The goevrnment did have a house ownership[ programme and did want wider home owner ship. But that doesn't mean the government drove the whole thing against the wishes of the banks.

The banks wanted to issue more of their own unregulated paper currency. Expand the money base, inceasse leverage, and it is a liscence ot print money. Literally. For this they needed a source of debtors. The sub-prime was a PART, only a part of that bank requested and rewiored flow of debtors.

It is those who are ideologically committed to defending the working of the Free Market as perfect and infalable who always argue that it must have been the goegvrnemtn distorting the otherwise wise functioning of the market.

You won't win against fundamentalists but you certainly can have fun.

Enjoy!

I've been arguing on another web site with some Americans about the current financial shitstorm and I've come up with this idea…

The banks lobbied congress to allow them greater freedom to loan money to people who previously weren't allowed to get a mortgage.
All these sub prime mortgages weren't a liberal government idea, the government were swayed by the banks that this was an achievable idea and the banks did this because they viewed this untapped market as a way to create even greater profits.
The banks would of made the case that house prices historically have always risen and if a few people defaulted on their repayments, all the other loans would be paid and would cover the losses.

Do you think that It was really the government forcing banks to loan to the poor or the banks actually wanted to do this themselves?