The Economic Crisis

People, please stop falling for all the excuses that the government and its subservient media is handing you. This is not a matter of too little regulation, greed, stupid homeowners or whatever.

Those are consequences of the root cause-excessive money and credit creation by the Federal Reserve Bank. They did this to keep interest rates artificially low in the face of massive government deficits and borrowing.

Normally, the borrowing, being so huge to finance both the welfare state and two nonsensical wars, would have driven interest rates very high. By creating new money, they bought back much of that debt and pushed interest rates back down.

The consequence of all that is a rapidly increasing money supply and higher prices for everything. Now how could an ordinary person not notice how the prices of real estate kept going up and interest rates stayed low. It was like manna from heaven and people took advantage of the situation to make money on a "sure thing". Tell me that you did not think that real estate only goes up in price.

This is the classical bubble described in text books for hundreds of years. It is an old game played by government that ALWAYS bursts giving drastically lower prices and bad debts.
The best solution is drastically reduce government spending so no new borrowing is needed, lower taxes and get out of the way. The economy will recover in a year or so.
But instead, our brilliant leadership (both the R and D kind) think that the hair of the dog is the solution. Let's spend even more and inflate the money supply even more to get things back where they used to be, Let's try to reinflate the bubble.

That can't work and never has though it has been tried. The 1930s was an example of further money creation (and they even raised taxes and tariffs) causing the economy to stay bad for a decade. That is right folks, the New Deal did not work. The New New deal will fail just the same.

If you don't learn from history, you get to repeat it!