Helping struggling homeowners by writing down some principal on their mortgages may not be justified

See Wonder If He’s Ever Read David Hume by Don Boudreaux of "Cafe Hayek."

"Here’s a letter to the New York Times:

Joe Nocera argues that a policy of government “helping struggling homeowners by writing down some principal on their mortgages” is justified exclusively by “the data”; it’s science and not “ideology” (“To Fix Housing, See the Data,” Nov. 5). Therefore, save for those who are blinded by ideology, all well-meaning people must support this policy.

This Gradgrind-like argument fails.

Not only do the data that so impress Mr. Nocera speak only about existing mortgages – and, hence, say nothing about the possible altered incentives of future homebuyers to take on excessively large mortgages, or about government perhaps becoming locked in to a policy of granting mortgage relief – the very notion that certain homeowners are entitled to financial relief at the expense of taxpayers springs from an ideology. That ideology might or might not be wise, well-grounded, and humane. But ideology it undeniably is.

Here’s a fact: no conclusion about the proper role of government rests only ‘the facts.’ Ideology is inescapable. And it turns most lethal when smuggled into arguments in the guise of ‘just the facts.’

Sincerely,
Donald J. Boudreaux"