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03/02/2009

AIG gets more money

If you want a fairly simple, yet infuriating, explanation of why the government announced today that it's giving AIG more money see this article from the NY Times a couple days ago. The essence of the article boils down to that because AIG behaved so badly the government has to help it.

There is also an interesting article at the Heritage Foundation against Obama's Mortgage Stability Program. I bring it up here because of this quote:

The plan's Stability Initiative bestows new and costly benefits on those who took on more debt than they could handle, including credit cards, automobile loans, and mortgages (including refinancings and seconds). Worse, the value of the benefits will vary in direct proportion to the degree of borrower financial irresponsibility, and the intensity of community land regulations. Homeowners with a first mortgage as large as $729,750 are eligible for the initiative, meaning that the well-to-do will receive more financial benefits than those of modest means. And as analysts at one nationwide financial firm noted: "The modifications would go disproportionately to borrowers who overstretched and who lied about their income." This moral hazard sends a clear message to the American people: The worse the behavior the greater the reward.


So lie, cheat and generally behave badly and we, the taxpayers, will rush to your rescue.

 I was one of those kids in school who always behaved. I actually got nervous (and, really, I still do) when those around me acted up. And it always pissed me off that misbehaved students always received more "positive reinforcement."

Looks like I should have just been acting up my whole life. Where's my credit card?

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Austin Diaz

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