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The paper analyzes a government loan program that complements money. The focus is on administrative costs and the difference between the collection technologies available to the public and the private sectors. Among the questions addressed are: the optimal monetary and credit policy and the desirability of money substitutes. The paper describes the loan program as an integral part of the tax system and comments on some tax reform ideas. The recent crisis has led to government intervention in the consumer loans market. For example, the Home Affordable Modification Program is aimed at helping about 9 millions Americans stay in their homes by using government funds to lower their monthly payments to less than 31% of income.
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