The “administration is considering several new ideas to help shore up the struggling housing market.” That’s scary.

Most of these government programs are a waste of money, for example, the $8,000 first-time home buyer tax credit last year. That $8,000 program (the brain child of the National Association of Realtors) caused home prices to increase – possibly by more than $8,000 in Arizona – so home buyers would have paid less for their homes without the program. It was a terrible program because home buyers didn’t benefit much and it cost a ton of taxpayer money.

The program did benefit home sellers. Who would the big home sellers be in the United States? Oh yeah, the big banks benefited with an $8,000 government subsidy to every new homeowner who bought one of their foreclosed homes during the program. Just what the banks needed, another government subsidy.

And the $8,000 first-time home buyer subsidy was worse than “Cash for Clunkers” because the $8,000 program delayed the housing recovery by maybe a year and in that way the program delayed the U.S. economic recovery by a year.

A New Refi Program?

The report goes on, “… one proposal would allow homeowners with government-backed mortgages to refinance them at the current, lower interest rates.”

Okay, I’ll bite. Why can’t homeowners refinance at current, lower interest rates right now all by their little old selves without the government subsidizing it?

See also The Wall Street Journal.