The 2nd Biggest Government Help ever?

No Government and politician intent to do bad for their country. In our "Modern Society" we expect help from Governments in anything and everything... and hence they do their best to please us and of course to remain popular. They talk very positive, take initiatives to help people. Here is the case study of one such "Big Initiative" from government that's not the biggest but perhaps 2nd biggest help ever.

Back in 2002, redefining American Dream, Then President George Bush declared an initiative that will help Americans become Homeowner. He bought Real Estate Industry, Mortgage Lender, Insurance Companies together and very openly encouraged home ownership.

1) He removed down payment "barrier" by "American dream down payment fund". 

2) Provided Tax Credit for single family home for 1st time buyer.

3) Simplified process that had complex "rules and regulations".

4) Made it feasible for people with poor credit rating to buy home.

He called it America's Home ownership challenge and Funded this help by hefty 440 Billion USD. In 2002 Goal was to make 5.5 Million People Homeowner. Here it is in his own words.

It was a great initiative it became key catalyst for Major economic boom form 2002 - 2007. Most importantly it helped driving home ownership as well. If you see in graph below, Home ownership grew by almost 1.5 % ~ 4.6 Million which was in direction to Target President had set i.e. 5.5 Million that too in matter of 2 years.

US Housing Graph Home ownership back at 1998 Level and continues...

Now, everyone know it didn't last long......... and how it became the "root cause" of 2008 Economic collapse, Lehman Brother, AIG episode, etc..etc....etc..........

Irony of the story however is despite creating "new 5.5 Million" Homeowners, this "help" resulted in "total 8.6 Million" people to lose homes..to make it worse 4 Million people had homes in 2002 before this speech and initiative. . 

On a different thought.. probably Government had a chance to increase home ownership by considerable percentage if they would have allowed real estate balloon to freely burst. It would have been an economic catastrophe however once it would have reached bottom, home prices would have reached so dirt cheap level that probably everyone would have been homeowner without much  debt at all. 

Anyways.. before closing I think let's speak about biggest help ever. While Bush's help started with 450 Billion USD in 2002. this started with 1 Trillion in 2008 and has already reached 2 Trillion (officially). Some argue that it's actually 9 Trillion. For common man like me both figures are beyond comprehension.  But it's definitely much higher than 2002 help. So let's see what results we get down the road of this "help". Let's hope it goes right this time; as that's what we will like to hope in 2011.