Thread: The Blame Belongs on Government

The Blame Belongs on Government

Posted in Politics & Government on September 26th, 2008

Most of our representatives in congress seem to agree that the current financial crisis is the result of the high rate of foreclosures and the falling value of homes. But what we are not being told is that the housing crisis was brought about by the Democrats insistence that savings and loan companies and mortgage outfits give loans to virtually anyone who walked through their door regardless of income or their ability to pay back the money they were borrowing. The creative financing, the zero interest home loans and all of the other mortgage strategies that crumbled in on top of the economy were created solely to meet the demand of people wanting to buy houses well beyond their financial means, people who previously would have been denied a loan by any bank in the country because they had no possible way of fulfilling the financial obligation they were entering into.

The entire Democratic Party can deny this until they are blue in the face but the fact remains that they are the ones who made it possible for burger flippers earning $12,000 a year and illegal aliens making even less to purchase $6 and 7 hundred thousand dollar homes with a credit score of 175, twelve maxed out credit cards and a brand new BMW that gets repossessed on the average of once every other month. The current financial crisis can be undeniably traced back to two congressional legislative acts and both of them were proposed and supported by the Democratic Party and both were both passed into law during congressional sessions where the Democrats held a majority in both chambers. The first is the Equal Credit Opportunity Act (ECOA) enacted in 1974 during the Democrat dominated 93rd session of the United States Congress, and the second is the Community Reinvestment Act (CRA) which was passed by the Democrat dominated 95th United States Congress and signed into law by the Democratic president Jimmy Carter in 1977.

For any that don’t already know, the Community Reinvestment Act (CRA) is a United States federal law that requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services. The purpose of the CRA was to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses. Under the Clinton administration the CRA was amended to include minority quotas that the lending agencies and banks had to meet before they would be considered eligible to expand their business or merge with another lending institution. There were also financial penalties for lending institutions that failed to comply with the regulations. In order to meet these minority quotas the lending institutions were forced to relax their standards for lending to the extreme point that an unemployed individual whose only source of income was their monthly welfare check could get a loan to buy a $600,000 house.

Every attempt to modify the Community Reinvestment Act including George W. Bush’s 2003 proposal for regulatory overhaul in the housing finance industry has been stymied by the congressional Democrats who have derided each and every attempt to forestall what we are seeing today as a return to racist and discriminatory policies. Despite everything currently being said in the liberal press even Bill Clinton has substantiated the fact that the Democrats are the ones who have stonewalled reform efforts aimed at the housing finance industry and last Thursday he publicly stated to ABC’s Chris Cuomo that for years they have been “resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.â€

YES THEY WANTED THE BANKS TO GIVE OUT LOANS TO ANYONE....ANYONE!!! SO THAT PEOPLE COULD AFFORD HOUSES THEY CAME UP THESE SUBPRIME LOANS.

THE HOUSING MARKET WOULD HAVE DECLINED WITHOUT IT BECAUSE LESS AND LESS AMERICANS COULD AFFORD A HOUSE DUE TO DECLINING WAGES. BUT OF COURSE THEY NEEDED TO KEEP THEIR CHEAP FOREIGN LABOR. AND THE BANKS FIGURED THEY WOULD GET BAILED OUT IN THE END.

BUT THE FACT REMAINS THAT MANY AMERICANS COULD NO LONGER AFFORD A HOUSE.

THE WAY TO STOP THE DECLINE IN THE HOUSING MARKET YEARS AGO WOULD HAVE BEEN TO DEPORT THE ILLEGALS AND PUT A STOP TO WORK VISAS. THIS WOULD DRIVE UP WAGES AND THEN MORE AMERICANS COULD HAVE AFFORDED A HOUSE.

THE MINIMUM WAGE COULD HAVE RISEN WITH THE COST OF LIVING AS WELL. THAT WOULD HAVE HELPED. HIGHER WAGES WOULD HAVE FED THE ECONOMY...ESPECIALLY IF AMERICANS WERE GETTING THOSE WAGES. THEY WOULD SPEND THE MONEY HERE INSTEAD OF SENDING IT OUT OF THE COUNTRY.

ALSO HIGHER WAGES WOULD HAVE MEANT MORE TAX MONEY GOING TO LOCAL, STATE AND FEDERAL GOVERNMENTS. IT WOULD ALSO HAVE PUT MORE MONEY INTO THE SOCIAL SECURITY FUND AND MEDICARE FUND. MANY OF THE CRISIS WE ARE FACING WERE DUE TO LETTING ILLEGAL WORKERS AND FOREIGN WORKERS COME INTO THE COUNTRY AND DEPRESS WAGES.