go away, another housing crisis is growing ever larger. It’s a debt tumor, fed by the blood that flows in the form of government insured mortgages which are in essence nothing more than taxpayer backed guarantees for Fannie, Freddie, USDA, and FHA, to name a few.
This article quotes heavily from the work of Mr. Edward Pinto, A Resident Fellow of The American Enterprise Institute, and a former executive of Fannie Mae. The entire 15 page report is available here if you’d like to read his detailed analysis. (Thanks to Mr. Pinto for kindly providing me with a copy of his testimony.)
Mr. Pinto has an excellent insight into the problems inherent in government insured mortgage programs, the “politicizing” of U.S. housing policy, and how this led to the first housing crisis. His analysis of what he has termed “the government mortgage complex”, demonstrates why the proposed government solutions to the current crisis are not going to solve the problem, but will merely add another housing crisis to the existing one. He also demonstrates why the current crisis continues to drag on, and shows that it’s largely because of misguided government policies and political deal making that fail to address the underlying causes, while attempting to please a variety of special interests, from “affordable” housing advocates and the finance and banking industry to the real estate industry itself.
