Until the bubble hit. And then it wasn’t such good times; in fact it was bad times. Really bad times.
The housing bubble hit all of us in some way or another. For many of us, our homes are worth less now than they were before; we still haven’t caught up. And the economy? Well, we know how THAT has played out. So, with the the downside of such a bubble being so, well, down, the lessons we learned just a few short years ago should still be fresh. Should still be pertinent, right?
We haven’t learned the lessons from the past. In fact, you could say there WERE no lessons learned at all; it’s been business as usual. Which, when you have people who keep their jobs by winning votes running things, shouldn’t surprise you.
For the last three years, federal agencies have backed new mortgages as large as $729,750 in desirable neighborhoods in high-cost states* like California, New York, New Jersey, Connecticut and Massachusetts. Without the government covering the risk of default, many lenders would have refused to make the loans. With the economy in free fall, Congress broadened its traditionally generous support of housing to a substantial degree.
Is there no hope? Can we actually stop the madness? Maybe:
But now Democrats and Republicans agree that the taxpayer should no longer be responsible for homes valued well above the national average, and are about to turn a top slice of the housing market into a testing ground for whether the private mortgage market can once again go it alone. The result, analysts say, will be higher-cost loans and fewer potential buyers for more expensive homes.
Michael S. Barr, a former assistant Treasury secretary, said the federal government’s retrenchment would be painful for many communities. “There’s always going to be a line, and for the person just over it it’s always going to be an arbitrary line,” said Mr. Barr, who teaches at the University of Michigan Law School. “But there is no entitlement to living in a home that costs $750,000.”
Not a bad start. At least these people understand that we can’t continue down this path. When the government backs loans, people make bad decisions. They are much less careful with other people’s money than they are with their own.
So, when the government says that we’re no longer going to back loans more than $750,000, that’s a good thing. Well, a goodish thing. The problem is that pesky little comment quoted by Mr. Barr:
“There’s always going to be a line, and for the person just over it it’s always going to be an arbitrary line,”
Fair enough. And while I think that houses costing more than $750,000 is over that line, I would like to go on record saying that even THAT line is too generous. If it were up to me, MY statement would be:
There is no entitlement to buying a home that costs ANY amount of money.
There. Pino’s line.
* By the way, note the states receiving these loans. All of ’em, every one of ’em, MASSIVE Liberal havens.