sapphi_snake said:
Kasz216 said:
Libretarian's aren't Anarchists. They believe that it's the governments job to be an impartial referee.
The only positive I can see towards a Libretarians belief system is it basically rebuts the liberal claim that the rich should pay more because the rich benefit more from the government existing.
When the government disapears, the rich take their place.
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Hmmm, I wouldn't really say that. When the market if too free and unregulated corporations become too big and gain too much power. They'll start corrupting the Government and avoid what little regulations there are. Isn't that what basically happened in your country that led to the crisis?
And don't the rich really benefit from the existence of a Government, in the sense that they only have wealth in the context of a society? And doesn't the Government protect their wealth? (And don't they essentially control the Government anyway?)
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No. It's not like the US housing bubble was the only housing bubble.
What caused it... was more or less government.
It's a rather complicated thing to explain, but i'll try to put it simply.
Wealth isn't physical. So if someone makes a videgame that sells only in his own country, he still raises his GDP because he's created something of "value."
Bankers have been doing the same thing, by creating complicated morgage payments and insurance. They created so much wealth, that basically if you wanted to "buy" all this wealth. It would cost you 20 times the amount of money that exists in the world. So without it at this point... we'd be in trouble.
They did this basically making "Protection payments" to each other and other buisnesses to cover them if they fail.
In the US, they were structured so that they would never collapse unless there was a nationwide housing bubble. Which basically a guranteed win... because up until 2006... there was no thing as a nationwide housing bubble!
It's normally impossible in a country like the US. As prices fall in one area of the country, they rise in other areas... because there is always a "hot" are to live in, and it's all regional.
As such, the US found the way to make the impossible possible... and began a bunch of initatives to drive house buying... by tax incentives and artificially lowering interest rates and even ordering banks it controlled to make riskier loans. (the so called sub prime loans.)
So it created a nationwide boom in housing prices, because so many more people wanted to buy and build houses.
This eventually lead to a nationwide bust... because a lot of the people who bought houses either bought houses they couldn't afford, or just weren't the types to be able to keep up on payments at all.
This caused an unusual number of people to bankrupt which caused those people who were being paid money to actually have to pay the people who were paying them. Which then lead to them having to up the rates on the morgages they owned and forclose on people who they previously gave extensions to beacause they needed the money.
The increase in rates caused people regular people to forclose because while living responsibly they weren't ready for their rates to explode. Which caused even more of a shortfall, which caused rates to go even higher...
well you see the point.
People argue the derivitives were the problem, but in a normal market... they would of never crashed... meanwhile, we probably wouldn't even be as well off now had the "proper" controls be in place.
I mean, take out 20 times the value of the world currencies out of the economy... and where are we exactly?
It's a lot like blaming someone for not having purchased expensive volcano insurance when they live next to a volcano that's been dormant for 1000 years because you weren't expecting a government bomb suddenly reigniting it.