[citation][nom]SubprimeFanboy[/nom]Thank goodness we loaned them 20 billion a few months back so that they could survive *intense sarcasm*This is like the sub-prime crisis, Bush had successfully wrecked the economy by 2005, so the banks were so kind as to agree to extend huge credit lines to people who couldn't possibly pay it back, in exchange for being bailed out later. Had the banks not done this, we would've had a Soviet-style collapse well before the end of Bush's 2nd term, however, all of our "career politicians" will do anything to stay in power one more day, even if it leaves us much worse off when that day does come...[/citation]
You have no clue what you're talking about. The "melt-down" of our economy can be traced back to two primary sources, relaxed lending standards implemented by Fannie Mae and Freddie Mac at the behest of democrats AND republicans and the blind-eye towards commodity trading that has existed for decades.
It starts with attempts to achieve the great American dream of owning a home. Democrats, and to a lesser extent Republicans, during the late 90's began pushing Fannie Mae and Freddie Mac to begin relaxing standards on their mortgage "auto-buy" program. In essence, if a bank lent money for a home and that loan matched Fannie and Freddie's "auto-buy" standards then they would automatically buy the loan up, no matter the conditions. Fannie and Freddie would then take these bought up loans, package them together as a mortgage backed security and sell them on the open market. When those bad loans began to default these securities quickly became near worthless. Without people buying their securities, Fannie and Freddie were no longer able to buy loans from community banks. Unable to sell their loans to Fannie and Freddie, banks began to tighten up on home loans given out which dried up an important part of their revenue stream, closing costs and origination fees. With tighter credit people were no longer able to buy new and existing homes for sale which led to an oversaturation of homes on the market. Law of supply and demand states that with an increased supply and lower demand, prices must fall, thus home prices began to tank. Lower home prices meant people had negative equity which dried up many peoples line of credit on their homes. With lower lines of credit and unable to sell their homes more people began to default and the circle continues. As this scare perpetuated through the economy more and more people began to not spend (which is the last thing you should do during a recession, unless you are jobless which is understandable.) Less spending hurts every company out there thus the trickle down effect throughout our economy.
The other issue being the lack of regulation on commodities market. This one is self-explanatory. Nobody should be able to corner the oil futures market and drive up the price, not when it is a neccessity of life. This loophole has existed for decades and needs to be closed.
This, along with the lower spending capacity as mentioned above, is what has put GM in the place it's at. They planned poorly with poor fuel economy vehicles so soaring gas prices killed them and then on top of that people stopped spending money in general. Very little of this had to do with Bush and his administration and I'd challenge you to point out what in his 8 years influenced the outcome we're at.
PS I'm not a Bush fan, but I'm tired of people jumping on an obvious "popular" bandwagon.