The problem that we are in today is a result (my opinion) of the adjustable rate mortgage (ARM). Alan Greenspan back in 2004 made the comment that people should look into adjustable rate mortgages because they would save money. He basically was encouraging people to take on risky loans.
He was trying to fuel the fire. Adjustable rate mortgages make it much easier for people to buy homes that they cannot afford. The economy definitely benefits from people buying more real estate due to the advantage of the ARM.
Now look at our problem. Today we learn that we had negative job growth in the economy for the past month. In Greenspan's latest quote he states today that our environment looks a lot like 1987 when the stock market crashed.
These comments are very irresponsible on his part.
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