[lbo-talk] Dean Baker: let house prices fall further

[Jordan Hayes]

>> I think that what Fannie and Freddie should do ...

... is not quite this, but it's an interesting proposal:

http://online.wsj.com/article/SB122833771718976731.html

WASHINGTON -- The Treasury Department is considering a plan to 
revitalize the U.S. home market that would push down mortgage rates for 
home loans, according to people familiar with the matter.

The plan, which is in the development stage, would temporarily use the 
clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks 
to lend at rates as low as 4.5%, more than a full percentage point lower 
than prevailing rates for a standard 30-year fixed-rate mortgage.

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