Congress Caused This Financial Crisis
I’ve contended before that LESS government is BETTER government… and I stand by that. I point at the current financial situation as an example of where Congress intruded in the market process, imposed requirements to loan money to those who otherwise couldn’t qualify, and the market… playing by these “new rules” (which were artificial and manipulated the TRUE market)… complied. With vigor.
The securitization of mortgages just made it even more complicated, passing along riskier loans to investors who could not readily identify the level of risk associated with those underlying loans… or who judged the risk as minimal because of the backing of FNMA and FHLMC.
While there is evidence of fraud on the part of some mortgage companies, the loosening of credit standards (so-called “stated income” and “no documentation” loans, especially to those with poor credit histories) is the core problem in this whole mess.
Than, when loans could not be repaid, the house of cards started to crumble Of course, in our current political climate, Congress has jumped in with a populist response… declaring outrage that companies would do these things and propose MORE government to “fix it”.
Except CONGRESS CAUSED THIS PROBLEM! Here is one of the best articles I’ve found on the subject and I recommend you read it:
Congress Tries To Fix What It Broke
“The original culprits in all this were the social engineers who compelled banks to make the bad loans. The private sector has no business conducting social experiments on behalf of government. Its business is making profit. Period. So it did what it naturally does and turned the subprime social mandate into a lucrative industry.
Of course, it was a Ponzi scheme, because they weren’t allowed to play by their rules. The government changed the rules for risk.”
Don’t accept what the politicians are saying… find out for yourself!
