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Thread: "For Chinese, US election is entertaining"

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[quote=SETH,327654]Hi Bittersweet - I don't think Mr. Paulson deserves blame or not, but the problems with credit, housing mortgages, and bad loans started years back, during the Clinton administration (or so I have read). When legislation was passed that encouraged Fannie Mae and Freddie Mac to get as many people into houses as possible (backed strongly by Barney Franks and other prominent Democrats), the lending institutions started giving out 'no-document' or 'liar' loans to people who would not qualify for mortages under normal circumstances. They even counted welfare checks as income!

The housing market was booming, so with housing values rising, people started borrowing against equity in their houses, sometimes OVER the market value of the house! This is disasterous economics just waiting for the bubble to pop. And pop it did.

Now, many many MANY homeowners are what they call 'upside down'. That is, they owe more on their house than the house is worth, PLUS the adjustable rate mortgages they took have climbing interest rates that make house payments impossible! So people are defaulting on their houses by the millions, and all the banks own what is called 'toxic paper', or useless loans that will never get paid.

The whole thing took YEARS to grow to the current mess, and people are wishing for a quick fix. But a quick fix won't happen because of the time it will take to unravel the mess. Plus all these vacant houses are out there, decaying and losing value by the minute. Also, where do people think the $700 billion dollars will come from? The taxpayers, of course, and mainly the middle class taxpayer. I am thinking it will get uglier before it gets better. :-((

So it is easy for the Democrats to blame the Republicans, but I think people need to look deeper into the problem and NOT re-elect the greedy irresponsible jerks who really caused the mess.[/quote]

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