Common Fallacies, Economy
- 1977-1995 From CRA to ACORN, banks were forced into giving loans to people with bad credit and insufficient incomes.
- 1992 HUD forced Freddie and Fannie to purchase the loans
- 1995 Treasury Department established the Community Development Financial Institutions Funds which funded banks with tax dollars to encourage even more risky loans.
- Federal Reserve slashed interest rates and then raised them, causing major problems for people paying loans.
- Rational people in government tried desperately to prevent the disaster, but once these programs start, they’re virtually unstoppable: http://www.youtube.com/watch?v=_MGT_cSi7Rs&NR=1 and http://www.youtube.com/watch?v=cMnSp4qEXNM&feature=related.