U.S. Can Rent Its Way Toward a Housing Recovery: Peter Orszag

Oct. 5 (Bloomberg) -- After any financial collapse,housing plays a key role in the hard slog that typicallyfollows: a weak housing market feeds into a weak economy,which then feeds back onto a weak housing market. So evenif the European banking system somehow avoids a meltdown,economic recovery in the U.S. will continue to languishunless we act more aggressively on housing.

No matter what the government might try to do to breakthe housing-economy cycle, the deleveraging process willstill be painful and take some time. But that’s not anargument against action; just because a headache can stillhurt some even if you take aspirin doesn’t mean you shouldskip the aspirin. One thing the Obama administration coulddo now -- probably with Republican support -- would be toattack the oversupply of housing stock by allowing a taxwrite-off for investors who buy empty properties and rentthem out.