Review

An overview of this Review issue.

Is the United States bankrupt? Many would scoff at this notion. Others would argue that financial implosion is just around the corner. This article explores these views from both partial and general equilibrium perspectives.

Commentary on "Is the United States Bankrupt?" by Laurence J. Kotlikoff.

The federal government’s role as lender and insurer is very important, with over $ 1.4 trillion of loans and guarantees and at least $ 7 trillion of insured risk. Tens of millions of Americans benefit from housing loans, student loans, flood insurance, etc. Yet the federal financial institutions established to run these activities are often created almost as an afterthought, with little focus on their structure.

Commentary on "On the Importance of the Plumber: The Intersection of Theory and Practice in Policymaking for Federal Financial Institutions" by Douglas J. Elliott.

This article reviews the evolution of the major credit and insurance programs undertaken by the U.S. government in support of urban housing. As the review makes clear, the Federal Housing Administration (FHA), Veterans Administration, Federal National Mortgage Association, and Federal Home Loan Mortgage Corporation have played major roles ...

Commentary on "Federal Credit and Insurance Programs: Housing" by John M. Quigley.

Asset-liability mismatch was a principal cause of the Savings and Loan Crisis of the 1980s. The federal government's failure to recognize the mismatch risk early on and manage it properly led to huge losses by the Federal Savings and Loan Insurance Corporation, which had to be covered by taxpayers.

Commentary on "On Asset-Liability Matching and Federal Deposit and Pension Insurance" by Zvi Bodie.

This article evaluates the need for a government role in insuring natural and man-made catastrophes in the United States. Although insurance markets have been stressed by major natural catastrophes, such as Hurricane Katrina, government involvement in the market for natural catastrophe insurance should be minimized to avoid crowding-out more efficient private market solutions, such as catastrophe bonds.

Commentary on "Should the Government Provide Insurance for Catastrophes?" by J. David Cummins.

Robert E. Litan focuses on federal relief for natural disasters and the need to take proactive measure now. Joseph E. Stiglitz focuses on the role of government in risk-bearing, identifying recent episodes of government bailouts and the need to better understand why individuals have been inadequately insured.