Democrats Caused Housing Mess

[mesoteto]

ManusJustus said:

mesoteto said:

if the majority of people who took out the loans and such (which are the real problem) had know what they were getting into and been warned about the dangers then most of this woe could have been avoided

Theoretically, the free market would have corrected that.  However, the theory behind the free market fixing itself has been proven wrong.  What we need is government intervention.

If your doctor told you had a disease and you should take a pill, would you?  Most people dont have the ability to make a decision for themselves, so they have to trust the doctor.  To prevent the doctor from taking advantage of the patient, government regulation is required.

Same goes for loans.  People who dont understand financing have to trust their lender/financial advisor, who can easily convince them to take a certain plan.  Just like it doesnt take much for a doctor to convince you to take a presicription.  Likewise, government regulation is needed to prevent lenders/financial advisors from taking advantage of people.

And noone has to rewrite economic thought in the process, its already understood that assymentry in information is reason for government intervention.

agreed, a combination of the two would be the ideal situation limit what a bank can offer and educate the individual as to the best offer and what they should avoid