By MARTHA RANDOLPH CARR

In life there is a tipping point for everything where what had seemed impossible has inched its way forward against the odds and is now about to pick up a lot of speed. Unfortunately, a great example of that right now happens to be the underpinnings of the U.S. economy. We appeared in the past to have enough checks and balances that things could get bad but not come undone to the point that the safeguards stopped working. It's what allowed us the freedom to spend time arguing over the choice between big government or allowing the free market system to correct on its own. That last one is another way of saying let things unfold as they will, it can't get but so bad and along the way all of the scams will get peeled away. And, it is the idea that will inevitably come into play if the imbalance, the tipping point becomes too weighted on either side. In other words, when tinkering no longer works for whatever reasons a government has to either go to martial law or for a little while into an economic freefall till we hit the natural resting point. We appear to be sliding ever more quickly into that latter category. However, and this is really ironic, it's the illusion of that idea that helped get us here in the first place.

The recent approach that was taken toward the housing market was supposed to be an easement of so much regulation but was more look the other way than step back. That helps to explain why the older policies from the New Deal, a time of big intervention, were also kept in place. The intention wasn't really to create a healthy free market system but to allow certain groups to take advantage of a situation. Therefore, no one was really analyzing what the effect would inevitably be toward having the federal government backing up mortgages for low-income families through the institutions Fannie Mae and Freddie Mac and giving people with no money the opportunity to buy more than they could ever hope to pay back. You see, we appeared to be choosing a free market system but we were practicing a rigged system.

Fannie Mae and Freddie Mac were born out of an era when we were trying to fix the last time we got into this mess, the Great Depression after people were allowed to speculate in the stock market without having the money to back up their purchases. Once enough people decided to sell and expected to get paid with real money the illusion evaporated. There was never any money.

This time big government decided to remove regulations about lending practices and it became possible for people to get adjustable rate mortgages with balloon payments without having to show that the reality was they were pitifully undercapitalized. Step two of our predicament happened the moment a shrewd employee of an investment firm noticed it was possible to take the sub-prime mortgages, or bad loans and sell them to everyone else. This was the equivalent of a gold rush but as usual, fool's gold. The third step came about when the ratings systems used by brokers, Moody's, Fitch and Standard and Poor's started helping the investment firms who were getting the ratings with some advice. The illusion was that there was a wall that separated the two sides but it's now coming out that, well, that wasn't true. Step four occurred when the end-user, the guy-on-the-street started investing in mutual funds that were heavily invested in sub-prime mortgages. It tied all of us together in one giant knot so that when the entire thing unraveled it would hit us all.

One of the biggest moments that signaled things have definitely changed is when the Federal Reserve even in the shadow of inflation gave in and lowered the prime lending rate just a smidge yet again and Wall Street ignored the entire event.

It appears that investors of every size see the problem as bigger than any single event and therefore have concluded that no single fix is going to get us out of it. Perhaps if oil was not already pushing us to a financial breaking point with a lot of new realities we would already be looking at the worst of it but the truth is we don't actually know what the bottom is just yet. And, by the time we do, just like after the Great Depression, a lot of our cultural landscape may look very different.

Martha Randolph Carr's column is distributed exclusively by Cagle Cartoons Inc. newspaper syndicate. Her latest book, "A Place to Call Home," about the re-emergence of U.S. orphanages, is available wherever books are sold. martha@caglecartoons.com