Are we allowed to say sub-prime mortgages?

Come to think of it are we allowed to quote that bromide about people in power (not just the Bourbons) learning nothing and forgetting nothing? Those are the thoughts that go through one's head as we read the following:

The Prime Minister and his deputy, Nick Clegg, will unveil proposals to help first-time buyers of new homes by carrying part of the risk of their mortgages.

They also propose subsidising the construction of 16,000 homes by giving £400 million of taxpayers’ money to property developers.

In a further move, ministers are working on a scheme under which billions of pounds of money in pension funds will be used to finance the construction of power stations, wind turbines and roads.

Would it be too much to expect the people who blithely misuse taxpayers' money to do just a little bit of thinking? Yes, I expect it would. What will happen if those who take out mortgages that will be gaily handed out because the taxpayer will provide, find themselves too deeply in debt to be able to pay their interest?

James Delingpole has a more sinister explanation than just incompetence for this appallingly stupid idea.

Did you know that as part of his initiation for the Bullingdon Club, David Cameron had to steal a fluffy kitten from a kindly old lady called Mabel, barbecue it, and dance round the flaming kitty embers chanting: "Ra ra ra! I'm an Old Etonian and you're a filthy oik, moggy, and that's why I'm having you for dinner," before washing the charred feline down with a lovely bottle or three of Cheval Blanc '47 in readiness for the arrival of the Buller's harem of Russian whores?

Not, you understand, that I have any evidence that this story is true. But Cameron must have a skeleton in his closet of that magnitude, surely? It's the only explanation for the extraordinary grip exerted on him by the house building industry, which has just persuaded him to embark on the most harebrained scheme of his political career: the recreation, in Britain, of President Clinton's Community Reinvestment Act and of Freddie Mac and Fannie Mae.

Possible. For the moment I go with idiocy and economic illiteracy on a monumental scale.

Allister Heath, as ever, manages to connect his hammer with the nail head.

THERE are two ways one can address a problem caused by faulty policies: by tackling its root causes – or by addressing some of its manifestations, and risk creating more issues thanks to the law of unintended consequences which plagues all government actions. Regrettably, when it comes to house prices, the government is largely going for the second option, albeit with a small nod towards the first. There are massive problems in the housing market – but today’s announcement that the government is going to partly underwrite mortgages for first time buyers and move some risk onto taxpayers is a terrible, short-sighted blunder.

Developers will also be able to bid for public money to finish stalled developments: this implies yet more corporatism to fund projects nobody really wants. Have we all forgotten the sub-prime crisis in the US? Over there, politicians concerned that many poor people couldn’t afford homes forced and bribed lenders to lower credit standards and extend mortgages to those who couldn’t afford them. In the short-term, this boosted home-ownership; but it all ended in tears. It is good to care about the poor and young people who can’t get onto the housing ladder; but it is bad to give people false hope, to create moral hazard or to privatise gains and socialise losses in the housing market.

But they will not listen. It will all end in even bigger tears.