The problem was not necessarily the home loans themselves, but that these high-risk loans were classified as extremely low-risk by credit rating agencies. The

The problem was not necessarily the home loans themselves, but that these high-risk loans were classified as extremely low-risk by credit rating agencies. The government did not make these classifications, nor did the government force exuberant optimism on financial institutions. The current situation may have been avoided by saner lending guidelines, but it could also have been avoided by better government oversight of the shell games being played by the investment banks. It's blatantly false to claim that the only problem here was federal economic policy, and that the only solution would have been less governmental involvement.