It’s painful to watch Congress give hundreds of billions of dollars in a bailout package to Wall Street firms who made risky investments. But it could be necessary to ensure that the nation’s financial sector and, eventually, the economy don’t come to a grinding halt. That situation would have even more dire effects: touching student loans, credit cards, real estate prices, investments and even individual state government’s ability to fund themselves. The sub prime mortgage issue has been brewing for years now, and finally, thanks to a culmination of factors, it’s coming to a head and sending severe shocks through the global economy.

One of the biggest fundamental measures of the credit crisis is the falling value of homes. In the United States, we subscribe to an ownership society and that’s a good thing, because ownership signifies financial success and stability. With ownership of a home comes ownership in a community, an invested stake in the well-being of society around your property. It’s an ideal that has served us well for decades and it’s not an ideal that we should move away from following this credit crisis.

But with this ideal, we’ve built a glut of houses that led to supply outstripping demand and driving down the price of houses on the most basic level. The market is readjusting leading to a devaluation of home prices and the contraction of the home construction industry. It’s not pretty, but it is a natural corrective measure that comes with a market-based economy.

What happened to the demand over the past few decades? An era of cheap credit and new regulations from the government requiring banks and mortgage companies to loosen mortgage requirements and give loans to people who would not have qualified normally led to a rising demand that would not have otherwise been in the market.

The Community Reinvestment Act was a well-intentioned regulation to loosen loan requirements, but in the end it just put an unfair burden on people who ended up living outside their means and suffering from foreclosures and high interest rates. Fannie Mae and Freddie Mac made these risky loans and sold them to other investment banks as mortgage backed securities. When banks began to foreclose on these homes, investors were in trouble because falling values of houses made it less likely they’d recuperate the full value of the investment and made these securities toxic.

Now are these the sole reasons for the mess we’re in? Most definitely not, but it’s a basic look at where we are. Government regulation forcing credit firms to issue credit when they otherwise wouldn’t, and a societal acceptance of living outside one’s means. Its not George Bush’s fault, its not John McCain’s fault and even though Sen. Barack Obama took $112,000 in campaign donations from Freddie Mac and Fannie Mae employees since 2005, it’s probably not his fault either.

We as a nation lived off cheap credit and lived outside our means for decades and now, as unfair as it is to those who played by the rules, the only option Congress gave the nation was a bailout plan costing hundreds of billions of dollars. It’s a painful lesson to learn but hopefully its a mistake our nation won’t make again. This bailout is going to be costly, but in order for the credit markets to thrive and in turn keep the economy in afloat — it may turn out to be a necessary evil to keep the nation running.

E-mail Benton your thoughts about the credit market to [email protected].