businessweek.com August 16, 2010, 12:30 PM EDT
By Lorraine Woellert
Aug. 16 (Bloomberg) -- The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up.
The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive down home prices, increase foreclosures and slow the economy, housing advocates and industry participants say. At the same time, some lawmakers say it’s time to close government-controlled loan guarantors and halt limitless bailouts.
“It’s like building an airplane while you’re still flying it,” said David Ledford, senior vice president of mortgage finance at the National Association of Home Builders in Washington. Housing investments and related services account for 15 percent of gross domestic product, according to the group, ranking the industry second to health care.
Cartoon compliments of The Comic News
Ending the senseless wars, raising taxes on the rich, and starting a massive public works program focusing on public transportation would do wonders for the economy. Yet, the Fed, the White House, and the Congress strenuously avoid even mentioning these options.
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