Paulson's Plan

Here is an article written by Michael Pento via the Financial Sense website.

Below are some highlights from the article: 

The essence of his plan is to convince the owners of sub-prime adjustable mortgage debt to freeze the interest rate resets for a period of about five years, a proposal which is supposedly only to be available to those who will become indigent once the higher rates become effective...

Offering to freeze the rate for only those who cannot afford higher rates is silly and we will certainly see claims of indigence from many who can actually pay...Just read this article on the amount of fraudulent Katrina aid relief claims...

Most importantly, Paulson's anti-capitalist plan serves to reward those who behaved irresponsibly and punish those who lived within their means.

In my opinion, this also sets up a "moral hazard" for the future. Incentives for being prudent and self-responsible are further eroded.