Monday, October 06, 2008
If you haven't already listened to it, do listen to the LRC podcast where Lew Rockwell interviews Peter Schiff. As usual with Peter Schiff, he provides a lot of valuable insight, but what I actually found most interesting is how he reveals that with the bailout package, it is economically rational to stop paying off your mortgage. Because if you do, your lender will sell the mortgage to the government who under the package must do everything they can to prevent foreclosure, which will mean that they will have to offer you a sweeter deal. So when Rockwell asked Schiff what an ordinary person can do to save themselves in the ongoing economic meltdown Schiff replied that the most obvious and best thing to do is stop paying your mortgage. I spontaneously laughed when I heard that as I figured he was only ridiculing the irrationality of the bailout plan. But maybe Schiff is right, maybe it would be rational (at least for some people) to stop paying your mortgage with this bailout plan. Can anyone find any reason why Schiff is wrong on that?