The economic collapse of the US and world financial markets lays at the feet of the entanglement of the housing and financial sectors.  The triggering cause of the current financial crisis in the United States was the decline in housing prices that began in the summer of 2006.  That decline was the bursting of the housing bubble, supply finally exceeded demand (economic principle).

This decline in housing prices caused a large increase in foreclosures because many people owned houses with mortgages almost equal to the initial value of the houses (loosened lending criteria). When the values of those houses fell and went below the amount of the mortgages, lenders often foreclosed on borrowers.  Rather than pay their debt, some people simply walked away.  This began the ripple effect of failure that resulted in collapse.

Because so many financial institutions owned securities based on these mortgages– so-called mortgage-backed securities (MBS), the large decline in value of these MBS’s led to large losses for these institutions. And because so many of the owners were financial firms that held only a tiny percent of the value of their assets in reserve, even a small percentage decline could, and did, destroy almost the whole value, and sometimes the whole value, of the financial firms that held these securities.  AIG and many other entities bought or invested in securities that were "bundled" by FreddieFannie.  FreddieFannie could have been regulated in 2005 but it was blocked.  FreddieFannie was the entity that bundled the "toxic" loans into securities and sold them to the financial industry.  Franklin Raines was at the head of one of these and resigned after it was found out that he cooked the books to hide the loses.

Virtually all commentators on parts of the political spectrum agree with these facts as stated. Where they part company, though, is on why this happened and on what should be done about it.

The best evidence is that the problem was triggered by previous government regulation (loosening of lending criteria in the 90’s) combined with an unrealistic belief on the part of many people that housing prices could only go up. It is important to understand the cause because, if we do not, we are unlikely to choose good solutions. Indeed, the US federal government has, for over a year, chosen one bad solution after another (bailouts, handouts). 

Bailouts are a bad choice if you understand that free markets can correct themselves.  I believe the bailouts were a bad choice, except for backing the government (taxpayer) insured loans.  Otherwise I do not believe we should spend any money beyond humanitarian support to families until they can get back on their feet. 

Hence the name "George towns" is not an apt…call it Rainesville…

These tent cities have been cropping up over the last year or so and are America’s dirty little secret and a legacy of the Bush years. This didn’t just happen with the bubble bursting in September either.

I find it disturbing but very telling that the first post on this thread would be someone making a joke about it. I believe the wowOwow demographic has changed dramatically in the last couple of months. And the "Editor" should be ashamed to post the following:

"Editor’s Note:  Have fun with the naming on both sides of the issue, but remember, play nice with each other in the community. wOw values all responsibly posed points of view.  And we love funny ones!!"

"PLAY" nice with each other over naming TENT CITIES at the expense of the misery of our fellow Americans?? Just WHO is running this website these days? I am appalled. SHAME ON YOU wowOwow.