The Menace of Strategic Default by Luigi Zingales, City Journal Spring 2010:
"This proposal eliminates all the incentives for a strategic default without excessively rewarding the borrowers. In fact, the proposal’s main appeal is that it tries to split the costs and benefits fairly between lenders and borrowers, without having taxpayers subsidize both, as the Obama administration’s interventions have done. Unfortunately, that makes our proposal unpopular. Since it doesn’t unduly favor any constituency, it isn’t supported by any. And since it doesn’t spend tax revenue, it isn’t favored by politicians, who never tire of rescuing some people with other people’s money."
Monday, April 05, 2010
The Menace of Strategic Default by Luigi Zingales, City Journal Spring 2010
Well, yeah...
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