More Efficiency, Less Equity

Housing rescue will benefit economy

I was taking an economic class last year. I learned that there is a tradeoff between equity and efficiency. In order to clean up the housing mess, President Obama just proposed a housing rescue plan to help the people who can't really afford the loans they got. Otherwise it will still be so hard for the lenders to lend money because they haven't got the money back from the borrowers. However, this plan is not going to help every borrower. For those who bought houses as an investment, owned far more on their house than it is worth, and worked so hard to keep up their house payments won't get help under this plan. It is so unfair that the people who didn't consider their ability on buying house and failed to pay off the loan can get benefit from the government, but the people who are able to keep up their house payments won't receive any help from the government. On the other hand, if the government chooses to have more equity in this case, for example the money is spent on helping every borrower, that won't be efficient to solve the problem.

I think this article is intended for the people who are paying attention to the economic issues. This article addresses an argument that whether we should choose efficiency or equity. The author is pretty natural, but I think this person agrees slightly more on efficiency and which is what I agree with. Choosing to have more equity to keep everyone happy is short-term, I believe nobody is happy in the declining economics. On the other hand choosing to have more efficiency is long-term, because once the econmic starts growing again everyone can live easier.