Can the Government Help the Housing Crisis?

 

Rep John Beohner on the CBS program, “Face the Nation” (Image Source: CBS)

Readers of this blog likely know that over the last few years, the government has experimented with several programs that aim to alleviate the mortgage foreclosure crisis and in turn, bolster the housing market and the U.S. economy.  However, it’s no secret that many of the government’s flagship programs, like the Home Affordable Modification Program (HAMP) and similar initiatives administered by various federal agencies, like the Department of Housing and Urban Development, have fallen short of their stated goals.

However, in spite of all of these setbacks, Americans and their elected representatives by and large have maintained a sense of optimism that the housing market and the economy will recover, until recently.  While some skeptics posit that the housing market is permanently beyond its golden days, others address their criticism at the government, as they’ve lost hope in its ability to make a dent in the crisis. 

Take, for example, Republican House leader, John Boehner.  On the CBS Sunday morning program Face the Nation, Boehner stated bluntly that he has given up on the government’s ability to mitigate the crisis.  Boehner said that at the time of their initial approval he was skeptical that any of the federal housing initiatives would succeed.  He went on: “I’m even more skeptical today that there’s anything the government can do to resolve these problems.  Boehner’s skepticism, predictably, comes with a more optimistic caveat:

“Over the last couple years, Congress has really set up four programs to help with those mortgage problems,” Boehner told Harry Smith. “And unfortunately, none of those have worked. And all they’ve really done is dragged out the length of time for the market to clear the problems. Which is unfortunate.”

In addition to suggesting that the government programs have no chance of succeeding, Boehner simultaneously indicates that the market proffers the sole plausible solution to the crisis.  The Republican leader again presents the public with the ubiquitous dichotomy of market vs. government, whereby the two entities are necessarily mutually exclusive.

Contrast Boehner’s view with that of President Obama.  About a month ago, Obama delivered a speech hailed by many as the first comprehensive illustration of his policy vision for the nation.  While cautioning the nation about the increasing deficits, Obama outlined a boldly progressive stance, contending that in addition to utilizing the government to attain a collective set of liberties, like access to healthcare, public schools, and a strong military, “part of this American belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security.” Does affordable housing constitute a “basic measure of security?”

Here, we see the vivid juxtaposition of two visions of the government’s role in society articulated by two of the nation’s leading public figures.  Moreover, this blog has commented frequently on the government’s housing initiatives.  While St. Ambrose welcomes government programs, we have been clear in pointing out there failures. In our view, many such failures have regulatory in nature, suggesting the need for more government, not less.  Nevertheless, if the economy is rebounding, perhaps this revival in prosperity will trickle back to the housing market, triggering a growing demand, increased properties values, and prosperous communities.

So, we invite readers to comment: can the government fix the housing crisis?


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