On the Vox blogsite of the Centre for Economic Policy Research, I have written a piece called The Paulson Plan: a useful first step but nowhere near enough. The title is rather self-explanatory. In the blurb preceding the column it reads: “The Package also needs some goodies for US homeowners”. The column in fact argues the opposite. The populist, re-election oriented faction of Congress is asking for such goodies and they may be politically necessary to get the rest of the plan through, but both from an economic efficiency and from a fairness perspective, sops to over-stretched mortgage borrowers are undesirable.
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