Relationship between inequality and financial crisis The most recent global crisis has rejuvenated interest in the relationship between inequality, credit booms and financial calamities. Many analysts argue that rising levels of inequality led to a credit boom and ultimately a financial crisis. Others, however, have distanced themselves from this notion by arguing that while inequality can be blamed on many things, the global crisis may not be one of them. In drawing a personal position regarding the above situation I will have to evaluate the different ideologies that most economic scholars have applied in drawing their conclusions on whether or not cases of inequality in the world population, especially in the United States, have contributed to the recent economic crisis. Some economists such as Borio and Eugene White deny that financial or income inequality has anything to do with financial crises. They say there is very little evidence linking credit booms and financial crises to rising inequality. They also argue that periods of low and stable expected inflation, combined with strong economic growth and liberalized finance, can give rise to complacency among borrowers, lenders and regulators, as was the case in to massive accumulations of credit and finally to the financial crisis of 1920 and 2008. (Borio and White page 150). Professor Raghuram G. Rajan of the University of Chicago Booth School of Business is one of the renowned economic analysts who believe that the levels of inequality have everything to do with both the financial crises of 1920 and 2008. According to him, the rising levels of inequality over the past three decades have led to increased political pressure for redistribution that ultimately landed in the middle of the paper, in the specific case of the US Financial Crisis, although it is doubtful whether the argument can be applied universally to other countries and crises. Therefore, to safeguard our country from another financial crisis, we must not ignore signs of growing inequality as happened in 2008. The government must work to control debt levels through its regulator. The best approach would be to try to lower your debt levels with a method commonly called the orderly debt reduction technique. They can start by changing mortgage rules and procedures to prevent excessive lending to uncreditworthy consumers. While this could be seen as a form of external interference in a self-regulating industry, it must be allowed to happen as it is incumbent upon it to bail out private banks using taxpayers' money.