What caused the economic crisis?

Well, I've been watching The Suze Orman Show, and she attributes the economic crisis to the housing and credit loans. I'm sure it has to do with many other things as well. My personal opinion is that cost of living has gone up, debt has sky-rocketed, people are no longer spending money just to keep up with their basic necessities. This means company's profits plummet, resulting in higher prices of products just to keep business running. In short: credit loans - massive spending - debt - people spend less to reduce debt - companies produce lower profits - companies raise their prices. Again, this may just be one of MANY reasons for this crisis.

People taking out loans that they can't pay back. If all those morons who took out huge loans to buy a house had made their payments on time we wouldn't have all these foreclosures and the banks wouldn't be losing money forcing them to go bankrupt.

The repeal of the Glass Steagall Act.

Well 5 responses so far and not one obligitory "Bush policies of the last 8 years yadda yadda" so far anyway. It's a hugely complex answer as there are so many factors piled on top of each other. Lets start with the creation of the federal reserve, after which and when Wilson realized what had occured he was quoted as saying : i} "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." [/i] Lets now fast forward (admitedly skipping a few things) to the totaly removal of the gold standard, and instead to a system of debt and paper money worth only as much as the promise behind it. Lets now look to the repeal of Glass stiegle, the incredibly artificialy inflated housing prices, the incredibly low value of mortgages as a result, the corruption that ran amok in our federal monetary system, the total blatent negligence of a number of administrations and congresses, failure to properly utilize our domestic resources and government in expensive workings that they have no constitutional business in in the first place resulting in obcsene spending. Lets now look at a market that reacted with plunge after plunge after banking fall after banking fall, then top it off with a good sitcky gooy topping of more government action in the comletely wrong manner and here ya go. It all comes down to the falure to adhere to 3 basic principals. unconstirutional control over a monetary system, failure of reposnability and prudent behavior and a money system based on fake money. We were warned a very long time ago about all of this..... "If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered." ~ Thomas Jefferson