Re-Inflating the Bubble
We all know from progressive and Democratic writers the the Community Reinvestment Act and other efforts to offer cheap home loans to people without good credit had nothing to do with the mortgage industry offering too many loans to people without good credit.
So we should not be in the least bit worried that the Obama Administration is calling for more mortgages to be given to people with weaker credit, while sub-prime auto loans are simply booming. Because we have learned from Iceland and Greece and Cyprus that the best way to deal with a debt crisis is by encouraging consumers to take on more debt, and the best way to respond to an asset bubble is to try to re inflate the bubble.
All of this, of course, is simply crazy talk. The people who are involved HAVE to know this won't end well, because the most recent example of this leading to disaster is only 4 years old. Hell, the people doing this were in office when this same approach fell apart last time. But politicians refuse to face some pain now to avoid huge pain in the future - for politicians, the discount rate on pain is infinite.
