As the public has forgotten, let’s sum up the basic cause of the housing bubble and the financial downturn that has culminated in our current Great Recession. Politicians have rewritten the script to suit their cause.
Wall Street was saddled with subprime loans which it marketed, thanks to the liquidity promoted by the Federal Reserve.
Those subprime loans were given birth by:
1: The 1992 Federal Housing Enterprises Financial Safety and Soundness Act (GSE Act)
2: Fannie Mae and Freddie Mac who were to buy $6 trillion of single-family loans over 16 years.
3: The 1977 Community Reinvestment Act (CRA) to low income and moderate income communities.
4: Aide from Acorn (Association of Community Organizations for Reform Now)
It would therefore appear the deep recession we have is a result of our Congress and its pandering populist politicians who blame everyone but themselves for the imposed disaster.
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