Citation URL: http://www.urban.org/EdwardGramlich

Edward Gramlich, the Richard B. Fisher Senior Fellow at the Urban Institute and a member of the Board of Governors of the Federal Reserve System from 1997 to 2005, died September 5. In his last paper, delivered at a Federal Reserve Bank of Kansas City symposium shortly before his death, he called for swift action to fix the problems in the subprime mortgage market. The paper was presented by former Federal Reserve colleague David Wilcox, who offered "Four Images of Ned Gramlich" before reading Gramlich's "Booms and Busts: The Case of Subprime Mortgages."

A new Urban Institute Press book offers a slate of reform opportunities for the ailing subprime mortgage market and provides one of the first comprehensive analyses of this still-evolving segment of the mortgage industry.

In this Washington Examiner commentary, senior fellow Edward Gramlich argues that, despite foreclosures, three-quarters of new homeowners with subprime mortgages are making their payments. However, policymakers should consider increasing protections and safeguards for them.

The Survey of Consumer Finances (SCF) is a data series on household wealth compiled by the Federal Reserve. Every three years the Fed surveys about 4,500 American households, asking about their income, saving, wealth, types of wealth, debt, debt payments, and so forth, garnering valuable information. This brief focuses on homeownership, using the SCF to examine variations in ownership rates and overextension ratios by race and income.

Edward Gramlich is the Urban Institute's first Richard B. Fisher Senior Fellow and the author of America's Second Housing Boom, a new brief on the benefits and risks of the subprime mortgages offered to lower-income buyers. He discusses affordable housing, national health insurance, and recommendations for the new Congress.

The prime mortgage market largely fueled America's first housing burst after World War II. Low- and moderate-income households, largely excluded from this earlier movement, are getting swept into the second housing boom. This brief details how homeownership has again expanded, this time fueled by the development of the subprime market. Rising interest-payment burdens for many subprime borrowers, however, might mean delinquencies and foreclosures.

With rapid increases in entitlement spending just over the horizon, now is the time to get deficits down and national saving up, senior fellow Edward Gramlich told the House Budget Committee.

There has been much breast-beating lately about future entitlement spending burdens. The out-year liabilities of Social Security seem quite large—$11 trillion in present-value terms. How can the nation ever deal with such major funding problems? While I have offered a specific plan in the past, most notably when I chaired one of the Social Security advisory councils ten years ago, in this paper I focus only on a broader strategy. While the present Social Security system is not by itself terribly far out of long-term actuarial balance, when combined with Medicare, the country is facing major problems in funding projected entitlement spending down the road.

The authors discuss citizens' increasing estrangement from government and propose eight pathways to a government more attuned to current and future needs: (1) freeing the fiscal future; (2) giving social insurance a modern face; (3) making a government for all ages; (4) improving everyone's chance to build financial security; (5) investing in lifetime learning ; (6) increasing the time children spend with adults; (7) supporting the modern family; and (8) fostering a new democratic citizenship. The focus is on how these areas can restore government ownership to citizens and enable the development of a more dynamic public sector.

Before buying into anyone's vision of where public policy should go, we must think seriously about where we are now. This includes our economic and social structure, our government as a prominent feature of that landscape, and the way we currently make political decisions. The authors' views of where we are now lead them to propose a rethinking of our commitments as a society, our public responsibilities, and our processes for making policy choices--a rethinking that can help make government more responsive to changing expectations and changing needs.

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