What happened is the democrats made Fannie Mae and Freddie Mac lend to certain people in minorities. Fannie Mae and Freddie Mac were not lending to those people because they were minorities but rather because they did not meet the financial requirements for the loan. However, due to pressures from certain democrats caused them to lend to these people anyway. When those people were unable to pay their mortgages, the housing market got screwed up and we are in the condition we are now.
I agree that the US economy was doing great. When all of this started, we were still fine, just not doing so well, but our economy was still average. The media, however, felt they needed to scare the population into hoarding money because we were heading into a recession. That is the main reason we are in a recession now. The economy is healthy when people spend money.
Now the government is trying to stimulate the economy by spending money. This does not make much sense. If we make 17 trillion dollars of money in one year, and the government spends 4 trillion, then the private sector only has 13 trillion to spend. It is a simple equation that has no exceptions. Also, the money they are spending to supposedly stimulate the economy will take so long to be spent that we may be out of the recession before it goes through. The more sensible thing would be to lower taxes. Then the private sector would have more money to spend now.
Keep in mind that all of this is almost the same thing that happened during the Roosevelt administration. The stock market crashed during the Hoover administration, and Hoover did little to "help" the economy. Two years after the stock market crash, unemployment was 9%. Then, Roosevelt's administration passed laws that was supposed to stimulate the economy. The unemployment immediately shot up to over 20%. causing the Great Depression. Roosevelt blamed all of the problems on Hoover, and it wasn't until afterwords did people learn he was a bad president.
