I think it’s refreshing when someone in Washington who has some skin in the game — a politician, an Administration official — tells a basic truth plainly. The latest example is Larry Summers, President Obama’s top economic policy adviser, who addressed economic recovery, debt, and stimulus at yesterday’s Reuters Washington Summit.

Asked whether stimulus measures to support first-time homebuyers should be extended to existing homeowners,

He said there was a case to be made for extending the credit “in terms of supporting the housing market.” But he added: “At the same time, we can’t afford everything for which there is a case.”

Congress and the White House should adopt that mantra as they navigate the rocky shoals of budget and policy priorities in the coming years.

Sometimes we just can’t afford even good ideas (whether you think a wider homebuyer tax credit is a good idea is a separate question). Yet members of both parties rarely exhibit that level of fiscal restraint, preferring to tell constituents that we can have whatever we want and someone else will foot the bill.

Kudos to Larry Summers for making a case for reality.

For another take on the idea of only buying what you can afford, check out this clip from Saturday Night Live.