The shortcomings of the Johnson-Crapo plan
AEI - May 2, 2014
As the Senate Banking Committee considers the pending Johnson-Crapo housing finance reform bill, the bill has several fundamental shortcomings.
The current plan will continue the broad and deep government guarantee for virtually the entire housing market, a guarantee which is fraught with problems for the future. Government guarantees of all types have not performed well over their history. When the private sector puts their own capital at risk, they eventually have to correct and take their losses. The government has a history of accumulating losses and postponing corrective action. Market stability would be enhanced with the private sector in a position to take those losses instead of the taxpayer.
Read More – The shortcomings of the Johnson-Crapo plan