The Senate, according to this, is thinking about several measures to boost the housing sector. Why on earth would we possibly want to do this? The whole point of the financial crisis was that the housing market was way over-valued, and the realization of this led - all at once - to a big drop in housing prices and put a lot of banks in a bad position. But that doesn't mean that the drop in housing prices was unwarranted!
The problem with a financial crisis/recession is that not only do the financial Einstein's who made the wrong bets on housing get hosed, but so do lot's of innocent people in the rest of the economy. So I understand the need to stimulate the economy and cushion the blow to those innocents. This may require us taking stakes in banks or bailing them out. But I don't understand how trying to re-inflate the housing bubble has any value whatsoever. We want to ease the transition into a future in which real estate is fairly valued, not over-valued.
This all just sounds dumb, but then again it is the Senate.
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