$25 billion in National Mortgage Settlement and other policy efforts have worked to prevent the real estate market from clearing.  At the same time, these policies have harmed those who have done the right thing.

The fat years of the housing bubble lasted from 1999 to 2006 - seven years. The bubble was deflating by the beginning of 2007 and collapsed into the panics of 2007-09. Since then we have been struggling in its deflated wake. If we get the Biblical sum of seven lean years, the housing and related debt markets will bottom in 2013 - not a bad forecast. 

The federal government has taken over large swaths of consumer lending, most notably the $10 trillion home mortgage and $1 trillion student lending markets. The government's share of new loans for each now approaches 100%.Government monopolies in financial services pose risks to taxpayers as well as borrowers

Government housing policies and the toxic mortgages they spawned were the sine qua non of the financial crisis.

Three years into the nationalization of housing finance by government-sponsored entities Fannie Mae, Freddie Mac and the Federal Housing Authority, it is time to start reducing their footprints. 

In less than twenty-five years, government “affordable housing” and other housing policies have turned a healthy market into a financial ruin. Until Fannie and Freddie’s market dominance and the government’s role in the housing finance system are substantially reduced or eliminated, the United States will continue to have an inferior and unstable housing market.

It's always painful to take on the myths and ideological narratives of the left. The pundits of the liberal (excuse me, "progressive") media make a pretense of listening to reason, but when their views are challenged, they become abusive.

As the US debt continues to grow, HUD officials still fail to own up to the massive liabilities on their books that could cost taxpayers mightily. In a point by point refutation, Wharton professor Joseph (Joe) Gyourko responds to HUD's attack of his recent AEI report.