The Role of Government and The Foreclosure Crisis
As we all know, there are two competing views on the proper role of government. On the one hand, we have those who believe that it is the government's responsibility to redistribute as much income as possible upward to the richest people in the country. On the other hand, there are those who believe that government should promote a strong economy that serves the vast majority of the population.
Adherents of the former group in both political parties have been firmly in control of government in recent decades. This comes out very clearly in the treatment of the foreclosure crisis.
The basic story of the foreclosure crisis is that banks made trillions of dollars of bad mortgage loans that were used to buy or refinance houses at bubble-inflated prices. With the collapse of the housing bubble, more than a fifth of all mortgages are underwater. As a result, many homeowners are struggling to pay mortgages on houses in which they have no equity and have no real prospect of ever getting equity.








