Americans are in just as much debt as ever, only they owe their housing bills to Washington and not to banks on Wall Street, says Wilbur Ross, chairman and CEO of WL Ross & Co.
The question, Ross told National Public Radio, is "will government be able to re-exit from that, and yet leave the economy intact, or are we moving toward a permanent socialization of the capital markets?"
The Obama Administration has kept an array of financial institutions from going under amid the worst recession in generations.
Stimulus packages, meanwhile, are pumping money into the economy with the aim of easing credit conditions and get the economy going again.
Home sales, meanwhile, showed some signs of stability in June, when they improved from May, but that's nothing to get excited about, according to Ross.
"The end of this problem will come when June compares favorably to June a year ago, and July compares favorably to July a year ago," Ross said.
The Obama administration is putting new pressure on mortgage companies to help financially distressed homeowners.
Specifically, the government is going to publish the names of companies that collect mortgage payments that are behind on working with cash-strapped homeowners.
"There are a bunch of servicers that are lacking in performance. They have to lift their game,” Michael Barr, the Treasury Department's assistant secretary for financial institutions, told the Associated Press.
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