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The government played a significant role in causing the Great Recession through its policies that encouraged risky lending practices. The push for increased homeownership, particularly through agencies like Fannie Mae and Freddie Mac, led to the proliferation of subprime mortgages. Additionally, the lack of regulatory oversight over financial institutions allowed for excessive risk-taking and the creation of complex financial products. This combination of factors contributed to the housing bubble and subsequent collapse, triggering the recession.

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