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You Get What You Pay For

June 15, 2011, 3:57 pm

When a loan company rewards delinquent customers with better rates and/or principle reductions, they get a lot more delinquency.

Category: Economics

4 Comments

  1. Old Soldier:

    After Unemployment, Welfare, Medicare, Medicaid, etc..., I am totally shocked by this development.

    June 15, 2011, 7:43 pm

  2. morganovich:

    if you kids keep screaming like that, i'll give you a cookie...

    June 16, 2011, 6:21 am

  3. carnahan:

    Any landlord can tell you this was bound to happen. Give tenants extra time or a rent cut for a problem and they will come back again even quicker for the next break. Never fails.

    June 16, 2011, 7:58 am

  4. Ted Rado:

    I have often wondered why proposed government (and private) schemes dealing with the public were not subjected to scrutiny by behavioral scientists. Most of the abuse of programs is very predictable. Examples: Unemployment payments encourage people to stay unemployed rather that accept a low-paying job. Federal aid to dependent children encourages poor girls to get pregnant. The list goes on and on. If all this is obvious to me, why does the government do it? Obviously to buy votes.

    June 17, 2011, 11:21 am