Well, it looks like many more billions of dollars will be spent to aid the nation’s housing market in what is, in large part, an ultimately futile attempt to keep home prices above where the market would like to take them.

Freakishly low interest rates and $8,000 or more in tax credits for homebuyers apparently hasn’t done the trick, so the White House today is launching a new program to help homeowners who can’t afford to stay in their house by lowering payments through government subsidized financing and, in some cases, reducing mortgage balances.

Not long ago, a commenter here noted the following:

I feel that another leg down is inevitable. I also think the government will try to intervene which may keep us in limbo for longer than necessary. The end could come and we could get back to business in a more stable, albeit lower price level, market if the government would just get out of the way. It is much harder to sell or rent in a market that is still trending downward or where there is a lot of lingering doubt. If we could reach a bottom and have prices stabilize on their own for a few months without any government action, it would become obvious to all that the worst truly is behind us and then all the pent up buying could come back. But as long as the market is being propped up superficially, the skeptics will continue to wait on the sidelines making recovery impossible. We need to bottom and start over so we can develop business models that will work. With the government involved and more bad news waiting in the wings, it is impossible to make long-term plans. The economy will just have to wait until the government gets out of the way, IMHO.

Unfortunately, that doesn’t appear to be one of the options now being considered…

While I’m as sympathetic as anyone about a family down on their luck after job losses and a collapsing real estate market, this misplaced notion of the sanctity of homeownership and how people losing their houses to foreclosure is somehow such a terrible tragedy is ultimately doomed to make things much worse than they would otherwise be.

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