As we talked about recently, it was NOT the tax cuts and NOT the interest rate cuts that put us into this mess.
It was the fact that Congress increased our national debt by massive amounts which lowered the value of the dollar by about 40%. It was the fact that the fed kept rates low for too long. It was the fact that Congress (and the WH) throughout the 1990's and Bush era continued to loosen credit practices and "encourage" lending to those not qualified all for the sake of "having more people owning their own homes".
But most importantly, it was borrowers taking on more and more debt to the point they could no longer afford the payments should interest rates go up. Some of these individuals did it right out of the gate by buying more home than they could afford. Others kept borrowing against home equity under the idiotic assumption that real estate values would always go up. The lenders are equally culpable in the fact that they loaned them the money.
Wall street is also partially responsible in their facilitation of packaging the loans into investment vehicles such as CDOs and SIVs.
There is plenty of blame to go around. Greenspan had a hand in it to be sure. But so did a lot of other people. Trying to blame it on one person or one administration is ridiculous.
