One of the characteristics of the current housing crisis is that it is an avalanche. As it heads downhill it picks up speed. The longer it goes unsolved, the harder it will be to fix. Foreclosures continue to increase. Prices continue to fall. As unemployment moves toward 7% and above, those numbers are not going to improve.

Odd then, the no one in the federal government can stop fighting over how to fix the problem long enough to come to a quick solution and begin to fix the situation before a catastrophe turns into a cataclysm.

According to The Wall Street Journal, "The FDIC has been developing a proposal, which some estimate could help between two and three million homeowners." It is less clear what the administration wants to do, but it is concerned that baling out homeowners will encourage some people to default on mortgages to get a handout.

The White House is right when looking at the small picture and wrong when it looks at the larger one. Some cheaters and scoundrels will use a program to help enrich themselves. But, it is likely that the number of thieves will be much smaller than the millions of people who have legitimate problems staying in their homes. While details which are relatively unimportant in the scheme of these hold up a plan, the rest of the system heads down the toilet.

Penny wise, and pound foolish.

Douglas A. McIntyre is an editor at 247wallst.com.