OK, too many acronyms in that title. But when the International Monetary Fund, in its new US economic assessment, points out that “[a]ggressive implementation of the measures proposed by the Administration to speed up the housing recovery could yield sizable benefits to the broader economy,” perhaps policy makers should pay attention. I mean, these folks aren’t exactly radicals.
To their credit, the IMF notes the importance of principal reduction measures, a consistant theme here at OTE. Moreover, they recognize the need for “…the participation of the Government-Sponsored Enterprises in the principal reduction program.”
So, what’s happening here? Someone needs to speak up.
To the FHFA (the GSEs regulator): enough with the foot-dragging! If you
want to see other people don’t intend to take the White House up on their pumped-up incentives under HAMP to write down principal, than say so and stop dangling the possibility.
To the White House: Is there really nothing you can do to get the FHFA to try this? Recess appointment?!? Anything…Anyone…Bueller?!?
A couple of other notable points from this really quite thoughtful summary by the IMF:
–They predict our growth slog to continue for awhile, with real GDP growing 2% this year and 2.3% next, and with the jobless rate hovering around 8%.
–They are appropriately worried about the fiscal cliff and its impact on a wobbly economy, and call for a quick deal. But before any policy makers try to use that as an excuse to kick everything down the road for another year, be aware that they’re also very solid on the need for that deal to include new revenues.
–Considering this is the IMF, they’re pretty non-austere in this assessment, suggesting that any fiscal contraction needs to be gradual and weighed against the continued need for government and Fed Reserve support to offset ongoing weak demand conditions.
–There’s even a plug for implementing the Volcker rule (with the correct warning that “[i]n drafting the final rule, regulators need to be mindful that its effectiveness could be hindered by exemptions…”)!