Third was excessive government spending of deficit funds either drawn from the treasury in the form of debt issued beyond the level justified by a shrinking economy or as currency which just printed with no accountability whatsoever. Excessive generation of debt was necessitated by the huge cost of the War on Terror. The practice of printing too much currency was undertaken deliberately in an effort to push down the value of the dollar.
Initially this was a way of attracting foreign investment in the United States to stimulate the economy, but ultimately it was also used as a hidden form of taxation, putting money in the coffers of government by reducing the value of money held by everyone else from common citizens to foreign nations investing in dollars and dollar based securities.
To give credit where due it was a very clever policy. It had little direct negative impact on lower income consumers while effectively taxing foreign entities and multinationals who would normally be beyond the reach of the IRS. The problem is that these economic tricks produced short-term stimulative effects, but these were offset by the long term effect of deflating the real value of American assets. In short, pretty soon everything cost more but was worth less, creating an environment in which any general economic decline would be aggravated.
So when the natural economic contraction hit an inflated and volatile credit market based on assets which had a shrinking real value caused by manipulation of the money supply and deficit spending, you had what some have called an economic "perfect storm" and everything fell apart.
In retrospect the crisis would have been easy to avert. Government regulators should have stepped in and told mortgage investment companies and banks they had to limit the amount they could borrow against mortgages — maybe to a level of 3 to 1. If they had done just that, even the inevitable foreclosures on bad mortgages would have been survivable. If they'd gone farther and dealt with the bad mortgages and irresponsible lending practices with some sensible regulation, so much the better. In addition, the Bush administration could have made the decision early on in this process — possibly requiring some prescience — that it would be better to let the 2002 recession happen and bottom out so that they could have a nice recovery and a healthy economy by 2007.