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Government Intervention Created Sub-Prime Mortgage Crisis
ronpaul2008.com — ARLINGTON, VIRGINIA – Of all the candidates currently running for president, only Ron Paul has a legislative record, spanning four decades, of opposing the monetary policy that led to the current sub-prime mortgage crisis.
ronpaul4liberty- 395 diggs
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- jester55, on 12/07/2007, -6/+27If Ron Paul becomes president i think it might be the best thing for this country since Ronald Reagan was president.
- fusuke31, on 12/08/2007, -1/+9Didn't Ronald Reagan rack up deficit spending? He certainly didn't subscribe to the Austrian theory of economics.
- PATSCRU, on 12/08/2007, -2/+3anything is better for this country than when ronald reagan was president. you gotta pick your political heroes a little more carefully.
- jtlight, on 12/10/2007, -0/+1While Reagan ran up the deficit, and I'm very much opposed to that, to say that anything is better than Reagan is pretty ignorant. Under Reagan, the country completed a pretty amazing turnaround. The misery index was better than cut in half, unemployment was down by large amounts, and inflation was severely cut. What people don't remember about the late 70s was the dismal economy. My friends parents got their first house loan during that time at 21%. That is unimaginable today.
So yeah, there were some bad things about Regan policies, but to ignore the positives of his Presidency is pretty ridiculous.
- jtlight, on 12/10/2007, -0/+1While Reagan ran up the deficit, and I'm very much opposed to that, to say that anything is better than Reagan is pretty ignorant. Under Reagan, the country completed a pretty amazing turnaround. The misery index was better than cut in half, unemployment was down by large amounts, and inflation was severely cut. What people don't remember about the late 70s was the dismal economy. My friends parents got their first house loan during that time at 21%. That is unimaginable today.
- shubidubi, on 12/08/2007, -13/+2If he becomes president the entire country will become sub prime. Bush is a diamond in the rough compared to Paul (and I hate Bush). You should see how this site is rated on Skewz.com...
- hiphoc, on 12/08/2007, -0/+7How abut since Thomas Jefferson?
- tunafizzle, on 12/09/2007, -1/+1I think you meant to say Bill Clinton ;D
- MaximusPryme, on 12/09/2007, -1/+2No.
- brad3378, on 12/10/2007, -0/+2I would have chosen Lincoln instead.
- votewritein, on 12/07/2007, -6/+12We need another Ronnie in the White House...
- PeppermintPig, on 12/08/2007, -0/+4Reagan had bad 'friends' around him. He didn't stick to his campaign promises and fell into the same old trap.
- WMDavies, on 12/07/2007, -2/+20People need to know about the inherent failures of central banking with fractional lending throughout our history and, indeed, of European history.
- GamerVer05, on 12/07/2007, -2/+11So it was the government's fault banks were lending to people with no money?
- WiseWeasel, on 12/08/2007, -1/+2No, it was the Federal Reserve's, giving such low interest rates. They're private.
- GamerVer05, on 12/09/2007, -0/+2So low that the banks cant be responsible for their own actions?
- OnGard4Liberty, on 12/09/2007, -0/+4I agree that people should be responsible for their actions. So when we talk about a lending crisis, it's not to say that the banks are blameless. However, the Federal Reserve, by creating artificially low interest rates, distorts market signals. It makes things seem better than they are. Because of this, people buy houses when they can't afford it, people make more money (or so it seems), and banks lend more. This bubble gets bigger and bigger until it bursts.
Interest rates should be controlled by the market, not a bunch of stuffy bureacrats.- GamerVer05, on 12/09/2007, -0/+1When does it ever make sense to lend 150000 dollars to someone with no source of income?
- aerogant, on 12/13/2007, -0/+1Where did you read that GamerVer05? From what I have read the situation is more of what OnGard4Liberty said, that lenders and buyers were taking more risks because the low interest rates. This also increased demand for houses, which also artificially increases the value of houses, the people who were on a variable rate who could originally afford it all of a sudden found they couldn't afford to keep their house and had to foreclose. The problem is the house isn't really worth that much, so the bank is going to have to sell the house at a loss anyway. At least that is my understanding.
- OnGard4Liberty, on 12/09/2007, -0/+4I agree that people should be responsible for their actions. So when we talk about a lending crisis, it's not to say that the banks are blameless. However, the Federal Reserve, by creating artificially low interest rates, distorts market signals. It makes things seem better than they are. Because of this, people buy houses when they can't afford it, people make more money (or so it seems), and banks lend more. This bubble gets bigger and bigger until it bursts.
- GamerVer05, on 12/09/2007, -0/+2So low that the banks cant be responsible for their own actions?
- WiseWeasel, on 12/08/2007, -1/+2No, it was the Federal Reserve's, giving such low interest rates. They're private.
- woshka, on 12/07/2007, -3/+14GOVERNMENT, TAKE NOTE, YOU ALL SUCK WITH MONETARY POLICY - LET THE FREE MARKET HANDLE IT
- stalefries, on 12/08/2007, -1/+2WOSHKA, TAKE NOTE, PLEASE TURN OFF CAPS LOCK - IT IS NOT NECESSARY
- dsmx, on 12/08/2007, -3/+1YES IT IS
- stalefries, on 12/08/2007, -1/+2WOSHKA, TAKE NOTE, PLEASE TURN OFF CAPS LOCK - IT IS NOT NECESSARY
- fusuke31, on 12/08/2007, -1/+0Here is an interesting article on Money and the Credit Cycle:
http://digg.com/business_finance/Are_we_on_the_bri ... - rukkyg, on 12/08/2007, -2/+5Yes, let's take away all the programs that help working poor buy houses instead of renting. Because THEY'RE the ones who bought $500k homes on sub-prime mortgages and can't afford them now.
- NSResponder, on 12/09/2007, -0/+1Do you believe that a borrower benefits if they take out a loan that they can't afford?
-jcr - runderwo, on 12/09/2007, -0/+1This is nonsense, taxpayer-subsizied programs can exist without the federal government -- and certainly without the loose credit of the Federal Reserve that gives us a boom and bust cycle along with cheap credit.
- betterth, on 12/12/2007, -0/+1Theres no shame in renting, and just because owning a home is part of the American dream, it doesn't mean that it's our duty to make sure that every single American has the capability to own their own home.
- NSResponder, on 12/09/2007, -0/+1Do you believe that a borrower benefits if they take out a loan that they can't afford?
- cespee, on 12/08/2007, -1/+9I hate people who buy houses because they literally spend 70% of their monthly budget on a mortgage payment from a floating interest loan. It prevents normal people from being able to buy a normal house at a normal price.
I wonder if government intervention is also causing the "health care" crisis. (i.e., limiting the number of doctors and allowing them to be the gatekeepers of all drugs, not allowing nurses to open up inexpensive clinics in Walmart, having Medicare but not negotiating drug prices or health care prices, not opening up the insurance business to real competition by allowing tax subsidies to employers who provide health care (thereby preventing people from individually shopping around for good insurance)). My kid got sick when I went to Jamaica. We got to see a nurse who worked for the hotel for free. We can't do that here. A pediatrician charged us $500 for speaking with us for 5 minutes when my third child was born at the hospital.- runderwo, on 12/09/2007, -0/+1Yes, government over-regulation and monopolization (HMO Act) created the health care crisis.
Your rant against people who buy houses makes no sense whatsoever. Blame the market distortions caused by loose monetary policy, and financial crisis bailouts, that allows loan issuers to hand out those ridiculous loans in the first place.
- runderwo, on 12/09/2007, -0/+1Yes, government over-regulation and monopolization (HMO Act) created the health care crisis.
- bvagasky, on 12/08/2007, -0/+10Ron Paul is the only guy with any amount of real experience and expertise on that stage, from either party.
- NSResponder, on 12/09/2007, -0/+4There are others with experience, but they're part of the problem. ;-)
-jcr
- NSResponder, on 12/09/2007, -0/+4There are others with experience, but they're part of the problem. ;-)
- OnGard4Liberty, on 12/09/2007, -0/+5"I am a friend of the Free State Project. Check it out...and if you like it, join and continue the effort!" -- Rep. Ron Paul
http://www.freestateproject.org/intro/ron_paul - jana67, on 12/09/2007, -0/+4Posted this article on my Squidoo lens: Ron Paul: The Best HopeForAmerica Ever
- nixrtkls, on 12/10/2007, -0/+3Ron Paul's position on this indicates his Beltway mentality. Three issues led to the current mortgage crisis.
1. Subprime loans (loosely defined as loans given to borrowers who were not otherwise credit worthy). What did you expect? People who can't pay their current bills to actually be able to pay even higher bills when the rates adjusted? These lenders and investors got what they deserved. Don't ask me to bail you out! The borrowers got screwed and the investors did too. To me the big victims were the uneducated borrowers.
2. Jumbo loans. Not typically a problem but when the "appreciation" rate was over 5% per year, any fool could have predicted a slow down in appreciation or even depreciation. And why would someone buying a $500k home need a 90% ltv mortgage? Suck it up, investors, you did this to yourselves!
3. Job and wage losses. For marginal borrowers who live paycheck to paycheck, a pink slip means future foreclosure on your home. Keep the jobs coming, pay wages that allow Americans to own homes, and the housing market will be restored.
Look under the hood and you'll find faulty appraisals, fraudulent mortgage applications, and alot of greed. - JeffDaiell, on 12/12/2007, -0/+1 Comparisons to Reagan are actually a slight to Dr. Paul. The Federal Government shrank very little, if at all, under Reagan, and actually took in a lot more money than previously. Dr. Paul, if he has enough supporters in Congress, would actually reduce the size of the Federal Government. The question is: will enough limited-government advocates be elected to Congress? -- Jeff Daiell
- ChanceLonestar, on 12/26/2007, -0/+1The Doc of Economics!
- 8secretlove, on 01/05/2008, -1/+1Dr. Ron Paul told us that the subprime mortgage crisis was created by "the government" in secret! http://www.digg.com/business_finance/Ron_Paul_Uses ...
- synarchy, on 01/05/2008, -0/+1Stop posting this crap and STOP trying to link it to Ron Paul.
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