If California did not have an implied guarantee on their debt from the Federal government , how much money do you think Californians could borrow today? And look what those implied Federal guarantees cost us at Freddie Mac and Fannie Mae. The real moral hazard is that the bigger that California’s debt gets the harder it will be for the Federal government to let it default. It is time for the Federal government to step in now and appoint a receiver to run California. The longer it takes, the more it will cost everyone outside of California.
An interesting new college model - Minerva
10 years ago
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