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In a pair of moves that might once have seemed too cynical even for Washington, it looks like policymakers have decided the cure for a crisis created by too much cheap credit offered too long is very simple: Extend the terms, encourage more borrowing and have someone else foot the bill. It's the financial equivalent of the hair-of-the-dog "cure" for a hangover: a big interest-rate cut from the Federal Reserve next week and, as just announced by President Bush, a massive bailout plan for distressed mortgage holders. Talk back: Do you think the government should bail out subprime borrowers? Have we completely lost our common sense? Is it really desirable to provide easier money to people and companies that got into trouble by abusing their access to money in the first place? And is it really a good idea both to cancel mortgage bondholders' contracts for the sake of an adjustable-mortgage-rate freeze and to provide a couple of years of grace for stressed-out home borrowers who are likely to eventually default anyway? I don't think so. It's as if the Federal Reserve and U.S. Treasury believe the best way to treat heroin addicts is through long-term, government-supplied crack. To be sure, lower interest rates and a mortgage-rate freeze might ease borrowers' pain temporarily, but they do nothing to solve causes or habits -- and without a doubt launch a new cycle of abuse and dependence. Building bad habits Unfortunately, this is pretty much the history of U.S. economics in the past decade. We call ourselves a free economy but repeatedly let the government intervene to make sure that no one who votes gets seriously hurt. As a result, individuals who make bad choices -- from Gulf Coast residents who build homes in the path of hurricanes to low-income citizens who take out expensive loans for overpriced real estate -- are rescued time after time in well-intentioned but misguided programs such as the one the Bush administration has cooked up for foreclosure-facing mortgage holders and their lenders. What has to irk you is the disparity between who wins when things are going well and who loses when things go sour. More from MSN Money Danger! 25 stocks to avoid now Getting rich off the subprime mess For an elite few, credit pain means profit Are we headed for an epic bear market? What the big banks aren't telling you -- yet When banks make a lot of money, after all, they suck down the profits by giving their executives and boards outrageous pay packages worth tens of millions of dollars, justifying their actions under the rubric of entrepreneurship. And when the opposite happens? They beg taxpayers for a handout. Veteran observer Satyajit Das has disdainfully called the financial industry's attempt to patch over its problems with taxpayer funds the "socialization of losses." It's an approach that may sound good to politicians in an election year yet is not only morally bankrupt but will also merely delay the ugly final reckoning for companies, individuals and policymakers alike. Video on MSN Money Bush reveals mortgage plan

President Bush announces an agreement with the mortgage industry that will freeze rates on hundreds of thousands of subprime mortgages. Postponing the undeniable anguish involved in making participants own up to debtfueled losses is exactly why it took Japan more than a decade to shake off the bursting of its own credit bubble back in 1990. Interest rates were cut essentially to zero, but because moribund banks and real-estate tycoons were given government stipends, they drew funds and attention away from more-productive uses, and the country entered a recession that haunts Japan to this day. Broken promises The program proposed by U.S. Treasury Secretary Hank Paulson -- hammered out in round-robin meetings with mortgage lenders and borrowers' representatives in the past few weeks -- would freeze interest payments on hundreds of thousands of adjustable-rate mortgages for three to five years. That sounds nice, but here's the catch: Rising interest rates were contractually promised to the mortgage lenders, which then passed along that promise to companies that bought the loans as part of asset-backed securities