Next to healthcare, Foreclosures are probably the next largest issue where "feelings, compassionate" oriented liberals don't allow the facts to get in the way of their preconceived, all important feelings. Through a combination of easy money and phony mortgages fueled in part by Freddie and Fannie, the housing market became vastly overvalued relative to its true value and its value as a function of real people to really own all those houses.
The bubble burst in part because one day someone discovered there was no underlying value commensurate with the prices being demanded. Then the whole house of cards started to unravel and because of some wacky reserve rules imposed on banks after Enron, bank balance sheets disappeared.
In a normal course of events, the overvalued commodities (houses in this case) would sharply decline in value to a point where perceived value was more in line with actual value and at the same time became attractive buys to buyers again.
That some honest people might lose homes is possible. But the people who typically get sheared are speculators, those who bought way too much house for their means, and those who had the phony mortgages and were waiting on divine intervention to save them from themselves.
But no, here comes your liberal, and bankrupt Government to the rescue. What is the Government solution? Why bailout the owners, make sure the houses don't go into foreclosure thus preventing the value reset to take place. And this, then prolongs the problem because the market remains distorted in a high value plateau. And on and on and on.
Read it all here.
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