While keeping one eye on Congress and the fate of the American Jobs Act, President Obama is also planning to move ahead with a few unilateral steps that it can take on its own authority:
According to an administration official, Mr. Obama will kick off his new offensive in Las Vegas, ground zero of the housing bust, by promoting new rules for federally guaranteed mortgages so that more homeowners, those with little or no equity in their homes, can refinance and avert foreclosure.
And Wednesday in Denver, the official said, Mr. Obama will announce policy changes to ease college graduates’ repayment of federal loans, seeking to alleviate the financial concerns of students considering college at a time when states are raising tuition.
Targeted debt relief is not my favorite idea in the world. It raises fairness, moral hazard, and time-consistency problems that can be avoided with broader based stimulative ideas. But if congress won’t enact broad stimulatory policies, then the administration has to try to go forward with the levers it has at its disposal. As predicted by my personal moral values chart, I think it’s much more important to reduce the harm of mass unemployment than to try to have us all suffer together in a fair way.