Paul's idealogical stance sounds great on paper, but in practice, it would be disasterous if the government didn't intervene here. Paul basically thinks that the government should never intervene in issues relating to the free market. While he's right in suggesting that the government is involved too much, he takes it too far. In this case, two wrongs will make a right; the government will make money by purchasing these undervalued mortgages. Paul is right, government needs to control spending and reduce taxes to keep capital in the open market, but there is something to be said for having them regulate trade (ie: the uptick rule needs to be brought back... it would have limited much of this mess in the first place by not giving hedge funds a green light to crash a sector by shorting it to death).
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