Housing crisis linked to foreign oil dependency.

• Position: YOUR LIFE

Despite a fiscal stimulus package approaching one trillion dollars, a nearly maxed-out monetary stimulus courtesy of the Federal Reserve, and various other stimulus programs such as real estate tax credits and Cash for Clunkers, the U.S. economy remains anemic and now is threatening to "double dip" into recession. The origin of the nation's money troubles has been attributed to everything from lax regulation to corporate greed but, according to Lewis Reynolds, author of America the Prisoner'. The Implications of Foreign Oil Addiction and a Realistic Plan to End It, the truth hits a lithe closer to home.

"Many variables contributed to the housing crisis and the subsequent decline of the economy, but perhaps the single most important factor has been largely overlooked: America's overwhelming dependence on foreign oil created massive unnatural cash flows that warped the economy. With over two-thirds of our oil coming from overseas, there were very large sums, upwards of $500,000,000,000 a year, flowing from the hands of U.S. consumers into those of overseas oil suppliers--mostly foreign governments. The story really gets interesting when you begin to look at what foreign oil exporters did with the money."

From 2003-08, for every dollar Americans spent on foreign oil, more than 44 cents can be traced directly to the purchase of U.S. assets by foreigners. Nearly half of that amount was used to purchase the bonds of Fannie Mae, Freddie Mac, and the U.S. Treasury. "These sums represent about 20% of the total increase...