What do you think it was? And don't give me the it was "Bush" or the "liberals" or Obama crap either. Real answers please. Argue with me. I feel it was the following:
1. The War. Regardless if it was right or wrong. It still cost us a pretty penny and war manufacturing this time around was nothing like WWII.
2. Home Mortgages and half of america defaulting on loans causing banks to deal with it or lose out.
3. Consumer education? Perhaps people are becoming more savvy on spending and taking better care of their stuff. They're not buying as much crap anymore.
Freethinker2008-10-21T16:52:03Z
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1) The Federal Reserve system, which causes us to pay interest on the money that Federal Reserve creates. Each time the Fed increases the supply of money, the value of the dollar declines.
2) 30 years of federal budget irresponsibility. Because the government has spent more money than they have made (with the exception of the brief surplus at the end of the 1990s), we have had to borrow more money from the Fed and from foreign nations, particularly China.
3) Irresponsible lending practices by greedy financial institutions, often at the urging of politicians. The President and many members of Congress (on both sides of the aisle) were pushing for making it so every American could own a home.
4) Poor and often uninformed financial decisions by the public. This goes beyond mortgages. We've been facing another credit crisis for over a decade...credit card debt. I'm reminded of the commercial from a couple years ago where the guy has a big house, a fancy car, and is a member of the golf club. He says "How can I afford all of this? I'm in debt up to my eyeballs".
5) The war. This goes back to the government borrowing money from the Fed and China. Much of the funds for the war are outside the Federal budget, so you have additional money being borrowed. More devaluation of the dollar.
6) The rise in the cost of energy.
7) With the devaluation of the dollar, prices went up. With the rise in interest rates, people couldn't pay their mortgages and foreclosures started to rise. With fewer people paying back their loans, banks didn't have enough money to cover cash transactions and so they went bankrupt. As a result, people started spending less money on non-essential consumer goods and services. This, in turn, caused a drop in sales, which caused a drop in stock prices, which caused people to panic and take their money out of the stock market and for employers to cut back their staffing.
The end result is high prices, rising unemployment, the fall in the stock market, tougher requirements for getting loans, and the giant government bailouts that further devalue the dollar.
Everyone knew it was happening, when they bought a house they could not afford with no money down and a liar's loan. It will not be fixed until the foreclosures are done, If ObamaPelosi tries to stop them, we could have 20 years of pain.
The Federal Reserves. Because of the FRB, it's gotten us into all situations since their existence. Caused wars, depressions, and everything imaginable. As more money is needed, who do you think is behind all of this?