Posted by Ray Kidder on 10/5/2008, 7:08 am, in reply to "Why SO much money"
71.178.12.102
Dear Readers,
In addition, my brother recently told me that one of the root causes of the mortgage crisis was a law that required mortgage companies to give out loans to people with high credit risks.
It is analogous to the way state governments sell subsidized automobile insurance to high risk drivers. Such drivers cannot purchase affordable policies so the government has to step in.
With mortgages, the government was essentially dumping the problem on the private sector. One additional difference may be that with home mortgages, it can be financially beneficial to walk away from your house and no longer pay the mortgage even when you have the ability to do so. With driving, I do not see any case where it is financially beneficial to get into accidents on purpose.
I think this is a case where Joe Biden was wrong in blaming the mortgage crisis on Republican promoted deregulation.
Ray Kidder
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