What HappySqurriel said.

And not only that, when this happened, it expanded the number of people who could buy a home. When it went from 60% to 66%, you now have 10% more people look for a house then you have houses. This increased the value of homes.

Builders built to try and provide enough homes, but government kept lowering standards, to the point where people qualifying was at 75%. Once they hit around 75%, they could not go higher (the other 25% either don't want to buy, or are of such low credit standards, that nothing will make them a fair risk).

Once it stopped at 75%, builders caught up. That's a lot of building, and it took 14 years.

Once they caught up, these ARM's that people were refinancing every 3 years to stay in there homes couldn't happen, because there house didn't go up in value. So they foreclosed. This then caused the market to adjust right back to where it should have been all along. Now not only are you having people who can't afford to stay in there homes foreclosing, but you have people who are well off, but would rather take the credit hit, then pay 400K on a house worth 250. Great credit to them, is not worth paying $150,000.

All of this could have been avoided, if Clinton had not tried to get us to 66% (and all the other shit that Government did between now and then).

Clinton himself says he should not have done it, and takes ownership of it in this interview. The part about all this stuff, is at 3:20.

What happy said didn't address my point, in fact he pretty much showed that it had nothing to do with government action.  Look at the chart that happy provided, home prices adjusted for inflation didn't exceed historical norms until 2001, that means that most of the activity in Subprime leanding and in housing price bubbling didn't occur until after the last recession which followed the dot com burst and 9/11.  This shows it had very little to do with anything the government did with regards to expanding housing back in 92.

Look at the chart again. House prices started to rise in 1993, and inflation adjusted in 1997.

Look closer inflation adjusted wasn't until 1998, inflation adjusted is all that matters, because the value of a dollar isn't constant, and it didn't pass historical norms until 2000-2001, notice that hump back in 89-90?  So like I said it wasn't until this decade that prices and subprime lending became an issue, and the liklihood was that rising home prices was due to much more low interest rates and bush's tax cuts generating demand and the banks loosening up their lending prices to make more money on that demand that was the cause, not any decision to expand housing.

So you're saying Clinton was wrong when he said he helped cause this?

I'm not really concerned with what he says, he's neither an economist nor a banker, etc.  The fact is that the jump in home prices and the subprime leanding is too late to really be attributable to anythig he did with regards to housing.

wow, ok, then I guess we are done. When the President of the US does something that is unheard of (takes responsibility for something that's gone wrong), and that's not enough to convince you, I am sure nothing out of my mouth will.

You have your views, and they are obviously unchangeable. See you in another thread :)