Removing the Economy’s Housing Anchor

The reverberations from the bursting of the housing bubble are still being felt, causing one of the biggest impediments to economic recovery.

In the aftermath of the bust, government actions have either been ineffective or have worsened the problem. Consider these three developments:

  1. The efforts that were supposed to deal with defaults and foreclosures have mostly transferred ownership of non-performing loans from private to government entities. Restructuring has been rare. This has made bank balance sheets look better, but did little to cl.....
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