GOVERNMENT: DUMB BEAST LEARNS NOTHING!

35 Billion Reasons The Crisis Has Taught Gov Nothing

Daniel Indiviglio, TheAtlantic.com: The Wall Street Journal is reporting today that the Obama administration is on the verge of committing as much as $35 billion in financing and subsidies to provide mortgages to low- to moderate-income families. Hmm... this sounds vaguely familiar. The government subsidizing the mortgage market making credit artificially easy -- oh yeah! That was one of the reasons why the mortgage market overheated, and we fell into a deep financial crisis. Have we learned nothing?

Here's some detail from WSJ:

The effort, which could be announced as early as this week, is aimed at relieving pressure on government-operated housing finance agencies, which have been struggling to find funding amid the downturn. These agencies, or HFAs, are a small part of the housing market but are critical to many first-time and low-income home buyers, who can get lower-rate mortgages through an HFA than they could through a private-sector lender. Rates are typically 0.5 to one percentage point lower than commercial lenders.

Here's some more explanation what this cash will do:

The Treasury Department, along with government-controlled mortgage giants Fannie Mae and Freddie Mac, is expected to buy as much as $20 billion of new housing bonds issued by the state agencies. It will also provide $15 billion in additional funding, as needed, to help the agencies continue to use a type of cheap, short-term financing.