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]