<P> Economist Paul Krugman wrote in 2009: "The prosperity of a few years ago, such as it was--profits were terrific, wages not so much--depended on a huge bubble in housing, which replaced an earlier huge bubble in stocks . And since the housing bubble isn't coming back, the spending that sustained the economy in the pre-crisis years isn't coming back either ." Niall Ferguson stated that excluding the effect of home equity extraction, the U.S. economy grew at a 1% rate during the Bush years . Since GDP growth is a significant indicator of the success of economic policy, the government had a vested interest in not fully explaining the role of home equity extraction (borrowing) in driving the GDP measure pre-crisis . </P> <P> A taxpayer - funded government bailout of financial institutions during the savings and loan crisis may have created a moral hazard and acted as encouragement to lenders to make similar higher risk loans . </P>

What changed in 1999 with fannie mae lending policy