Plan B Forum

The most significant development in American politics over recent decades has occurred within the Republican party: the triumph of right-wingism over conservatism.

In the mid- to late-nineties, America found itself in a huge mess. We had a mountain of debt, and because our outlays were still exceeding our revenues, it was getting worse.

So, on a bipartisan basis, we adopted a solidly conservative and economically sensible policy. Under a Republican Congress and a Democratic President, we started working our way toward solvency.

In a genuinely conservative way, we did not try to do everything at once. We made changes, of course, and we still debate the wisdom of some of the particulars. But the changes were not radical -- or, at least, not as radical as some wanted. We did not scrap the welfare system. We did not raise tax rates to historic highs; in fact, we kept the top marginal rate below half of its historical high.

And it was working. The first necessary step was to eliminate the budget deficit. That was an entirely conservative measure: When you find yourself in a hole, the first thing to do is to stop digging. It took a while, but we reduced the budget deficit more and more until we eliminated it. We got ourselves to the point where we had a budget surplus. That put us in a position to embark on the second necessary step: paying down the pre-existing debt.

The march toward solvency was going smoothly. Sure, the booming economy would not last forever, and in future years we would have made more or less progress depending on the circumstances. But we were moving in the right direction, and in a genuninely conservative way, we were making gradual but steady (with ups and downs) progress.

Then we decided to abort that successful strategy. We cut the revenue stream that was making it possible.

There was nothing conservative about that. There is nothing conservative about sabotaging a strategy that is working. There is nothing conservative about a fiscal approach that says "Now that we are finally in a position to start paying off a mountain of debt, let's disable ourselves from paying off that debt; let's go back to making that debt bigger and bigger."

So why did we do that? Why did we throw overboard a policy that was working and substitute for it a policy that everyone knew would result in more and moe debt? What would possess us to do such a thing?

Because the radical right took over: We changed that policy precisely because it was working.

Under the bipartisan, conservative policy of Gingrich-Clinton years, we were moving toward solvency. And we were doing so while maintaining, with some belt-tightening, the network of social services which the great the majority of Americans want the US government to provide. (I am not trying to minimize the impact on many families of the policy changes; in many instances they were devastating, and in at least some instances they were unjustified. Still, welfare-to-work is one thing; privatizing the entire Social Security system is something else.)

And that was the ultimate right-wing nightmare: A government that provides the social services which the great majority of Americans -- including a majority of Republicans -- want the government to provide and that remains solvent while doing so.

The right-wingers were desperately afraid. After all, a government that was both social-service-providing and solvent would blow apart their "government is the problem" ideology.

Government solvency had to be stopped. The right-wingers had to do something. Anything. So they set out to bankrupt the government.

And there were three basic options. The right-wingers could reduce the revenues of the government, thereby incapacitating the government from paying off the debt. They could increase the expenses of the government, thereby making it impossible for the government to pay off the debt. Or they could do both.

They went for door number three. They subverted the conservative policy of paying off the national debt by enacting a tax policy that did nothing for a big chunk of Americans (those who have to pay payroll taxes no matter how poor they are but are too poor to have to pay income tax), afforded mere pittances to most other Americans, and bestowed windfalls upon the select few.

That took care of the revenue problem: The specter of budget surpluses was eliminated, and we got instead budget deficits as far as the eye can see. Right-wing agendum number one accomplished.

Then there was the outlay problem. How could the right-wingers increase the government's outlays enough to ensure that the horror of governmental solvency would not raise its ugly head?

The answer came in the form of the Iraq war. Assume that the government actually believed that Iraq possessed weapons of mass destruction. That requires ignoring the evidence adduced by the people on the ground -- the people who were actually in a position to know -- but assume it anyway.

The fact remains that going to war in Iraq was not a rational response to the terrorist attack of 11 September 2001. There was no serious suggestion that Iraq had been responsible for that attack. Everyone knew what countries were responsible -- to the extent that a country can be responsible for the actions of a non-national entity -- for that attack: Afghanistan and Saudi Arabia. Eventually, we went to war in Afghanistan; the powers that actually control the right-wing pseudo-movement would not permit us to go to war in Saudi Arabia, even though that is where the primary responsibility lies.

"3000 Americans dead? Oh, please. We're talking about things that matter: profits."

So the right-wingers got it both ways: The US's revenues went down, and its outlays went up. For the right-wingers, that was perfect.

Again, there was and is nothing conservative about this. There is nothing conservative about a policy that says "We're already in debt, and it's getting worse, but let's spend a totally unforeseeable amount of money on an unnecessary war that we can fight for no particular purpose and with no idea what the objective even is, let alone how we might achieve it."

But it was never intended to be conservative. It was and is intended to dupe Americans into accepting policy choices which they would overwhelmingly reject if the options were presented to them honestly.

The principal objective of right-wing policies is to deceive Americans into believing that they cannot have a modern, forward-thinking, service-providing government without going bankrupt. It is a lie.

So the question is: Why do conservatives put up with this?

A small minority of Americans favors radical right-wing policies. That minority, lavishly funded by powerful monied interests which have no concern whatsoever for the wellbeing of Americans, has stolen the name "conservative" while pushing for policies that are not conservative at all. That minority is hell-bent on bankrupting the US, and the fate of ordinary Americans -- unemployment, foreclosures, etc. -- is of concern only insofar as it is useful: The poorer average Americans become, the better off the powers that are actually running the pseudo-conservative "movement" become.

Most conservative Americans do not want what the right-wingers want. Most conservative Americans want the US to be working its way out of debt, not digging itself deeper into debt.

Is there a conservative here who disagrees? Is there a conservative here who thinks that the right-wing policy of increasing budget deficits is somehow better than the conservative policy of reducing budget deficits?

Most conservative Americans want the US to continue to have a Social Security system. Sure, they -- like most Americans of any political persuasion -- worry about its long-term solvency, but to most of them (as to most Americans generally), throwing the whole thing overboard is not a sensible option. Most conservatives want the US to provide basic and critical medical care to those who cannot afford it. Again, there are solvency issues; but again, most conservatives do not see throwing the baby out with the bathwater as a good idea.

And on and on and on.

So the essential question is straightforward enough:

Why do you conservatives in the Republican party allow your party to be taken over by right-wingers whose goals are radically contrary to conservative principles? And when are you going to stand up and do something about it?

(Edited, with thanks to dgs49, to correct a typo.)

The radical right took over under Reagan and opposed all of the Clinton policies which eliminated deficits and grew the economy.

Under the 4 republican congresses in his last 4 years they expanded SPENDING while the first two budgets under democratic congresses held spending flat.

yrs,
rubato

data from CBO

year ……… discretionary spending (billions)

1994 …… 541.4 first Clinton budget
1995 …… 544.9
1996 …… 532.7
1997 …… 547.2 end Clinton 1st term, total = 7.8 Billion. 1.95B/yr increase (democratic/ republican congress)
1998 …… 552.1
1999 …… 572.0
2000 …… 614.8
2001 …… 649.3 last Clinton 2nd term, total = 102.1 Billion, 25.53B/yr increase (all republican congress)
2002 …… 734.4
2003*…… 825.7 < 1st 2 years of Bush II = 176.4 Billion, 88.2 B/yr (all republican congress)
2004 ……. 895.5
2005 ……. 968.5
2006 …… 1016.0 < 1st 5 years of Bush II = 366.7 Billion, 73.34 B/yr (all republican congress)

*(does not include cost of Bush’s lying Iraq war which was covered with a supplemental spending bills!)


Clinton in his first term with Democratic control for 2 of the 4 budget years spent LESS than during the era of pure Republican control. Even Bush I, with a Democratic congress, spent less than they did.

So, Andrubato, the theory is that Conservatives wanted out-of-control spending so we would have a huge deficit.

Yeah. That's believable.

And of course, we see the whole Bush Lied-people died canard. Ignoring the fact tha such conservative stalwarts as HRC, John Kerry, and Terrible Ted Kennedy were saying pretty much the same thing Bush43 was saying. But HE's the one who was lying.

When you find yourself in a "whole," stop digging. I'd better make a note of that.

Thanks for pointing out my typo, dgs49; I've fixed it.

But where did you get this:

dgs49 wrote:And of course, we see the whole Bush Lied-people died canard. Ignoring the fact tha such conservative stalwarts as HRC, John Kerry, and Terrible Ted Kennedy were saying pretty much the same thing Bush43 was saying. But HE's the one who was lying.

I wrote:

Assume that the government actually believed that Iraq possessed weapons of mass destruction.

Is there something unclear about that?

If Bush believed that Iraq possessed weapons of mass destruction, then he self-evidently was not, strictly speaking, lying. (I say "strictly speaking," because most people recognize as a version of lying asserting the truth of something which one has no basis for believing to be true.)

As for this:

... the theory is that Conservatives wanted out-of-control spending so we would have a huge deficit.

Do you have some other explanation?

Do you have any explanation at all for the central fact which you conspicuously do not deny?

Why did the Republican party cast aside a conservative policy that was working? Why did the Republicans throw overboard a policy that had brought us to the point of budget surplus rather than budget deficit and enabled us to work on paying off our national debt? Why did they decide that America should go back to digging itself deeper and deeper into debt?

Why?

dgs49 wrote:So, Andrubato, the theory is that Conservatives wanted out-of-control spending so we would have a huge deficit.

Yeah. That's believable.
... "

It is a fact that Republican presidents were responsible for all of the highest deficits in the prior 40 years until the recent Republican-engineered collapse required a bailout.

They lie about favoring thrift and stupid people believe it.

Deficit as a % of GDP from the Congressional Budget Office:
http://www.cbo.gov/budget/data/historical.pdf

Nixon/
Ford .…1975 … 3.4
Ford ....1976 … 4.2

Reagan 1982 … 4.0
……….1983 … 6.0
……….1984 … 4.8
……….1985 … 5.1
……….1986 … 5.0
……….1987 … 3.2
……….1988 … 3.1

Bush I 1990 … 3.9
………. 1991 … 4.5
………. 1992 … 4.7
………. 1993 … 3.9

Bush II ..2003 … 3.4
………...2004 … 3.5





yrs,
rubato

Andrew, I apologize for my snarky post. I appreciate you taking the time to articulate your own thoughts on these matters, rather than just posting something you read someplace else.

As we all know, it is of questionable value to take hundreds of necessarily-compromised legislative decisions from a period spanning a couple of years and try to discern an overriding pattern that proves a certain motivation.

From the conservative side, I would only point out two generic rationales that have been mentioned over the years. First, there was the hope that a "starve the beast" strategy in the face of surpluses might discourage Democrats from initiating explosive spending initiatives such as happened when they initiated the "War on Poverty," when they overspent the increased revenues generated by the Reagan tax cuts of the 1980's, and when they sought to spend the "peace dividend" resulting from the breakup of the USSR (sometimes referred to as the end of the Cold War).

Second, it is a perpetual "conservative" belief that lower tax rates will stimulate growth that will offset the theoretical reduction in revenues resulting from the reduced rates. This phenomenon is most obvious when considering reductions in the capital gains tax rates (which encourage investors to sell appreciated assets to take advantage of the lower rates), but also is the hoped-for result when marginal tax rates are reduced. In fairness, it does not appear that reducing the top rates from, say, the high 30's to the mid 30's can have stimulative the effect that reducing them from the 70's down to the 30's did during the 80's (recognizing that the TOP earners never paid more than 50%, due to an overriding provision in the Code).

Exacerbating the dubious tax initiatives were two eminently questionable military fiasco's in which we remain engaged, to one extent and another. Bush43 started them; a Democrat congress funded them. Both sides are to blame.

Still, the foundation of the Great Recession was not the relatively manageable deficits of the Bush43 years, but rather the unregulated creation of phony real estate "wealth," the resulting false prosperity, and the painful aftermath of both.

Living on the Right side of the street, I do not agree that somehow "right wingers" have forced "conservatives" to take on a radical agenda, or anything of the sort. The same phenomenon could be pointed out on the Left side of the political spectrum. Indeed, reading speeches of JFK, he sounds like a conservative Republican, and his views would have no place in the Big Tent of today's democrat party, which has been thoroughly coopted by government employee unions (mainly teachers), gender feminists, environmental extremists ("BANANA"), gay activists, poverty pimps, and those who dream of the day when we adopt European-style socialism. How utterly fitting that the Democrat President is a former "Community Organizer," who has never held responsible employment in the private sector - and the same could be said of most of his cabinet.

until the recent Republican-engineered collapse required a bailout.

bwahahahaha monent of the day? Oh it was engineered alright. 'cept no republican came within a mile of it.

quaddriver wrote:'cept no republican came within a mile of it.

Which is a way of expressing the core problem. If the Republicans hadn't let their "just get government out of the way and let the market deal with it" ideology blind them to what was going on, the catastrophe probably could have been averted.

There were, of course, many causes of the mortgage meltdown which led to the financial disaster. But when it comes to making public policy, one must focus on the causes which public policy could have done something about.

There is no doubt that the mortgage meltdown was driven in part by people's desire to get what they could not afford. But public policy cannot do anything about that. It doesn't matter what one's politics are; there is no public policy alternative which can make people not greedy.

But there were public policy alternatives that could have prevented a mess from becoming a crisis. And those were the public policy alternatives which were directly contrary to the non-conservative ideology which currently holds sway in the Republican party.

The crisis could have been averted by a combination of better regulation and better enforcement of existing regulation. But thanks to anti-regulatory right-wing extremism, the only people left guarding the henhouse were the foxes.

The genesis of the whole thing was mortgage-backed securities. Mortgages got bundled and rebundled, packaged and repackaged, to the point where even the people buying and selling the mortgage-backed securities did not understand what it was that they were buying and selling. The whole thing escalated wildly out of control, and the end result was that it all came crashing down.

Effective regulation could have prevented that. But we had the right wing's deadly combination: An antipathy toward enacting new regulations to deal with new circumstances and an executive branch stacked with purported regulators who understood their function to be refraining from enforcing the regulations which they were in charge of enforcing.

This was the apotheosis of right-wingism. Those whose goal all along was a breakdown in the system got to point to the existence of an abundance of regulations and claim -- diverting attention from the fact that, because of them, the regulations were not enforced -- that the proper response is to "free" those operating in the relevant market from "burdensome" regulation.

So, yes, one can say that "no republican came within a mile of it". And that is like saying that the train crash was not the switchman's fault:

After all, when the switch should have been thrown, the switchman wasn't within a mile of it.

Let's try to live in the real world.

Tax cuts REDUCE revenue. They do not raise revenue. And even the Republican economists all agree on this:


http://capitalgainsandgames.com/blog/br ... Between%29

Republican Tax Nonsense
17 Jul 2010
Posted by Bruce Bartlett

Bruce Bartlett's picture

On July 13, Senate Minority Leader Mitch McConnell, R-Kentucky, asserted that there was no net revenue loss from any of the Bush tax cuts, in defense of an earlier comment by Senator John Kyl, R-Arizona, that all spending increases must be offset so as not to increase the deficit but tax cuts must never be offset. Said McConnell:

“There's no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.”


Bush administration economists, however, never made any such claim. Following are a few of their statements regarding the revenue feedback of the Bush tax cuts.

Andrew Samwick, chief economist at the Council of Economic Advisers during George W. Bush’s first term, in a January 3, 2007 blog post:

“You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one. If I'm wrong, show me the evidence ... and tell me why the tax cuts were so small given their effects on revenues.”


Alan Viard, senior economist at Council of Economic Advisers during Bush’s first term, as quoted in the Washington Post on October 17, 2006:

“Federal revenue is lower today than it would have been without the tax cuts. There’s really no dispute among economists about that.”


Robert Carroll, deputy assistant secretary for tax analysis at the U.S. Treasury Department during Bush’s second term, as quoted in the Washington Post on October 17, 2006:

“As a matter of principle, we do not think tax cuts pay for themselves.”


Edward Lazear, chairman of the Council of Economic Advisers in Bush’s second term, in testimony before the Senate Budget Committee, September 28, 2006 (p. 11):

“Will the tax cuts pay for themselves? As a general rule, we do not think tax cuts pay for themselves. Certainly, the data presented above do not support this claim. Tax revenues in 2006 appear to have recovered to the level seen at this point in previous business cycles, but this does not make up for the lost revenue during 2003, 2004, and 2005. The tax cuts were a positive step and have contributed to the enhanced economic growth, additional jobs, higher real disposable income, and the low unemployment rates that we currently see today.”


At his Senate Finance Committee confirmation hearing on June 27, 2006, Bush’s nominee to be Secretary of the Treasury, Henry Paulson, was asked if he thought that tax cuts paid for themselves. He replied (p. 18):

“As a general rule, I do not believe that tax cuts pay for themselves.”


In a 2006 article published in the Journal of Public Economics, economist Greg Mankiw, who chaired the Council of Economic Advisers during Bush’s first term, estimated the long-run revenue feedback from a cut in capital taxes at 32.4 percent and 14.7 percent for a cut in labor taxes.

A 2006 analysis of extending the 2001 and 2003 Bush tax cuts by the Republican-leaning Heritage Foundation estimated that only 30 percent of the gross revenue loss would be recouped through behavioral effects and macroeconomic stimulus.

A 2005 Congressional Budget Office study during the time that Republican Doug Holtz-Eakin was CBO director concluded that a 10 percent cut in federal income tax rates would recoup at most 28 percent of the static revenue loss over 10 years. And this estimate assumes that taxpayers have unlimited foresight and know that taxes will be raised after 10 years to stabilize the debt/GDP ratio. Without foresight and no compensating tax increases or spending cuts, leading to an increase in the debt, feedback would be negative; i.e., causing the revenue loss to be larger than the static revenue loss.

The 2003 Economic Report of the President during Bush’s first term stated (pp. 57-58):

“Although the economy grows in response to tax reductions (because of higher consumption in the short run and improved incentives in the long run), it is unlikely to grow so much that lost tax revenue is completely recovered by the higher level of economic activity.”


The actual data show pretty convincingly that the Bush tax cuts reduced revenue rather significantly.

Federal Revenues During the George W. Bush Administration
Fiscal Year

Revenues/GDP

( see link for chart.)

yrs,
rubato

Tax cuts REDUCE revenue. They do not raise revenue.

Fu#$ giving them more revenue. Let them spend less first then we'll look at giving them more. My salary was my salary, I did not spend more than I took in (revenue) as a matter of fact I spent/spend quite a bit less than what I take in. I do not borrow unless I get a 0% deal (like on my wifes car) or it's for my house which I can/could afford and could pay off tomorrow if I owed a bunch of interest. But after 25 years in here I owe mostly principal.
If only the gov (all levels) could live within their means. Giving them more money is like leaving the liquor store unlocked with me just outside.

So how do you propose that we should get out of debt?

And why, in your opinion, did we abandon a policy that was getting us out of debt?

Spend less.
When the boneheads come and say "hey, we trimmed 100billion fromt eh budget, it's like me not buying a cup of coffee. They need a serious reality check. Throwing more money at the problem certainly is not the solution. They get more money, they probably end up still spending more than they get. Get real, get frugal.

ETA
We all know there are billions/trillions of dollars of waste (cow farts and such). Find it and cut it out.

"Spend less" is not a proposal.

What programs would you cut, and how much would you cut them by?

People in positions of responsibility have to answer real questions like that. They have to make real, specific decisions. They can't just say "spend less"; they have to get the job done in the real world.

Anyway, why did the Republican party abandon a policy that was getting us out of debt and decide to get us deeper into debt instead? Any ideas about that?

"Spend less" is a proposal, actually.

But it takes a group of politicians who are willing to risk their political lives (indeed, sacrifice their political lives) to tell the American people that we are no longer going to have a "kid in a candy store" spending philosophy. We are only going to dish out what we have the money to pay for.

And as I have said scores of times in this forum, the starting point is the Tenth Amendment to the Constitution. Wind down every department and every program that expands beyond the clear provisions of Article I, Section 8. As for vital programs that people have come to rely on, make them pay-as-you-go. Whatever revenues come in, goes out in benefits - and not a penny more. Means-test it if necessary.

The idea that the federal deficit would have continued to cook along in approximate balance if not for the Bush tax cuts is utterly fatuous.

The Bush tax cuts did not "pay for themselves." So what? Economists are great at the shoulda/woulda/coulda game, but it's all speculation anyway. Every economic initiative in recent history has had one school of economists supporting it and another school - just as well qualified and knowledgeable - saying it's stupid. Then when the dust settles, the Monday Morning Quarterbacks all say the Administration should have listened to the other school.

The real estate blowup was caused by the entire federal government taking on a policy that HOME OWNERSHIP IS GOOD! No one disputed it, but when reduced to practice it turned out to be stupid and collossally counter-productive. Banks were "encouraged" to approve loans that they wouldn't have even considered 10 years earlier, and the fucking Federal Government agreed to buy the worthless paper. The rest is history.

The real estate bubble concealed a tremendous downturn in our economy (manufacturing losses offset by residential construction gains), and only delayed a long-overdue recession. Had the bubble not carried us through the 2000-2008 period tax revenues would have collapsed a decade earlier than they did, and we would have seen much greater deficits during the Bush43 years - in spite of the tax cuts.

What is absurd is to think that BushCo and the Republicans increased discretionary spending by $319B by 2005 and borrowed a further $290B for tax cuts (sum = $609billion) but they are not responsible for changing a $236 billion dollar surplus to a $318Billion dollar deficit. (difference = $554 billion )


year total discretionary outlays, billions Annual spending increases
2000 ………. 614.8 ………. ……….
2001 ………. 649.3 ………. ………. 34.5 (includes Bush's $50B tax rebate)
2002 ………. 734.3 ………. ………. 85
2003 ………. 825.4 ………. ………. 91.1
2004 ………. 895.5 ………. ………. 70.1
2005 ………. 968.5 ………. ………. 73

So if BushCo had done nothing a $236billion surplus would have shrunk to a $181 billion surplus.

http://www.cbo.gov/budget/data/historical.pdf

http://66.102.7.104/search?q=cache:2rHz ... n&ie=UTF-8

http://www.ctj.org/pdf/gwbdata.pdf


All the red ink was Republican spending for tax cuts and republican spending for consumptive uses.



yrs,
rubato

The numbers tell the story.

Its about inputs and outputs. We don't just have to wave our handsies and say 'we just don't know we just don't know'.


We do know. Republicans increase spending and then lie about it to a gullible electorate who are too lazy to check facts and too partisan to admit them when they are shown the truth.

yrs,
rubato

dgs49 wrote:"...

The real estate blowup was caused by the entire federal government taking on a policy that HOME OWNERSHIP IS GOOD! No one disputed it, but when reduced to practice it turned out to be stupid and collossally counter-productive. Banks were "encouraged" to approve loans that they wouldn't have even considered 10 years earlier, and the fucking Federal Government agreed to buy the worthless paper. The rest is history.

... "

Fannie and Freddy bought a tiny fraction of the sub-prime loans. Mostly they were bought by financial institutions driven by an influx of investment capital from the 'emerging' world and unleashed by a lack of regulation. (republicans are still blocking any effective regulation of the same type of institutions which failed).

The 'fanny and freddy did it' meme has been disproven many times over. If you care to know the truth you can look it up.

yrs,
rubato

FACT: The Feds demanded that mortgage lenders lower their standards and modify their historical lending practices to lend money to those who were not creditworthy. Even Credit Unions were threatened with sanctions if they didn't increase their mortgage loans to people (and for property) they would not normally consider. They created the climate in which it became possible for banks to issue horrible loans, then sell the paper at a profit, thus resulting in an ocean of bad paper. The FACT that Freddie and Fannie did not buy ALL THE BAD PAPER does not change who was to blame for the bubble.

The Feds did not demand that lenders offer adjustable rate mortgages (which provided for very low payments upfront which would then balloon and become unaffordable). The Feds did not demand that lenders offer mortgages of 106% of purchase price (which allowed buyers to pay for the cost of the house PLUS closing costs without having to put down a dime). THOSE were the sorts of mortgages that got people into trouble, NOT the feds taking lenders to task for refusing to lend to buyers who were more than qualified to carry the mortgages they were seeking, just because they happened to live in certain neighbourhoods. Nor did the Feds order lenders to repackage those risky mortgages as mortgage-backed securities in the mistaken belief that spreading the risk around would somehow mitigate its impact. That was something the private sector concocted all on its own.

No lender was induced by the feds to make bad mortgage loans, they did that all on their own out of pure greed. They simply didn't care if the borrowers defaulted because they believed they would be able to recoup their investment so long as property values continued to rise.

Trying to blame what happened in 2008-2009 on government policies enacted in the 1970s is getting pretty old.