Ron Paul: Government Intervention Created Sub-Prime Mortgage Crisis

Sound Money is the Answer

December 7, 2007 -- ARLINGTON, VIRGINIA – Of all the candidates currently running for president, only Ron Paul has a legislative record, spanning four decades, of opposing the monetary policy that led to the current sub-prime mortgage crisis.

Dr. Paul made the following statement about the current housing market crisis:

“The root of this crisis, as with past financial and economic crises, results from federal government intervention into the economy, not to anything endemic to the market, nor to the actions of market participants.

“The collapse of the housing market has served as a catalyst for the economy's latest bust. Various federal mortgage programs through the FHA, Fannie Mae, and Freddie Mac have distorted the normal workings of the housing market.
“The Federal Reserve's loose monetary policy and lowering of interest rates were a major spur to the housing boom. Low interest rates influence marginal buyers, those who are sitting on the fence, and encourage them to take on a mortgage that they otherwise would not.

“It is time for the federal government to get out of the housing business.”

Dr. Paul has long been a proponent of rejecting central planning by the Federal Reserve and government bureaucrats. He instead advocates returning to a policy of sound money that encourages fiscal responsibility.

“Ron Paul has long predicted this type of crisis would result from federal interventions into the housing market and excessively low interest rates,” said Ron Paul 2008 campaign chairman Kent Snyder. “Only Dr. Paul has the background and expertise to explain why we must reject further political intervention into the housing market, such as that advocated by Hillary Clinton.”

Source: Ron Paul campaign