The Latest Myth About the Government’s Mishandling of the Housing Market.
No matter how many times people debunk the notion that government policy created the housing bubble, it doesn't die. It's part of what the blogger Barry Ritholtz has called the "big lie " of the financial crisis. Now, we are having another argument about whether the government is creating a new housing disaster for taxpayers.
The target this time: the Federal Housing Administration, the government's mortgage insurer mostly for low-to-moderate income and minority borrowers. Late last year, the F.H.A. issued its annual report  to Congress. According to estimates, over its lifetime, the agency would have to pay more out on the mortgages it has insured than it has taken in. The report estimated the potential shortfall at $16 billion, which is a lot in absolute terms, but minuscule in relation to the federal budget  and the $1.1 trillion F.H.A. portfolio.