There are several important issues on the domestic and foreign fronts this summer. Domestically, the big issues are the jobs and economy, BP oil spill, immigration, financial reform, and the debt. International issues topping the list are Israel, Iraq, and Afghanistan.
Jobs and economy is number one because it is effected by all the other issues that follow. However, independently there are too many people that are long-term unemployed and we have no issue with discussing cutting or letting expire unemployment benefits and other programs that assist these people in surviving. These jobs have been lost after other issues created problems. The first stimulus did create or save some jobs. We, however, need to do more to support small businesses which create most of the jobs.
The downturn began bcasue of the burst of the housing bubble which was fueled by many government and non-government actions. The overarching action that created the environment for all that followed was the encouragement for all to own a home which accelerated under George W Bush's Ownership Society platform. This created the environment for the Federal Reserve to keep the interest rates too low for two long. The historically low interest and other pressures preceded creation of various designer loan products and lending to borrowers that it should have been clear if an actual income analysis had been complete would not have qualified for the loan. It should not have surprised anyone that under these conditions many people would default on their mortgages and that eventually this condition could potentially leak into the prime mortgages. It is impossible to approve a No Doc or NINJA mortgage and not expect that there would be a default when income, assets, and liabilities were not examined in the approval process or underwriting were ignored.
