Magazine March 8, 2010, Issue

Mortgage Morality

A for sale sign sits outside a house in Miami Beach, Fla., October 22, 2009. (Carlos Barria/Reuters)
On the question whether Americans are economy-destroying knaves

‘Political writers,” David Hume once wrote, “have established it as a maxim, that, in contriving any system of government, and fixing the several checks and controls of the constitution, every man ought to be supposed a knave, and to have no other end, in all his actions, than private interest.”

The U.S. housing market is currently putting that supposition to a historic test. If American mortgage borrowers act in their own narrow interests, as “knaves,” they might yet cause an economic collapse worse than anything we have suffered.

At issue is the question of walking out on your mortgage. In many states,

Kevin A. Hassett served in the Trump administration as a senior adviser to the president and is a former chairman of the Council of Economic Advisers. He is the senior adviser to National Review's Capital Matters, a new initiative focused on financial and economic coverage, and is the Vice President of the Lindsey Group.

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