"You could write a book just on how poor the coverage has been
of the alleged housing bubble. The media have been foretelling
a massive bust in housing prices for months now... That kind
of ignorance makes homeowners fear that their most expensive
possession could turn worthless overnight. .. That wont happen. "
Herman Cain Wednesday, August 17, 2005
Despite the long-term damage to the economy
inflicted by the government's interference in the
housing market, the government's policy of
diverting capital to other uses creates a short-term
boom in housing. Like all artificially-created bubbles,
the boom in housing prices cannot last forever.
When housing prices fall, homeowners will experience
difficulty as their equity is wiped out. Futthermore, the
holders of the mortgage debt will also have a loss. T
hese losses will be greater than they would have
otherwise been had govemment policy not actively
encouraged over-investment in housing.
Ron Paul, September 10, 2003
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