Washington debates U.S. credit crisis

WASHINGTON -- Politicians and consultants are debating what, if anything, Washington should do to keep the U.S. credit crisis from further damaging the U.S. economy.

But given the complexity of the problem and the U.S. capital's political power division, it's not clear if the debate will produce much more than some regulatory tweaks, The Christian Science Monitor said.

Nevertheless, the debate is on.

"The subprime (mortgage) crisis demonstrates the serious negative economic and social consequences that result from too little regulation," House Financial Services Committee Chairman Rep. Barney Frank, D-Mass., wrote in an Aug. 20 Financial Times op-ed piece.

Frank and other Democrats argue unregulated mortgage companies, which have increased their share of the business, are responsible for many of the imprudent loans that spurred the crisis, the Democrats argue.

But many Republicans oppose actions they see as interference in the operation of financial markets, the Monitor said.

And in recent days, Bush administration officials have argued the overall economy remains strong and now is not a time to panic.

"We are going to work through this problem just fine," U.S. Treasury Secretary Henry Paulson said in an Aug. 22 broadcast interview.

Copyright 2007 by United Press International.