The New Deal and Housing Bust of 2008

Let’s evaluate this claim: “The New Deal was a wise series of government actions that healed the problems afflicting the economy.”  First of all, we know that most of the time the government gets involved in something, it becomes worse.  The claim could then be this, “The New Deal was a wise series of government action that made the problem afflicting the economy worse.”  We are closer to the actual truth with this new claim.

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There are more things the government did not actually do.  It did get involved in the Great Depression, but it made things worse for the people.  The New Deal was supposed to help the people, but it did not.  The war after the Great Depression did.  In fact, before the government was involved in the Great Depression, the economy was actually becoming better.  Then, BAM! the government trips them and stops them.

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Graph-house-prices-1975-2006

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   Was the market economy the reason the housing bust of 2008 occurred?  No, it was not.  However, you probably guessed it already — government involvement.  These two people Fannie Mae, and Freddie Mac, wanted to make it so that people could buy houses at an affordable price.  They also used the government to “help” them.  Yeah…great.  I know that when we have the government involved…we pretty much get the opposite of what we want.  This is what happened.  The prices went skyrocketing.  People lost houses, and others could not purchase a house.  Good job, government.  – _ –

~Perrissa

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