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Big Government Responsible for Housing Bubble[Ron Paul]
House.gov ^ | 11 May 2008 | Ron Paul

Posted on 05/13/2008 3:03:32 PM PDT by BGHater

The House passed two bills attempting to rehabilitate the housing and mortgage market this week. There doesn't seem to be any shortage of criticism and blame for the bad decisions, and rightly so. Lenders and banks do share much of the blame for the overheated market. Lending standards were relaxed, or even abandoned altogether, creating an exaggerated pool of homebuyers that led to ballooning home prices that many, especially real estate investors, expected to continue forever. Now that the bubble has burst, the losses are staggering.

However, many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place. The Federal Reserve’s artificially low interest rates created the loose, easy credit that ignited a voracious appetite in the banks for borrowers. People made these lending and buying decisions based on market conditions that were wildly manipulated by government. But part of sound financial management should be recognizing untenable or falsified economic conditions and adjusting risk accordingly. Many banks failed to do that and are now looking to taxpayers to pick up the pieces. This is wrong-headed and unfair, but Congress is attempting to do it anyway.

These housing bills address the crisis in exactly the wrong way, by seeking to hide the problem with more disastrous government bail-outs and interventions. One measure, HR 5830 the Federal Housing Administration (FHA) Housing Stabilization and Homeowner Retention Act would allow the FHA to guarantee as much as $300 billion worth of refinanced home loans for those facing threat of foreclosure. HR 5818 the Neighborhood Stabilization Act, would provide $15 billion in loans and grants to localities to purchase and renovate foreclosed homes with the object of then selling or renting out those homes. Thankfully, President Bush has vowed to veto both of these bills. It is neither morally right nor fiscally wise to socialize private losses in this way.

The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some. We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them. It is a terrible idea to spread the financial crisis any wider or deeper than it already is, and to prolong the agony years into the future. Socializing the losses now will only create more unintended consequences that will give new excuses for further government interventions in the future. This is how government grows - by claiming to correct the mistakes it earlier created, all the while constantly shaking down the taxpayer. The market needs a chance to correct itself, and Congress needs to avoid making the situation worse by pretending to ride to the rescue.


TOPICS: Business/Economy; Editorial; Government; Politics/Elections
KEYWORDS: bubble; government; housing; lunatic; ronpaul; truther; youknowhesnuts

1 posted on 05/13/2008 3:03:33 PM PDT by BGHater
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To: BGHater

Not just the housing bubble.


2 posted on 05/13/2008 3:07:15 PM PDT by wastedyears (The US Military is what goes Bump in the night.)
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To: BGHater

He’s not far off on this one.


3 posted on 05/13/2008 3:09:56 PM PDT by pissant (THE Conservative party: www.falconparty.com)
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To: BGHater
"However, many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place."

Bears repeating, over and over and over

Politicians are the only people in the world who create problems and then campaign against them. Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits? Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes? You and I don’t propose a federal budget. The president does. You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does. You and I don’t write the tax code, Congress does. You and I don’t set fiscal policy, Congress does. You and I don’t control monetary policy, The Federal Reserve Bank does. One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of the 300 million - are directly, legally, morally and individually responsible for the domestic problems that plague this country. I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank. I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman or a president to do one cotton-picking thing. I don’t care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes. Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party. What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it. The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to. It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted — by present facts - of incompetence and irresponsibility. I can’t think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist. If the tax code is unfair, it’s because they want it unfair. If the budget is in the red, it’s because they want it in the red. If the Marines are in Iraq , it’s because they want them in Iraq . If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way. There are no insoluble government problems. Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like ‘the economy,’ ‘inflation’ or ‘politics’ that prevent them from doing what they take an oath to do. Those 545 people, and they alone, are responsible. They, and they alone, have the power. They, and they alone, should be held accountable by the people who are their bosses - provided the voters have the gumption to manage their own employees. We should vote all of them out of office and clean up their mess! Charlie Reese is a former columnist of the Orlando Sentinel Newspaper

4 posted on 05/13/2008 3:13:20 PM PDT by Las Vegas Ron (Election '08, the year McCain defined the word "dilemma")
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To: All

Sorry about the format


5 posted on 05/13/2008 3:14:22 PM PDT by Las Vegas Ron (Election '08, the year McCain defined the word "dilemma")
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To: BGHater

Good Post

Ron is Right


6 posted on 05/13/2008 3:15:27 PM PDT by cowtowney
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To: BGHater

More power to Ron Paul on this - he is on the mark.

But his international perspective remains painfully lacking and, yes, naive. Would that we could be isolationist. But that world no longer exists.


7 posted on 05/13/2008 3:17:00 PM PDT by mtntop3
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To: Las Vegas Ron
Try agian:

Politicians are the only people in the world who create problems and then campaign against them. Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits? Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes? You and I don’t propose a federal budget. The president does. You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does. You and I don’t write the tax code, Congress does. You and I don’t set fiscal policy, Congress does. You and I don’t control monetary policy, The Federal Reserve Bank does. One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of the 300 million - are directly, legally, morally and individually responsible for the domestic problems that plague this country. I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank. I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman or a president to do one cotton-picking thing. I don’t care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes. Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party. What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it. The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to. It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted — by present facts - of incompetence and irresponsibility. I can’t think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist. If the tax code is unfair, it’s because they want it unfair. If the budget is in the red, it’s because they want it in the red. If the Marines are in Iraq , it’s because they want them in Iraq . If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way. There are no insoluble government problems. Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like ‘the economy,’ ‘inflation’ or ‘politics’ that prevent them from doing what they take an oath to do. Those 545 people, and they alone, are responsible. They, and they alone, have the power. They, and they alone, should be held accountable by the people who are their bosses - provided the voters have the gumption to manage their own employees. We should vote all of them out of office and clean up their mess! Charlie Reese is a former columnist of the Orlando Sentinel Newspaper

8 posted on 05/13/2008 3:18:18 PM PDT by Las Vegas Ron (Election '08, the year McCain defined the word "dilemma")
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To: Las Vegas Ron

Nuts


9 posted on 05/13/2008 3:19:09 PM PDT by Las Vegas Ron (Election '08, the year McCain defined the word "dilemma")
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To: cowtowney

Thanks ;^)


10 posted on 05/13/2008 3:20:35 PM PDT by Las Vegas Ron (Election '08, the year McCain defined the word "dilemma")
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To: BGHater

I heard its a low cost housing bill. Instead of giving affordable deals to hardworking families with good credit they will hand it out to undeserving bums who will spread urban blight and white flight ......happens time and time again .....socialism at its finest


11 posted on 05/13/2008 3:30:28 PM PDT by KTM rider (Obama or McCain....socialist or socialist light !)
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To: Las Vegas Ron
<p> tags are your friend...
12 posted on 05/13/2008 3:42:10 PM PDT by dan1123 (If you want to find a person's true religion, ask them what makes them a "good person".)
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To: BGHater

What a kook! Get this man his thorazine. Big-government causing problems? Hogwash. Impossible. That is as preposterous as the notion that the government caused or prolonged the great depression, which everyone knows was caused by greedy capitalists - just like this mortgage problem. And just like expensive medicine - this Ron Paul character is happy to let the drug companies charge whatever they want! If FREE healthcare is not part of FREEdom, then what else could be?? Damn liberaltarians.

At least we have a strong pro-government intervention candidate in John McCain, who advocates punishing those greedy lending institutions, and making wealthy taxpayers (don’t worry, only the REALLY wealthy ones, like you know, other people hopefully richer than you...hopefully) accept the risk for bad mortgage candidates. He will even stick it to Big Pharma. If only pro-war socialism had a catchy name.


13 posted on 05/13/2008 3:42:24 PM PDT by M203M4 (True Universal Suffrage: Pets of dead illegal-immigrant felons voting Democrat (twice))
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To: M203M4
Big-government causing problems? Hogwash...At least we have a strong pro-government intervention candidate in John McCain

I think people here are in mostly complete agreement with Ron Paul on domestic issues. The problem was his leftist view of America abroad.

14 posted on 05/13/2008 3:45:41 PM PDT by dan1123 (If you want to find a person's true religion, ask them what makes them a "good person".)
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To: M203M4
...If only pro-war socialism had a catchy name.

Republicans?

15 posted on 05/13/2008 3:46:36 PM PDT by dread78645 (Evolution. A doomed theory since 1859.)
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To: dread78645

LOL


16 posted on 05/13/2008 3:51:24 PM PDT by Revelation 911
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To: mtntop3
But his international perspective remains painfully lacking and, yes, naive. Would that we could be isolationist. But that world no longer exists.

Why. I'm not a paul supporter, but one who is P***ed off at the thieving, lying, polititians from both parties. Our troops are placed at risk, and given a ROE that either ensures death or risks trial. Folks, both parties want to destroy our country, whether by design, or stupidity. It's only a matter of time. Fast by the Dems, slow but sure by the repubs. Taxation without representation : we fought a war against, now, doesn't seem to matter. All three presidential candidates laugh at the will of the people, and the people who contribute least get the power. Thank God I'm old, and hopefully will not have to witness the end.

17 posted on 05/13/2008 4:01:39 PM PDT by gunner03 ("03" Mustang)
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To: BGHater
The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some. We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them. It is a terrible idea to spread the financial crisis any wider or deeper than it already is, and to prolong the agony years into the future. Socializing the losses now will only create more unintended consequences that will give new excuses for further government interventions in the future. This is how government grows - by claiming to correct the mistakes it earlier created, all the while constantly shaking down the taxpayer. The market needs a chance to correct itself, and Congress needs to avoid making the situation worse by pretending to ride to the rescue.

Ron Paul either makes 100% sense or 0% sense. This is one of those times he makes 100% sense.
18 posted on 05/13/2008 4:37:23 PM PDT by af_vet_rr
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To: dan1123

I thought policing the world and providing for the defense of other countries was leftist policy?


19 posted on 05/13/2008 4:41:40 PM PDT by traviskicks (http://www.neoperspectives.com/Ron_Paul_2008.htm)
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To: BGHater

Yep. Ron Paul is dead accurate once again.


20 posted on 05/13/2008 4:43:21 PM PDT by ovrtaxt (This election is like running in the Special Olympics. Even if McCain wins, were still retarded.)
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To: pissant

He’s half right,

The other half of the problem was government letting Wall Street Police themselves. It wasn’t the government who said the securitization of the subprime mortgages were investment grade.


21 posted on 05/13/2008 4:43:41 PM PDT by Philly Nomad
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To: gunner03

“his international perspective remains painfully lacking and, yes, naive. “

Whats wrong in demanding that congress must declare war.

it has been 7 years now - not enought time?


22 posted on 05/13/2008 4:54:07 PM PDT by spanalot
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To: ovrtaxt

oh please.


23 posted on 05/13/2008 6:11:49 PM PDT by RDTF (my worst nightmare is being on jury duty sequestered with 11 liberals)
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To: dan1123

Ron Paul’s Foreign Policy POV is nearly identical to the way Bush campaigned in 2000 and what most Republicans believed until the Neo-cons took over the party early in his administration and begin pushing for Iraq Nation building. Go look up and read the text of the Bush/Gore debates if you don’t believe me. Bush painted Gore as the nation builder and Gore readily took that title. Bush whined about spending 1.6 billion in nation building once during Clinton.


24 posted on 05/13/2008 6:58:40 PM PDT by rb22982
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To: pissant

The Gramm-Leach-Bliley Act contributed to the housing bubble. Clinton signed this bill that scrapped the Glass-Steagall Act in 1999, at least the part that separated investment banks and commercial banks.

I think you’ll find that this opened the door to securitizing mortgages and treating them simply as investments. Divorcing the writing of mortgages from owning them is a huge invitation to fraudulent appraisals, loans to the unqualified, and the whole train of abuses that fueled the bubble.


25 posted on 05/13/2008 7:51:00 PM PDT by Pelham (Press 1 for English)
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To: mtntop3
But his international perspective remains painfully lacking and, yes, naive. Would that we could be isolationist. But that world no longer exists.

"Isolationist" is not the same thing as "non-interventionist."

26 posted on 05/13/2008 8:16:54 PM PDT by mvpel (Michael Pelletier)
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To: mvpel

Sorry, but I don’t see the distinction.


27 posted on 05/13/2008 8:35:11 PM PDT by mtntop3
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To: dread78645

Heh heh heh. = D


28 posted on 05/15/2008 4:58:56 AM PDT by murphE (I refuse to choose evil, even if it is the lesser of two)
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