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I wasn't suggesting that the Federal government save the world, or even the balance sheet of every single citizen. But what is clear is that if you are a homeowner who wants to do a short sale and get rid of a property, even if you can take the loss yourself, there are still no buyers. The market is in an insidious downward cycle, and this makes it impossible for anyone to even take an orderly loss. Investors have cash on the sidelines, but they aren't seeing an end to the decline so the big money isn't buying up available inventory.

I think the key to clearing the balance sheets of individuals caught in this trap is to first stabilize market pricing. Then, over time, implement programs that make it easier for sellers to liquidate and take their losses. The market will do all of this on its own over 10 to 15 years, just like it did in the 1930s, just like it might eventually do in Japan. If you don't mind wasting a quarter of a century, let's let the free market work its magic.

I agree with you that the government should not buy properties that require heavy service / maintenance.
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