Debra J. Saunders

The first would privatize housing finance and leave a narrow role for government. Its downside: It will be harder and costlier for Americans to secure 30-year fixed-rate mortgages.

The middle option would add "a backstop mechanism to ensure access to credit during a housing crisis." Same downside as the first option, with a larger government role.

The third option would provide government reinsurance for certain mortgages, which, as the Wall Street Journal warns, "looks like Fannie in a new suit."

The boldest element of the report can be seen in the Obama administration's flinty look at the vaunted goal of homeownership for all. President George W. Bush certainly had no problem pointing to high home ownership rates as proof of his administration's success.

The report recommends policies that, instead of pushing mortgages for all, demonstrate "a commitment to affordable rental housing."

Here is an area where left and right can meet. On the left, Politico columnist Michael Kinsley has questioned the wisdom of policies that drive up housing prices -- and make homes harder for young families to afford: "There is no physical reason why a house should become more valuable at all. It is not like growing a crop. It is not producing anything that you can turn around and sell, like a factory. It just sits there. It becomes more valuable because people believe that it will become more valuable."

For their part, conservatives question the wisdom of using taxpayer-backed loans to push people who are chasing the American dream into homes they ultimately cannot afford. And by the way, those loans fueled the housing market bubble.

As the Treasury/HUD report noted, trillions of dollars were bet nationally and globally on "the faulty expectation that national house prices would only rise. Twenty years of economic stability had desensitized every player in the housing market to the possibility that home prices could fall."

That's a strong argument for policies that keep U.S. taxpayers from being left holding the bag.

Debra J. Saunders

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