Have we learned? When government steps into to help business, to help home owners and help the uninsured, where are we headed?

The NY times today came out and said the next big bail out could be to the FHA. The Federal Housing Administration’s asset pool for last year has serious problems, 20 percent are in foreclosure and 2007 loans have a 24% default rate. Is this any different than Fannie or Freddie which used $96 billion treasury dollars? The agency now insures 5.4 million homes or $675 billion in property.

These loans are all bundled up into mortgage backed securities which are covered by bonds held by Ginnie Mae. The only worried party would be the taxpayer as the debt will be covered in future taxable income because the losses are estimated to be over the $30 billion cash reserves the agency accumulated.

Not to worry the FHA is only financing about 6,000 homes a day with little or no money down based on the $8,000 tax credit. In fact some home buyers are able to get in a new home with a little money in their pocket.

The grand total of mortgage holders in default? 410,916 compared to 232,864 last year. Maybe there is a nobel prize available in economics for our fearless leader. We shall see.