Crisis Averted! Now how do we get the government out of the housing market?

by Alex Stenback on September 15, 2009

Image via WSJ

Now that the financial and real estate markets seem to be on the mend, attention turns to the cleanup – and the question on many minds is: How does the government exit the housing market (which for better or worse, it now owns – with some 80% of all home loans issued now carrying some sort of government imprimatur) without screwing it up.

The that end, the Wall Street Journal Today has up a lengthy piece, detailing the many pitfalls and possible plans for getting the housing market off the public dole. 

 The whole thing is worth a read, but mostly the story is replete with tales – from home builders, to banks, to other experts – who take great pains to emphasize that any recovery they are seeing may quickly vanish if the punch bowl is taken away.

“Every government in the world takes a role in its country’s housing market,” says Lawrence Summers, Mr. Obama’s top economic policy adviser. “What that role should be when normal conditions return is a crucial question we’ll all be considering in coming months and coming years.” He added: “It’s clearly going to take time.”

In other words: Expect this can to get kicked down the road for a looo-oo-oong time.
No Easy Exit For Govt as Savior [WSJ]

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