Thursday, September 24, 2009

Do We Get It?

An article in today's Wall Street Journal discusses actions of the Fed to encourage home buying. These include keeping interest rates low, buying up mortgage-backed securities, and exptening a mortgage-purchase program. The current crisis began when the bubble in housing prices burst. Some adjustments were needed in housing and mortgage markets. Is continuing to subsidize housing and increasing the extent of subsidization really in the best interests of generating a sustainable recovery? Will we revert to an over-reliance on debt?

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