With the financial market’s $700 billion bailout proposal for troubled subprime mortgage lenders, everyone is quick to point their fingers and assign blame.
Some say it’s the fault of Wall Street executives, some say it’s irresponsible homeowners accepting loans they knew they couldn’t pay back — and while both deserve some credit, it is our government who put us in this mess in the first place.
Don’t forget that the Federal Reserve Board created the housing bubble by artificially lowering interest rates, easing up the flow of credit and enticing banks and lenders to seek more borrowers. It was this illusion of favorable market conditions that lead people to take out loans and buy houses. But we can’t expect an artificially inflated housing market to thrive forever, and now the bubble’s popped.
A crisis like this was inevitable. Government has embraced deficit spending, and as a result, the value of our dollar has been steadily decreasing and inflation is rampant. Our monetary policy has been fundamentally flawed for a long time, and it’s no surprise the bottom is falling out.
The Federal Reserve needs to let the free market work, stop inflating the money supply and end efforts to artificially stimulate the economy.
It’s time to quit blaming Wall Street and start blaming Washington. Bailouts will only delay the inevitable. This crisis can only truly be solved through balanced budgets, a sound currency, small government and the free market.
Arthur Manoli
microbiology and premedical junior
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