The Crisis Theory Of The United States Mortgage Crisis Essay

1318 Words Nov 27th, 2016 6 Pages
The mortgage crisis had always left many Americans unhappy and confused. They had felt cheated by the banks, whom they blamed for their decline in house values. They had also felt scared, as the entire financial sector was much too large and complicated for them to fully understand, and they had families to worry about. Like the average American, many scholars and economists today still are not completely sure about how the crisis occurred. There are many varying theories, some pointing at causes from decades ago, and others blaming national debt. I have gathered the most effective data possible within a broad scope of theories to try and fully understand all of the possible causes to the United States Mortgage Crisis.
The theory that dates to the earliest issues is the banking failure theory. Our system of banking has always varied here in the States, but there is a particular way that our banking and financial institutions are established and run in our country as of recent years. Ever since Ronald Reagan’s presidency, our banking policy has been lighter governmental oversight. The lack of regulation led to some issues in the financial sector. As James Crotty explains, “After 1980, accelerated deregulation accompanied by rapid financial innovation stimulated powerful financial booms that always ended in crises. Governments responded with bailouts that allowed new expansions to begin. These in turn ended in crises, which triggered new bailouts. Over time, financial…

Related Documents