Federal Government Caused Financial Crisis in America

The federal government caused the financial crisis in America. It wasn't Wall Street, financial and banking institutions, the car industry, the insurance industry, or big business...it was primarily driven by the federal government.

It started with The Community Reinvestment Act (CRA) that was enacted during the Carter administration. Like so many government programs the purpose of it sounded good, to support lower income people in purchasing homes, but it turned out to be anything but. Many of us have experienced living in rented housing or in humble homes, because that was what we could afford. Looking back that was a very happy and comfortable environment. But that wasn't good enough for the federal government. The CRA got a major push during the Clinton administration and this continued into the Bush administration. What this amounted to was that the federal government wanted to push low income people into expensive homes with no rational formula of affordability involved.

At one time a simple formula was used by lending institutions based upon income. This went out the window. Extreme pressure and false guarantees were given by the federal government and the government sponsored enterprises, Fannie Mae, and Freddie Mac. These institutions have been riddled with corruption, political paybacks, executive pay scandals, and more...and they are one of the prime reasons behind the current failure of our economy. The leadership over them by Congressman Barney Frank and Senator Chris Dodd was incompetent, deceitful, if not criminal. They are both on record in guaranteeing the solvency of these institutions when just the opposite was true.

No one looked at the fact that you don't help low income people by convincing them to buy expensive homes that they can't afford only to lead them and their families into the misery of financial failure and foreclosure. No one looked at the fact that hundreds of thousands of these mortgage loans, if not millions, would lead to an accumulation of hundreds of billions of dollars of financial failure that would help destroy the economy of America. We see that result today. Yet even having this fully exposed, we are embarking on the same path again!

What we must do:

The Community Reinvestment Act should be repealed. The federal government should set up guidelines (not control) for responsible lending under affordable conditions, not those destined for sure failure.

Freddie Mac and Fannie Mae should be eliminated as federal government sponsored enterprises. Mortgage, banking, and acting as an intermediary on mortgages, lending, etc. should cease. Banking, lending, and mortgage functions should be private, not government controlled. Cut out the cancer.

There should be an investigation into the deceitful leadership of Congressman Barney Frank and Senator Chris Dodd who purposely misled the American people resulting in our current financial crisis.

It is time to bring America back to basic financial discipline and sanity, and rid ourselves of corrupt leadership.