Speaking to an otherwise very sensible American I was astonished by a viewpoint which appears to be widespread: the government must aid the defaulting homeowners because they did not comprehend the consequences of taking on a mortgage.

The argument that eight million American families suffer from clinical idiocy, unable to comprehend what the A.P.R. clause in their mortgage contracts means, seems to me rather racist, or at least madly paternalistic. If this is true, then such people endangered their children’s livelihood by gross negligence and must be stripped of parental rights rather than awarded subsidies. Certainly they cannot be allowed to vote in elections: those who cannot read a straightforward mortgage contract obviously cannot choose between political platforms. That’s besides the fundamental corruption of allowing subsidies-takers to elect subsidies-dispensers.

Even assuming rather improbably that widely different strata—blacks, single mothers, poor white families, and Hispanics—similarly ignored the A.P.R. clause, they could not but realize that the principal had to be paid. So at most, the paternalistic argument can call for government assistance in paying the interest. Since the government insured many of those defaulted mortgages, charging the debtors the currently very low Fed rate makes economic sense. But look at the injustice: working families bend over backwards to pay their mortgages while the bankrupt receive society’s assistance. Instead of sending them to jail either for stealing the bank’s money (the depositors’ money, actually) or at least for gross negligence, the government rewards their patently irresponsible behavior, assuring a new wave of irresponsible borrowing and still larger default. After seeing the current bailout, who could be stupid or honest enough to refrain from borrowing with the expectation that the government will step in? That’s besides the banks’ interest in inflating the next mortgage bubble to make it sufficiently big that the government cannot afford for it to burst.

Allowing the bubble to burst is both just and economically beneficial. By preventing mass defaults, the government keeps house prices artificially high, thus increasing mortgage payments for working families. Drastically decreased prices and mortgages would make houses affordable for honest poor families without state intervention. Nor would defaulting greatly afflict the debtors. Most bought their houses with close to zero downpayment and have next to no equity in them. They simply return to their pre-bubble situation; in fact, the banks will usually be happy to rent the houses back to their defaulted owners after repossessing them. Since owning a house is only more profitable than renting it if the family writes it off on their taxes, the typically unemployed defaulting families have no rational reason whatsoever to prefer owning to renting their houses. The government has the best of the two worlds: it supports loyal voters (defaulted homeowners) and banks (the corporate interests behind the election campaigns). The American corruption was not unavoidable; when hit by the current crisis, Japan allowed a lot of people to lose their rented apartments, let alone the ones they owned. Tokyo parks are saturated with homeless who are nevertheless clean, groomed, and go to work each morning. In America, the citizen’s question, “What I can do for my country?” long ago gave way to the country’s, “How can I subsidize you?” Afro-Americans, Iraqis, Ukrainians… Martians are the only people around who don’t take the working Americans’ money.

Why is it that middle-class liberals support the bailout even though it wastes their tax money? Alienation from the state is one reason: the subjects feel their tax payments are wasted anyway and don’t mind wasting them on the pet projects. “Pet” is a key word: the liberals wouldn’t support a similar bailout of lower-middle class white families, but they laud the extension of paternalism over blacks and white paupers; as a bonus, they won’t riot and do away with suburban liberals. Economic paternalism is a part of an across-the-board government strategy for subduing its population: twelve-year school education in which pupils learn nothing of practical importance is another example. They enter adulthood obedient to their teachers and dependent upon them, and they remain obedient to the state and dependent upon it.

The bailout debate consistently ignores the most important issue: personal responsibility. The state should only help those who positively cannot help themselves; any other arrangement, regardless of its political and economic merits, is immoral.