Politics
Out of context: Reply #1339
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- tommyo0
Hmmm so this morning I woke up and thought, 'Why was government pushing sub-prime loans in the first place??' I came up with two theories: 1. Conservatives were trying to push the economy through the risky involvement of the mortgage industry. 2. Liberals and extreme socialism were trying to make it so that every family could buy homes. Either way, someone pushed and then allowed the banks to pursue the risky practice of subprime loans. So I did a little digging ... not much mind you, tons of work to do today. But I found this:
'The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.
The original lobbyists for the CRA were the hardcore leftists who supported the Carter administration and were often rewarded for their support with government grants and programs like the CRA that they benefited from. These included various "neighborhood organizations," as they like to call themselves, such as "ACORN" (Association of Community Organizations for Reform Now). These organizations claim that over $1 trillion in CRA loans have been made, although no one seems to know the magnitude with much certainty. A U.S. Senate Banking Committee staffer told me about ten years ago that at least $100 billion in such loans had been made in the first twenty years of the Act.'
Now I know that even if this is 100% accurate, there are a lot of people to blame in-between industry being given the go-ahead to push loans like this and the state of our economy today. Also, I'm sure both sides of the political fence share a ton of blame for allowing it to get as far as it has. And I do understand that good ol fashioned American Greed accounts for a lot of the blame. But if anything, this should illustrate how government should not be involved in policy such as this. In an ideal world it would be great if everyone could own their own home, but in a realistic world ... some people don't have the sensibility to take on the financial responsibility that a home represents. If the reasons for this bill coming into being are accurate - then we're currently reaping the rewards of Socialism.
<IMO> Government should provide the basis for which we can all succeed i.e. a sound and strong economy. Once that is achieved then it should be up to us to make the decisions in our life that determine our success. Government involvement that basically 'gives' us the rewards of a successful life is an end-run around something all Americans can use a little more of, responsibility. In the case of the economy we're now staring in the face - government overstepping without strict industry regulation was like opening the hen house and inviting the wolves over for tea. Pardon the gross arms-length generality of this opinion, I do know that our problems go a lot deeper than just socialism and government policy. But if the 1977 Community Reinvestment Act was the thread we left hanging from our national sweater vest then we were asking for it to be tugged on until our communal navel was showing for all to see.</IMO>
- How about this: "Real Estate as the means of wealth transfer from the have nots to the haves."TheBlueOne
- You think that's what this is all about? Mortgage crash - foreclosure - the 'haves' buy the real estate - market rebound?tommyo
- My cynical, I really don't want to believe that side says yes. And these days..well...TheBlueOne
- I see what you're saying - but I disagree. Why would they start a program in the first place to inflate values, only to buy ...tommyo
- them once they go back to the values they were when the bubble started to fill?tommyo
- Failed policy with idealistic intentions is what I'm seeing here.tommyo