Comments on "Are the government-sponsored enterprises (GSEs) justified?"
In ‘‘Are the Government-Sponsored Enterprises (GSEs) Justiﬁed?’’ the authors conclude that the beneﬁts delivered by the GSEs (as structured prior to conservatorship) are minimal and do not exceed their costs. While many of the arguments made in the article have merit and raise serious questions about the structure of the GSEs prior to 2008, the article overlooks several important beneﬁts and costs. More signiﬁcantly, no one is arguing for a return of the GSEs as they were structured prior to conservatorship. Rather than debate the merits of a model that has already been rejected by policymakers, we argue that the far more important question is what the housing ﬁnance market should look like in the future.