Is a bailout “inevitable”?

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Good morning, again. Don’t let this ruin your Saturday, but the top story on LATimes.com this morning carries the headline ‘Bailout might be inevitable.’

Tom Petruno notes that recent U.S. history indicates it’s likely the federal government will try to rescue homeowners: ‘The idea that a government entity should step in to save some significant number of people who can’t make their mortgage payments has been gaining traction, and not just with the think-tank set.’

More: ‘Would this create a massive new bureaucracy? Of course. Could it be a boondoggle for taxpayers? Ditto. Could it foster ‘moral hazard’ -- encouraging bad behavior by other borrowers (and lenders)? You bet.... In any case, history -- and the approach of an election year -- suggest that Washington will come riding to the rescue, and on a greater scale than what the White House has proposed.’

Your thoughts? Insights? Comments?
Photo Credit: AP