Government Solution to Mortgage Crisis: Let's Lend More Money

So it appears that the government's solution to the mortgage crisis is to encourage both banks and individuals to be more fiscally responsible, not to get into mortgages that they cannot afford, to save money for the future? Umm...no, sorry that won't get 'er done. What they are talking about doing (and I think they will do it) is allowing Freddie Mac and Fannie Mae to reduce capital requirements so that they can lend out more money. I imagine the thinking behind this is that more people will borrow which might, perhaps maybe, possibly will stop the erosion in the price of houses. I suspect it won't work. It's like putting band aids on a severed artery. I think things won't get better until we are dragged into fiscal discipline kicking and screaming, and scheming all the way.