In 1985

A high tax bracket investor purchases a rent-house in a low tax bracket neighborhood. The 50% tax bracket investor pays twice-as-much. Appraisers pick-up-on the sale. Property values double in the neighborhood.

A zero tax bracket homeowner purchases the house next door. The homeowner pays the high price, but the tax deductions which are valuable to the 50% tax bracket investor and justify the high price are worthless to the zero tax bracket person.

The sellers of the properties, roll their equity over into nicer houses in the neighborhood down the street. They pay the higher price.

In 1987

After the change in Federal Income Tax Law property values plummeted. The investor abandoned the rent-house. The zero tax bracket person who purchased the $100,000 house with a $95,000 VA loan now has a $50,000 house but still owes $95,000.

Congressman Jake Pickle's office, in Austin, called the crisis being "up-side-down" and blamed the Saving and Loan Operators. Federal Reserve Chairman, Alan Greenspan, called it a "Consumer Asset Balance Sheet Problem" and did not place blame. Congress's own independent panel investigating the problem attributed 15% of the blame to Savings and Loan Operators, the other 85% of the blame was out of the scope of their inquiry.