dd, > actually thinking about it, as well as needing to more or less completely > suspend the laws of political > gravity (which arguably Julio must have been hoping we'd spot him in the > first place given that this is a > plan redistributing money from the rich to the poor), there's an even more > killer objection here in that > you can't use the static figures for the current population of delinquent > subprime loans; if you launch a > government program to take care of the mortgage for delinquent subprime > borrowers, then the category of > "non-delinquent subprime borrowers" is going to shrink to zero pretty quick, > and the category of "prime > borrowers" is going to see quite significant migration to "subprime". I > think these forseeable dynamic > effects could make enough of a difference to the total cost of Julio's > package to stop it dead in the water.
Well, exactly the same dynamics (if not much worse) could be unleashed by the Paulson plan. Financial institutions that, under some criterion, don't have garbage (or have other kind of garbage) in their books could suddenly claim to have it and fudge things accordingly. The incentive would be there. That said, policy makers can draw lines, use norms, apply fixed criteria that is never infinitely precise and leaves everybody happy. As I said, this would not be the first need-based federal program. Look, at this point, an ax is needed. Theirs is fiscally regressive. Big time. Why not argue for a fiscally progressive ax, even if it's still an ax. Re. Doug's reply. Even if this plan used up $700 billion, it'd be infinitely better than the Paulson plan. I'm not saying we have the same chance of passing a progressive rescue plan as Paulson has of passing a regressive one. But why not argue for it? I can understand arguing about this or that detail, but I think we should on board on the principle. No? _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
