Letters to the Editor
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The Root Cause
"That last point to underline is that the hands-off-Wall Street, deregulatory impulses unleashed by Ronald Reagan and expanded by all his White House successors have directly contributed to the precarious state of today's average American."
While they may have contributed, they aren't the root cause. These are predictable symptoms of a broader disease.
The root cause of these problems, far surpassing "weakened oversight" and "deregulatory impulses", is the Federal Reserve system, its monetary policies and the distortions created by our fractional reserve banking system.
If you or I were asked to lend to an individual who wished to buy a house 40 miles from Los Angles, who would not tell us his income, or disclose his history of employment, and who provided an appraisal for the property so overstated as to be absurd, what would we do? We would rather keep the money safe in our wallets than lend for a meager 5 - 8 % return on our investment, especially considering the skyrocketing costs of everything around us. The risk would not be worth it, nor would the value of any dollars returned to us net out to create an increase in our purchasing power: real returns. These rates are far too low for the risk we would take and too low to compensate us for the increase in prices we see everyday.
It wasn't the lack of regulation over greed of savers like you or I that created this problem. It was our monetary system: the Federal Reserve system created the dollars for this borrowing to happen in the first place.
They did so by setting rates so low that it drove up the demand to borrow money. It allowed the purchaser to bid ever higher for property, with price levels increasing each time the Fed lowered rates. This is the root cause of the problem, and the proper treatment for this disease is to eradicate this unconstitutional institution called the Federal Reserve. It is an unaccountable entity within government given the power to create money out of thin air.
This money is not only used for subprime lending. The Federal Reserve allows government to fund our wars without asking the taxpayers to pay the cost of war, it allows election of politicians on false entitlement promises, and it grants the government the power to borrow and spend in amounts so large as to bankrupt our children and continually devalue the purchasing power of our savings through inflation. If the government had to tax us for its expenditures each year the public would never have allowed a $1 trillion dollar war to continue. We simply can't afford it.
Until we accept the diagnosis we will always be suffering from and attempting to treat symptoms brought on by this Federal Reserve system. Responsible adults should work to eradicate this problem before it becomes a hereditary disease enslaving generation after generation of our children to both their government and to foreign lenders.