The Treasury Department is apparently considering a plan to push mortgage interest rates down to 4.5 percent as a way to boost the housing market. Is this a good idea? The Post talked to a former Fannie Mae executive and a housing analyst, but no one who was competent enough to notice an $8 trillion housing bubble before it burst. Had they gotten a more diverse range of viewpoints, they might have found someone who told them that propping up the housing market with a temporarily low mortgage interest rate may not be very clever policy. Of course some folks didn't think that pay option ARMs were a good idea. [The WSJ also couldn't find anyone who was capable of seeing an $8 trillion housing bubble.]
--Dean Baker
