We recently wrote that the economy was juiced by the housing market , because the housing market was left to operate with little on no regulation on purpose to stimulate the econony. Why would the Bush Administration juice the economy?

The reason the Bush wanted to stimulate the economy was to cover up the impact of the cost of the Iraq War. The Bush administration juiced the economy with loose with mortgage lending to keep the economy strong during the Iraq War. The Iraq War has cost the taxpayers of the United States more than $650,000 billion. Congressman John Yarmouth stated that the economy was linked to the cost of war. It’s not logical to believe that the United States can wage a war and spend in excess of $650,000 billion and it would not have a negative impact on the economy.

This will be the first war that the United States whas fought and the citizens did not have to suffer. That doesn’t make sense. While the war was being and fought and paid for, the economy seemed to be strong. Citizens were seeing increasing home values. For many households, the increasing net worth resulted in increased credit card spending. Over all, things seemed to be pretty good. Until . . . . it all came crashing down, because the economy was strung out on the steroids of loose mortgage lending practices.

The economy was juiced with the loose mortgage lending practices with little or no regulatory oversight, because this kept the economy strong during war time. It’s totally ridiculous to wage a war and lower taxes at the same time. Something had to be done to strengthen the economy during the war. The solution was to let the housing market boil over with loose lending practices. Of course, the Bush administration did not expect that the economy would hit bottom and not be able to go any lower.

Just as a drug addict must hit bottom before they will admit they are not in control of their drug use and seek help, the Bush administration has hit bottom with the economy and now has admitted that they need help. The $700 billion bailout is the help and add this to the $650,000 spent on the Iraq War and this is the true cost of the war.

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The U.S. economy was purposely juiced by the administration to maintain a robust economy. When sports figures use steroids to boost their performance the common term is they are on ‘juice’ meaning steriods. Well, the U.S. economy has been on juice. The loose housing mortgage market juiced the U.S. econony.

Why would the current administration juice the U.S. economy. Certainly the only answer is that it was a tactic to maintain a strong economy. A rising housing market was thought to increase wealth and increase consumer spending. For several years, the finance and economy pundits on CNN, MSBN, and the major networks have said that the housing market has kept the economy from sinking. It’s clear that the housing market was let run wild with no mortgage lending regulation to stimulate the economy. Folks, what other logical reason is there?

It must have been a deliberate tactic to let the mortgage lending market run loose and wild with no meaningful oversight and regulatory actions. It hasn’t been very long since the U.S. experienced the last real estate meltdown due to loose mortgage lending practices. Anyone that is 50+ will remember the 1980’s real estate crisis when foreclosures hit unheard of highs. During the 1980’s the savings and loan industry made questionable loans to thousands of home buyers that were not qualified financially. The 1980’s real estate crisis was not that long ago and it just is not possible that the regulators, managers, bureaucrats and financial industry experts were not aware.

There had to be a conscious decision to let the mortgage lending market run free and wild. Keep in mind that billions in profits were made. Many investment firms, mortgage companies, home builders, title companies, lawyers and others made billions in profits. Consider another perspective. Why were interest only loans created and allowed in the last decade? Who can remember the radio and TV financial advisors recommending that buyers use interest only mortgages “if they were only going to own the house for one to two years”. All of the speculators planning to flip houses knew that “own the house for one to two years” was a euphemism for “flip the house”.

And then consider all of the special mortgages offers for no application fee, no closing fees, no PMI, etc. These are all red flags that the mortgage industry has been operating with no oversight. The important point though is that it wasn’t on accident, no folks, the purpose was to juice the economy by inflating housing prices and convincing Americans to over consume with the end goal to artificially inflate the economy.

My friends, you have a right to be outraged! You should be outraged! The situation that our country is in today was not an accident that couldn’t have been avoided. Are we so naive that we will believe that?

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