Quote:
Originally Posted by The Demon
Actually, there were many causes for the problem and none of them had to do with Bush's and Reagan's deregulation.
1. Going off the Gold Standard in 1971
2. The American consumers starting to spend more than they could afford.
3. Credit expansion(ok, some bank fuckups lol)
4. Trade Surplus turning into a trade deficit
5. Budget deficit increasing
6. National Debt increasing
7. Debasing of the US Dollar
8. Clinton's removal of bank loan caps.
The only issue would be the credit crisis which while big, is nothing compared to the subprime mortgage and the monetary and fiscal mismanagement I've outlined. If we had a true free market based on the Austrian School of economics, I believe we would have never had these issues.
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So repealing Glass-Steagall and enabling the derivatives market and Credit Default Swaps along with raising the leverage limit from 10X to 40X had nothing to do with it? Whatever... lol. What I just said is actually the consensus among almost every economist in the country and elsewhere. Goldman Sachs alone sold a bill of goods to AIG to the tune of $22 Billion (Credit Default Swaps)...
btw... the logic behind switching from the gold standard was that a commodity like gold can be devalued in the world while labor (production) could not and that is why the currency is based on output now rather than gold.