Government expansionism and economic ignorance combine for another attempt to meddle in private markets with a proposal for the feds to purchase non-performing mortgages. Life long government hack Barney Frank says that without more government intervention: "we're going to have a longer and deeper economic problem than is necessary,"
Quite the opposite. A bailout of bad loans just encourages more bad loans at taxpayer expense and delay recovery as deadbeats will now string out Uncle Sam rather than allowing foreclosure by the lenders who made these bad loans in the first place.
Well, I'm a capitalist, and working on Wall Street. In principle I agree with this post, but in THIS case, the market needs some counterparty confidence. It is indeed a moral hazard to "bail out", but if done prudently, it may be the lesser of two evils.
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