Administration Seeking Unilateral Levers To Speed Deleveraging: While keeping one eye on Congress and the fate of the American Jobs Act, President Obama is also planning to move ahead with a few unilateral steps that it can take on its own authority…
new rules for federally guaranteed mortgages… policy changes to ease college graduates’ repayment of federal loans….
Targeted debt relief is not my favorite idea in the world. It raises fairness, moral hazard, and time-consistency problems that can be avoided with broader based stimulative ideas. But if congress won’t enact broad stimulatory policies, then the administration has to try to go forward with the levers it has at its disposal. As predicted by my personal moral values chart, I think it’s much more important to reduce the harm of mass unemployment than to try to have us all suffer together in a fair way.