http://ulstermanbooks.com/didnt-destroy-america-completely-first-time-lets-try/In 2008 the entire U.S. economy buckled under the weight of more than a trillion dollars of bad debt as financial institutions crumbled and the American government stepped in to take advantage of the crisis by enacting more federal controls and spending even more money. A multi-year and quite severe recession followed, and then this morphed into system propped up by the Fed printing empty dollars and the appearance of economic normalcy. The United States economy remains weak though, and as susceptible as ever to another crisis.
And now, that crisis is being developed yet again to finish off what was not quite destroyed in 2008…
Recently, economist Robert Wiedemer, who accurately warned of the Great Recession of 2008 two years earlier, is now warning the United States is on the verge of an even greater collapse:
“The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting as soon as next year.”
Wiedemer’s detractors, and there are many, brush aside his warnings as preposterous, or the results of trying to sell another book. Perhaps there is some truth to that, but then another headline would suggest some ominous days may very well be ahead of us:
Efforts to jump-start housing stoke fears of another crisis
For the last twelve months Mel Watt, the Obama government appointed head of Fannie and Freddie Mac, which originate the vast majority of mortgage loans in the United States, is utilizing the very same “homes for everyone” policies that created the foundation for the housing crisis a decade earlier, a crisis that almost brought the nation’s entire economic system to a halt once those bad loans began defaulting at a rate the system could not absorb.
“He’s taking whatever mortgage credit’s available and subsidizing less creditworthy borrowers,” said Douglas Holtz-Eakin, president of the American Action Forum right-of-center think tank. “That is qualitatively the same mistake that was made going into the housing crisis,” he said, although he noted it is not occurring on the same scale.
Concern over Watt’s credit-easing actions is enough to be raising alarms within Congress as a handful of Republicans are now calling for increased oversight both Fannie and Freddie Mac. Again, this alarm mirrors that raised by Republicans in 2002 and 2003 when Republicans issued a “systemic risk” warning regarding the size of the government-run lending institutions, indicating then that if the loan market were to collapse it would quickly infect other parts of the American economy. At the time, Democrats called the warnings by Republicans racist (yes they actually played the race card), saying Republicans were trying to make it more difficult for minorities to get homes. Race had nothing to do with it of course, it was simple economics. Give millions of people loans for which they were not qualified and unable to pay back is not prudent business and could lead to dire consequences as in fact happened in 2008 and beyond.
The following video is a good refresher of those warnings that went unheeded by Democrats, who pushed for fewer regulations and more loans to unqualified home buyers, and then after the Great Recession they created was underway, had the audacity to blame Republicans for the mess!
http://www.youtube.com/watch?v=cMnSp4qEXNMNow the Obama administration is doing the very same thing to the lending environment – pushing Fannie and Freddie Mac to lessen credit standards and provide more loans to otherwise less than qualified candidates.
What wasn’t successful in destroying the United States in 2008 is being attempted once again in 2015.
-DWU
Posted by ulsterman
January 5, 2015
