The U.S. housing market continues to look for a bottom. Talking on CNBC today, economist Ken Rogoff said the government must address housing if it hopes to facilitate deleveraging. He said he would like to see the government grease the wheels and in some way help clear the housing market:
“Well, I mean, at the core of it I think it’s still housing debt and foreclosures. Having some sort of broader, more aggressive write-down in mortgages with a quid pro quo – you give up the upside on your house and some percentage – [would help].
…To grease the wheels of the deal, I’d rather see debt that way than debt the way that we’re doing it. I mean, I think that would be reasonable. It is real complicated. There are millions of mortgages. They’re all a little different.
…You have to have a quid pro quo. There has to be something. If you go take a debt write-down, you’re giving up something on your house. I don’t think there’s anything pretty. There’s a lot of microeconomic evidence looking at different regions in the country that really underscore that the housing is a big feature of the credit bubble…”
Watch the entire interview at CNBC: