Bad Housing Solutions, They Keep Coming
Lance on Dec 19 2008 at 3:54 pm | Filed under: Government policy, Housing Market, economy
I have already given the only measure that I think makes sense when it comes to the housing crisis, but people keep coming up with others. Like most of the ideas coming out to deal with this crisis, Glenn Hubbard and Charlie Mayer try to convince us that the way to deal with our credit and housing bubble is to reflate it. Felix Salmon tears into this idea, and he should. Higher housing prices, and lower rates on mortgages is not the answer, and he details exactly why. Read the whole thing.
The cure for our housing crisis is prices coming down and all the pain that comes with it. Making them “affordable” through extra low interest rates just creates a new crisis down the road.
