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Congress needs to build a system that will enable a healthy housing industry to better meet the needs of future generations. Shrinking and ultimately eliminating Fannie Mae and Freddie Mac while enabling private-sector entities to replace them will free housing from its Depression-era financing system. It will also encourage innovations that will provide better financing options without the threat that taxpayers will have pay for another multi-hundred billion dollar bailout.

• David C. John is senior research fellow in financial institutions at the Heritage Foundation (