It seems like it should be really apparent, to me. But, maybe, to other people it's not so easy. Let me explain....
The subsidies of housing by the FHA,HUD and VA along with the Community Reinvestment Act have conspired to raise housing prices artificially for decades. Add to this, rent subsidies to many, through programs that give a guaranteed check to landlords. This keeps existing housing off the market and in the hands of fewer and fewer landlords while artificially inflating the housing market.
Then you get the bubble.
This killed the dream of home ownership for many americans that can't afford payments on housing priced that high.
Now they are proposing more subsidies as the cure for the ones they have already enacted.
This will reinflate the market again in an era of bank instability where few will be able to afford the payments yet again. Then they will propose another subsidy.
Layer after layer of government trying to cure itself.
It's like a child picking at a scab.
Everybody is screaming "YOU"VE GOT TO DO SOMETHING!"
Here's the real cure:
Repeal ALL of the subsidies NOW!
Quit picking at the scabs and let them heal.
added to 2/16/2009, the following:
A fellow debater on Political Forum (Martel) pointed out that ARM's were also responsible for this bubble.
Taking an ARM is not a good sound financial move in the first place.
No con artist can succeed trying to scam an honest man. If those people hadn't lied about their ability to pay, they wouldn't be in this fix. You can stop trying to place all the blame on the Big Bad Banks. I think this is a result of everyone in this country having "eyes too big for their stomachs", as we say down here in Tennessee. Times were good and nobody was looking to the future. I do however agree that ARM's had a lot to do with it.
On top of the ARM's we have deductible interest for home loans that inflated the price of homes too. This is a Kenesian move by the banking industry and socialists (of all stripes) enacted to insure that the "pure poor" can afford a home. It amounts to the rape of the federal treasury by the banking and home construction industries.
We need to eliminate these and all other deductions and drop the regressive practice of the Income Tax in favor of the Fair Tax.