Rewarding imprudence

Willem Buiter has it right again:
The government’s proposal for subsidising those who took out excessive mortgages in the past, is a text-book example of bad economics. It is unfair, distorts incentives and does nothing to stimulate the economy. Zero out of three is bad indeed.

1 comment:

  1. I quite agree. Always the saver that gets penalised. Everything that the government has done so far will do nothing for the economy except encourage the banks to keep lending irresponsibly and people to keep spending recklessly.