We the people are in the worst economic crisis that my generation is likely to ever see. But what caused this? The answer you seem to hear quite frequently is "Bush", or "Banks". Is it that simple? Let's break it down.
The main cause of this was the crash of the housing market. Before the recession, we had seen a serious housing bubble. Housing prices were high, and sales were up. This is the ideal market. Sort of. You see, the thing with a bubble is that it's full of air. When it pops, things go to crap. Hence, our current economic crisis.
Certain factors caused the aforementioned housing bubble. Banks gave out loans, in massive numbers, to people of lower incomes, who couldn't afford them. This is where people blame the banks. But why would they do this? What is there to gain?
The answer is that they never chose to do it. It was the result of the Community Reinvestment Act. A project intended to force banks to make a contribution to the bettering of the lives of the lower and middle class. Originally put into effect by Jimmy Carter, this was a disaster.
What this Act does is force banks to give loans to people that can't afford them, in order to make things "fair" for the lower and middle class, and to prevent banks from discriminating. Though put into effect during Carters era, it was Janet Reno that most recently really rammed it through.
Now you have a housing bubble. Lots of people buying homes, driving real estate prices up, making it look as though we have a booming economy, all thanks to liberal politicians. But bubbles only last so long.
Eventually you move into the next phase of the bubble. The popping. People who couldn't afford their homes eventually began getting foreclosed on. As this occurred more, real estate prices began to plummet. Now, not only do are people being forced out of the homes they never should have owned in the first place, they realize that their homes are now worth far less than they paid for them.
Now you have a lot of people that lost everything. This results in a whole lot of people not spending money. Now all these businesses don't have any income. They're forced to lay people off. This results in more foreclosures, and even less spending.
Now there's a panic, with banks suffering. So the feds create a plan to solve it. Bailouts. They not only offer bailout money, but they force them to take it, in the way that they forced them to give out bad loans. Now they control the banks, and it's easily done, since they've pitted the American people against them.
Now we're in a downward spiral. Taxes skyrocket to cover these bailouts, while the same feds keep adding new programs that cost exponential amounts of money, causing these taxes to skyrocket even more. Now there are greats amount of pressure on our biggest employers. So once again, people are laid off, spending less money, getting foreclosed on, etc.
As the great Ronald Reagan said, "In this present crisis, government is not the solution to the problem. Government is the problem." But the feds, teamed up with a one sided media, have convinced the people that it's the greedy banks, and too little government. That the solution is government. So they continue to step in, spending billions and billions on bailouts, stimuli, and huge government programs. Businesses go under, people are laid off, people are foreclosed on, people spend less money, more businesses go under, etc. The vicious cycle continues, and like any good magician, feds having you watching the right hand, while the left hand makes the economy disappear.
The main cause of this was the crash of the housing market. Before the recession, we had seen a serious housing bubble. Housing prices were high, and sales were up. This is the ideal market. Sort of. You see, the thing with a bubble is that it's full of air. When it pops, things go to crap. Hence, our current economic crisis.
Certain factors caused the aforementioned housing bubble. Banks gave out loans, in massive numbers, to people of lower incomes, who couldn't afford them. This is where people blame the banks. But why would they do this? What is there to gain?
The answer is that they never chose to do it. It was the result of the Community Reinvestment Act. A project intended to force banks to make a contribution to the bettering of the lives of the lower and middle class. Originally put into effect by Jimmy Carter, this was a disaster.
What this Act does is force banks to give loans to people that can't afford them, in order to make things "fair" for the lower and middle class, and to prevent banks from discriminating. Though put into effect during Carters era, it was Janet Reno that most recently really rammed it through.
Now you have a housing bubble. Lots of people buying homes, driving real estate prices up, making it look as though we have a booming economy, all thanks to liberal politicians. But bubbles only last so long.
Eventually you move into the next phase of the bubble. The popping. People who couldn't afford their homes eventually began getting foreclosed on. As this occurred more, real estate prices began to plummet. Now, not only do are people being forced out of the homes they never should have owned in the first place, they realize that their homes are now worth far less than they paid for them.
Now you have a lot of people that lost everything. This results in a whole lot of people not spending money. Now all these businesses don't have any income. They're forced to lay people off. This results in more foreclosures, and even less spending.
Now there's a panic, with banks suffering. So the feds create a plan to solve it. Bailouts. They not only offer bailout money, but they force them to take it, in the way that they forced them to give out bad loans. Now they control the banks, and it's easily done, since they've pitted the American people against them.
Now we're in a downward spiral. Taxes skyrocket to cover these bailouts, while the same feds keep adding new programs that cost exponential amounts of money, causing these taxes to skyrocket even more. Now there are greats amount of pressure on our biggest employers. So once again, people are laid off, spending less money, getting foreclosed on, etc.
As the great Ronald Reagan said, "In this present crisis, government is not the solution to the problem. Government is the problem." But the feds, teamed up with a one sided media, have convinced the people that it's the greedy banks, and too little government. That the solution is government. So they continue to step in, spending billions and billions on bailouts, stimuli, and huge government programs. Businesses go under, people are laid off, people are foreclosed on, people spend less money, more businesses go under, etc. The vicious cycle continues, and like any good magician, feds having you watching the right hand, while the left hand makes the economy disappear.
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