The government used to protect poor people, and young people, and people with bad credit histories, from getting loans, by making it illegal to charge the high interest rates that would make those loans profitable. Were they better off? They didn’t have credit card debt, to be sure, or huge mortgages. Instead they had pawnshops, or time payments, or convictions for kiting checks, all of which used to be popular ways of handling things like emergency car repairs.

Borrowers may have had help getting in over their heads, but at the end of the day, “variable interest rates vary” is not in the realm of things it is unreasonable to expect them to have understood when they signed on for a gigantic mortgage. Indeed, many of the defaulters seem not to be able to afford their teaser rates, which is certainly something they should have been able to figure out on their own. One of the reasons that I do not currently own a home is that I cannot afford one. Now I get to pitch in my tax dollars to bail out people who also could not afford a home, but went ahead and bought one anyway.