The trouble with bailing out homeowners

Wednesday, October 22, 2008

A homeowner bailout now looks more likely than ever. Both presidential candidates, John McCain and Barack Obama, are floating plans to help homeowners stuck with bad mortgages and the threat of foreclosures. But is that the best solution to the problem? New York Times Columnist and Economix blogger David Leonhardt talks about the pitfalls of a homeowner bailout.

Guests:

David Leonhardt

Contributors:

Jesse Baker, Noel King and Melissa Locker

Comments [1]

Bob Gardner

I'm less concerned with the moral hazard of bailing out homeowners than I am with the goal of "stabilizing home prices". That just leaves millions of renters out in the cold.
Renters already subsidize homeowners through the tax code. Many people who bought "homes they couldn't afford" really had very little choice. Remaining as renters meant remaining in an insecure and unaffordable situation with few legal protections, no economic security and unfriendly governments who encouraged the conversion of rental housing into condos as "revitalization."
We need to go back to the goal of safe and affordable housing for everyone (this would include some tenant protections for people in foreclosed property.) It may take a while to untangle this mess, but let's at least start by making sure everyone has a roof over their head.

Oct. 22 2008 12:34 PM

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