Government shouldn’t mess with mortgages again
Government tinkering with the mortgage market helped bring on the deep recession from which Americans are just now emerging. Yet during his weekly radio address, President Barack Obama said the government needs to take steps to boost the housing industry.
Among those he recommends are allowing everyone to refinance homes at low interest rates, providing more aid for first-time homebuyers and expanding affordable rental housing.
At first glance the actions may seem desirable. And details of precisely what the White House has in mind have not yet been revealed.
But in essence, Obama seems to be insisting that the housing industry needs an infusion of new home buyers and apartment renters aided by cheap mortgages and low rental rates.
For too long, the government pushed that philosophy on banks, which reacted by handing out mortgages to millions of people who simply could not afford the monthly payments. That contributed heavily to the crash of 2008.
If Obama is thinking of anything like that policy now, Congress needs to reject it. One economic collapse partly caused by government tinkering was plenty.