The FHA is almost out of money, so the federal government is going to tax or borrow almost a billion dollars, so that the subsidies can continue.
You wouldn’t want a free market in housing would you? You would not want supply and demand to set the price of homes, would you? Of course not.
The housing market is a government-funded housing market. The mortgage market has a Bad Housekeeping Seal of Approval stamped on it. It was nationalized by the Secretary of the Treasury in September 2008, and it’s going to stay nationalized.
The Federal Reserve is counterfeiting half a trillion dollars a year in brand new digital money to keep the housing market “healthy.” This is the basis of the housing recovery. Without this, the housing market would be in the intensive care unit.
This is capitalism, USA. This is Uncle Sam’s version of It’s a Wonderful Life. This is Jimmy Stewart handing out his honeymoon money to depositors. But there is this difference. It’s not honeymoon money. It’s retirement money. And there is also this difference. It’s not his money. It’s yours.
What’s the problem at the FHA? It’s almost out of money. But what about all those loans it made? Too many of them have gone bad. Sorry about that.
For four years, the FHA has assured Congress that this was not a problem. Sorry about that.
What will Congress do about that? Hand out our money, of course. Congress will blame the FHA for making all those bad loans. It will blame the FHA for having misinformed Congress. Then it will reward the FHA to the tune of about a billion dollars. Lesson: nothing succeeds like failure.
How much money has it lent out? Over a trillion dollars.
Will this ever end? Not until the Great Default.
At the very heart of the American Dream is the American Lie. The federal government is going to renege on its promises. The government is headed for default. Sorry about that.