This crisis could have possibly been averted if the government had done something about the mortgage crisis a couple of years ago to cut it off at the pass so to speak.  We could have created a $1trillion trust fund to ensure people would be able to negotiate payments they could afford on these mortgages.  Instead, the greed prevailed and people holding the notes thought they were better off waiting and seeing if these things would fail.  When the risk is spread throughout the system, you've got nobody with any incentive to renegotiate anything.  What happens is a precipitous decline in real estate values due to foreclosures.  If the government had taken a more aggressive stance on the foreclosures, much of real estate decline could have been averted and we wouldn't be saddled with all of this bad debt. 

by schmoab on 09/19/2008 03:37:31 PM EST