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GuyWithHighIQ on 27 June 2015
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carl_barx said:
SamuelRSmith said:
 

a) That is a very unsubstantiated graph. Both how deficits and GDP are measured have changed over time. In addition to this, GDP is dramatically higher, thus you can have higher deficits at a lower "percentage of GDP". The point may still be correct, I don't know, but that graph isn't evidence.

b) Yes, they are.

c) The economic crisis of 2008 was bigger than any one President. The housing bubble was a result of loose monetary policy from the Federal Reserve, with cash flowing out of the dotcom bust and into housing. It can be argued that specific policies channeled this flow into housing, from both the Bush and Clinton administrations... however, that bubble would have just formed elsewhere.

There are still bubbles waiting to be popped... tech, cars, stock market, etc. Buckle yourself in, we're in for one wild ride.

the housing bubble had nothing AT ALL to do with the federal reserve or with the dotcom bubble of 2000-01 (the latter is a separate economic recession resulting from speculation on internet startups, and the former has actually helped, through quantitative easing, to keep interest rates down during the recession and encourage investment)... it had to do with deregulation of the banks begun by reagan, continued (unfortunately) by clinton and congressional republicans, and continued even more enthusiastically by george w. bush (all wikipedia, hopefully you don't think they're left-wing...).

as for your catastrophism about the future, i can't really answer to that. you can't safeguard against all risk, but to be honest, it is republican economic policy that caused the great recession for the most part, and i think that needs to be recognized (which, to be fair, you sort of do in your post above).

Unfortunately, you are wrong as well.

Deregulation is irrelevant to this discussion. Banks don't stupidly hand out loans to people who can't possibly pay them back unless they were sponsored and insured by the government, which they were.

The housing bubble was created by entitlement policies spearheaded by the left. Back then, Liberals thought having a big, 6-bedroom house was a 'human right', so they used the government to force banks to give out millions in loans to minimum-wage earners. They assumed that these borrowers would keep the house for 5 or so years and then sell it when the price of the house was much higher thanks to the bubble. Banks, being reasonable, was cautious about such an arrangement, since if the bubble popped, those who are currently waiting for their housing values to appreciate would be in the red.

The government assured the banks that if the bubble did pop, the government would cover their outstanding balances. This was the green-light the banks needed to make reckless loans. Think about it. They're already making huge profits from the housing bubble, and if the bubble does pop, the government would bail them out. It's a win-win situation for them.

The housing market collapse was the result of government interference in the housing market.