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Which party is more responsible for the state economy?

Which party is more responsible for the state of the economy?

  • The Republican Party

    Votes: 33 63.5%
  • The Democratic Party

    Votes: 19 36.5%

  • Total voters
    52
The evidence is just not there to support your opinion:

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US Inflation by Decade Chart

"In the fall of 2008, the U.S. economy stood on the brink of collapse. Part of the reason is that the financial system, particularly the commercial and investment banks, had been deregulated starting in 1980 and culminating in 1999. In 1999, the Glass-Steagall Act was repealed. The Glass-Steagall Act separated the powers of commercial and investment banking, which insured that banks would not take too much risk with depositors' money."

"After the repeal of Glass-Steagall, greed won out over prudence and banks did indeed take too much risk with their depositors' money. Between 1999 and 2008, Wall Street became less like the fabled financial district and more like the Las Vegas Strip. Even the regulation that still existed didn't seem to be working."

"The housing market, before the Great Recession, was moving full steam ahead and borrowers who couldn't really afford large home mortgages borrowed money anyway for mortgages. Big banks put these mortgages together into packages of securities of derivatives, called credit default swaps, which became the toxic assets that we would later hear so much about. The derivatives market is not regulated so banks could slice and dice these home mortgages into packages of derivatives just about any way they wanted.

Enter Senator Phil Gramm once again. In 2000, Senator Gramm put a provision in legislation that was passed, the Commodity Futures Modernization Act, exempting credit default swaps from regulation.

A perfect storm ensued with a phenomenon called sub-prime mortgages. Even those people who really didn't qualify for large mortgages started being approved for those mortgages. Countrywide Mortgage and its founder, Angelo Mozilo, was one of the biggest offenders. The traditional disclosure required of borrowers was not required and Countrywide was making mortgages to just about anyone who walked in the door. Dick Fuld, who was at the helm of Lehman Brothers when it failed, invested in huge amounts of subprime mortgages as did the government agencies, Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac were later bailed out because of this decision. Lehman Brothers was one of the largest failures of a financial firm in history."
How do we Prevent Another Financial Crisis?

I was talking about monetary inflation, not price inflation.

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Ceteris paribus.

Was everything else held equal?

Meh, doesn't seem to be our biggest problem as price inflation has been so low for years.
 
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