Housing: Issue just takes time

our opinion
Published: June 27, 2008

So the housing market has plunged and people are having economic difficulties. Many people are losing their homes and other people can’t get loans. That doesn’t mean that the government needs to step in.

But that is exactly what it is considering. The mortgage aid plan might have already passed the U.S. Senate by the time you are reading this. According to the Associated Press, the plan would allow the Federal Housing Administration to back $300 billion in new, cheap home loans for about 400,000 borrowers who couldn’t qualify for government-insured, fixed-rate loans because they are considered too financially risky.

Since part of the reason we are in this housing mess is because of home loans given to financially risky people, this seems like a terrible idea. But even if the people receiving these loans could responsibly handle them, the government shouldn’t get involved.

The housing crisis we are in is an effect of the free-market economy of the United States. It is a natural phenomenon that will correct itself in due time. The federal government has no idea what it’s doing when it comes to the larger economic scheme of the free market, and it should just butt out.

Besides, if the government jumps in every time we suffer the consequences of our actions, then what restraint will we show next time the housing market is booming? Will we remember that our actions last time led us to a housing bust? Or will we just assume that whatever happens, we can expect good, old Uncle
Sam to step in and try to save us?

Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said the following Tuesday:
“We need to demonstrate to people in this country that have lost an awful lot of faith in almost everything, but certainly in (Congress), that we can get something done, that we can put aside differences and make a difference in their lives.”

We wholeheartedly agree with this statement. Congress should do exactly what Dodd said, but not in this way. Be lawmakers. Protect the constitution. Figure out the mess in Iraq. Find ways to legislate more effectively. Yes, restore our faith in Congress. But keep your meddling fingers out of the economy as much as possible.

The beauty of our economic system is that the government is involved as little as possible. Competition and supply and demand determine, for the most part, the strength of our economy. The less an artificial third party is involved in this natural process, the better.

The housing situation will correct itself in time. Let’s not allow impatience and panic to cause us to act. The housing market in the U.S. doesn’t need rescuing, it needs time.