Steyn seems to think the plan isn't optional, that loan servicers and investors were forced to go along with the plan and therefore that the U.S. is going to hell in a hand basket. But loan servicers and investors agreed to the plan according to reports.
Steyn is concerned about government negating contracts, or at least amending them, by fiat. But that's not what happened.
Perhaps it's weird to people who have always been journalist, but business men and women change contracts and compromise promises all the time. Business people do what is in their interest. If a customer buys 100 widgets and can't pay for them all, business people try to work something out -- give the customer more time to pay, cut the price a little or whatever. If you force the customer into bankruptcy you may get nothing or nearly nothing. It's often to your advantage to help your customer survive.
It's the same with subprime mortgages. If the mortgage holder forces the borrower into bankruptcy, he or she loses a lot. If the holder enables the borrower to stay in the home and continue making payments then the holder loses less. Why would the holder not take the deal that minimizes his or her losses?
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