The government, in this case, is an enabler. Sure, the banks could have made bad loans up to a point and then stopped. But they didn't stop. The reason that they didn't stop is that they assumed that they were going to be able to keep cheaply borrowing money. But then they couldn't borrow anymore.

The government isn't directly involved in that anymore than a bloke giving a pound to a alcoholic beggar is guilty of that beggar going to get drunk. But the government is an enabler in this scenario. By turning a blind eye, they helped create the circumstances that let the bubble inflate to the proportions that it did before it burst.

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There is no more degenerate kind of state than that in which the richest are supposed to be the best.
Cicero, The Republic
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