Republicans have failed to offer realistic policies to help underwater homeowners and stimulate the housing market
It takes poker-champion nerves to ride into the country's foreclosure capital, bask in the bright lights for a day, then skip town without tossing so much as a $5 chip toward the housing crisis that is keeping the economic recovery tied up in the desert. But that's what seven Republican presidential candidates did in a televised debate from Nevada this week, dodging questions about falling home values and repeating long-discredited whoppers about how economic growth alone--or squashing government-backed mortgage lenders--can heal the housing market.
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Rep. Michele Bachmann seemed to speak for the group when, asked about helping Nevada residents keep their homes, she wandered through motherhood, foreclosure, and job loss before wrapping up with a vague promise: "I will not fail you on this issue," she said. "I will turn this country around. We will turn the economy around. We will create jobs. That's how you hold on to your house." Others chose to discuss the Troubled Asset Relief Program. No one on stage offered anything better--or more specific.
Reverting to platitudes might seem a gutsy gamble in a state that has led the nation in foreclosures for 56 months, but it's nothing new for a GOP field that has essentially avoided the most pressing economic issue in America today.
More and more research suggests that the U.S. economy won't grow at a good clip until home prices break their free fall and start creeping up again. "The enormous gap between current home prices and those that seemed plausible when mortgage contracts were written is at the root" of the economy's woes, reported economists from Barclays Capital this week. "Until the pipeline of foreclosures and distressed sales is resolved, a protracted period of cyclical weakness is indeed in store." A study published earlier this year by the Federal Reserve Bank of San Francisco found that after the Great Recession, employment growth has returned much more slowly in counties where homeowners piled up debt during the housing bubble, compared with counties where debt levels remained relatively low.