Quote:
Originally Posted by sck5
As for "putting things under government control" that is EXACTLY what too much deregulation has brought us. It is NOT A GOOD THING that the government now owns the mortgage market, the largest insurance company, and large parts of the banking system. Better regulation is preferable to government ownership. Most people would agree with that, and would not agree with the deregulation fanatics who say "let them all fail" because that would ruin too many lives.
THAT is the choice, - better regulation or another crash that results in government ownership of large parts of the economy. We can probably all agree that the latter isnt a very good outcome.
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sck5, there are two ways in which the government can
regulate an industry. Government can enact laws and regulations that
prohibit industry from doing unethical things that it wants to do, or it can enact laws and regulations that
encourage industry to do things that would otherwise be foolish. With regard to the current situation, the government regulated the home mortgage industry in the latter way. The government enacted regulations that encouraged lenders to loan money to home buyers, without regard to whether the buyer could afford the home. If the government hadn't done so, then lenders would have had to use their sound business judgment to decide whether a prospective borrower represented a good credit risk. If the lenders had done so, there wouldn't have been so many failing mortgage loans out there. The primary responsibility for this mess is Congress.
In short, government should not have adopted regulations that encouraged lenders to make bad loans. Government should have allowed the industry to rely on its sound business judgment in making such decisions.