I recognize that the point being made is that the marketplace was skewed by easy bank lending, and that many private people spent more than they had, confident that things would just go up and up and up. That came to a halt when the housing bubble burst. But to say that -- and to say nothing more -- is to place the blame solely on banks and consumers within a (relatively) free market system. Those bad boys! They tried to live beyond their means! But that's all over with now!!
The point is that the damage done by government in "fixing" the mess is completely glossed over. Trillion dollar deficits? [shrug] I don't see an issue with that -- it's not like anyone is living beyond their means. We stopped all that, didn't we????
The trillion dollar+ deficits are a result of the great recession of 2008. As revenue dwindled as jobs were lost (millions less jobs now versus 2007) there was no belt tightening of the welfare benefits. Just the contrary, for example, requirements to qualify for food stamps were reduced and unemployment was extended to 99 weeks.
You are correct in that government is not subject to laws of private sector where corporations must adjust to conditions.