As painful as it may be, letting the housing and mortgage markets sort out these problems on their own would be best for the economy in the long run. Large-scale government interventions are not necessarily the best policy responses, although those made truly needy by this crisis need to be helped.
Bermuda gets $46,000 a year, while Iraq receives $2.3 billion. What motivates donors to give aid to other countries? Need—and the need for favors.