More housing defaults will occur and the number of homes on the federal government's "asset list" will only increase. The federal government and it's GSEs have citiloads of houses that they cannot get rid of. Most are worthless. What is more worthless than a run-down unmaintained home that is unloved?
The answer to this question is the expected value of your social security pension! Everyone expects THE ponzi scheme to end, to be cut, or to be means tested. Trick after trick has been used to extend its life but now the federal government is in the baby boomer phase where the lines get longer, the payouts grow, and the need for solutions much more immediate.
It seems that the federal government is faced with two crises that cannot be solved, however, might we be able to create a unique solution to both crises?
Lets say you are in the market for a home. You are not in a favored class and you cannot obtain financing from the taxpayer supported TBTF GSE banks. You are an older American who has been paying into SSC for a long time.
Suppose you head down to your Trusty Resolution Coop. The friendly clerk (former TSA) presses a button on his GOVphone and the net present value of your social security payout appears on the LCD desk surface.
You look down at the desk and think wow that much? The former TSA agent hits another key on his GOVpad and a list of government held homes appear. Their values all appear to be roughly similar to the net present value of your social security stipend.
While the value of these homes is quite inflated remember that because of ZIRP the net present value of your social security payout is also hugely inflated!
He hands you a USBless sphere and suggests you take your time selecting one. So many states, so many cities, so many neighborhoods. You leave and decide to do some serious googling. You can go anywhere.
You pick a house and take it in lieu of your social security stipend. The federal government has one less house to get rid of and one less check to cut every month in your old age.
A worthless government owned house has just been exchanged for a worthless government supplied pension. Is this not the perfect match? You now have a fixer upper real asset instead of a broken down paper promise.
The icing on the cake is that we can give TSA agents something else to do with their hands!