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By passing the Affordable Care Act, wasn’t Bill Clinton and his party instrumental in causing the housing bubble which led to the Great Recession?
You might want to edit the question to refer to the Housing and Community Development Act of 1992 (not the Affordable Care Act). I assume you meant to ask about that, so this answer is written accordingly.
I can’t tell if the wikipedia page is correct and complete, but it’s enough to demonstrate that the crisis was much more complicated than the question suggests:
I’ll highlight just a few points about why Clinton’s policies’ impact is not so obvious:
- there was a housing bubble in Europe also, even though it’s not subject to US housing regulations
- the HUD policies gave Fannie and Freddie a mandate to fund “affordable home” loans, but did NOT do anything to private lenders. Fannie and Freddie owned only $2.7t out of $10.7t of those loans, so the “Clinton’s fault” theory doesn’t explain e.g. Lehman getting in trouble
- there was a commercial real estate bubble at the same time also, even though housing policy doesn’t apply to commercial real estate
- the Financial Crisis Inquiry Commission investigation put the biggest share of blame on a lack of effective regulation on lending practices, not housing policy (but that’s a very rough summary, and 1 of the 10 commissioners dissented over that point)
An analogy: when thousands of homes burn down in a forest fire, is it because of [insert one: cigarette/campfire/lightning strike/etc]? Or is it because of inadequate brush clearing?
In this analogy, the pressure from HUD policies that started under Clinton might have been the smoldering campfire that got it started (though that’s debatable—there was a “safety and soundness” clause that Fannie and Freddie used when they wanted to, for instance). But the private lenders’ participation shows that the non-regulation was the uncleared brush. As soon as somebody noticed a way to offload risk from bad loans without getting caught, the same resulting credit collapse was basically inevitable. The next lightning strike would have done it instead. It just needed someone to have the clever idea of selling default swaps, and it eventually falls over even without the affordable housing mandate.
A caveat: I’m not qualified to weigh in on this, but neither are any of the politicians or news commentators who usually bring it up, so I thought I might as well say something.
Unless some future Nobel-prize-winning Economics paper finds a solid model for this, you probably shouldn’t assume anybody who’s talking about it (or their sources) understands it well enough to have a real explanation. Anybody who tries to call it Clinton’s fault is definitely doing politics, not economic analysis.