The Next Bailout Gets Closer

The Federal Housing Administration, the government agency whose loan-insurance programs have become a crucial source of support for the housing market, said on Thursday that its cash reserves had dwindled significantly in the last year as more borrowers defaulted on their mortgages. ...

As recently as a few weeks ago, the F.H.A. had said that even under the bleakest economic forecast, its cash cushion would quickly recover. On Thursday, it abandoned that position.

The only suprise here is that anyone kept a stright face while denying that this outcome was inevitable. So long as the U.S insures mortgage debt, bailouts will continue.