$124.6 Billion Tax payer bailout of financial institutions payed from 1986-1996, ridiculous.

From Wikipedia’s article on “savings and loan crisis,” here:

…While not part of the Savings and Loan Crisis, many other banks failed. Between 1980 and 1994 more than 1,600 banks insured by the Federal Deposit Insurance Corporation (FDIC) were closed or received FDIC financial assistance. [13]

During the Savings and Loan Crisis, from 1986 to 1995, the number of US federally insured savings and loans in the United States declined from 3,234 to 1,645. [14] This was primarily, but not exclusively, due to unsound real estate lending.[15]

The market share of S&Ls for single family mortgage loans went from 53% in 1975 to 30% in 1990.[16]

U.S. General Accounting Office estimated cost of the crisis to around USD $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government from 1986 to 1996.

(/h2>[17] That figure does not include thrift insurance funds used before 1986 or after 1996. It also does not include state run thrift insurance funds or state bailouts.

The concomitant slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990-1991 economic recession. Between 1986 and 1991, the number of new homes constructed dropped from 1.8 to 1 million, the lowest rate since World War II. [18]

A taxpayer funded government bailout related to mortgages during the Savings and Loan crisis may have created a moral hazard and acted as encouragement to lenders to make similar higher risk loans during the 2007 subprime mortgage financial crisis. [19]

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2 Responses

  1. […] Taxpayers will pay billions for years to come to help the Federal Reserve bailout two large mortgage companies. Posted on September 6, 2008 by westtnliving The following is an excerpt from a Yahoo article (read the whole article, click here) concerning a US Federal government decision that will cost tax payers billions of dollars over the next few years, not unlike the government authorized financial institution “bailout” that cost American Taxpayers $124.6 billion in Taxpayer … […]

  2. Should The US government bail out American corporations?

    Does corporate America share its profits with the tax payers? The answer is absolutely not.
    Do they share the profits with their employees? The executives are paid millions.
    The US Government should bail out all corporations large and small is that right? The answer is no. If it is a viable business, they can raise the money from investors, if not, let them close shop.
    If the government decides to bail them out if should be at a cost (like shares in the company) where the government will make money and have a say in running the company. Even better have a public referendum where the voters decide.
    Carmakers want money from the government; the financial institutions want money – where does it stop?
    It is about time corporate America should learn they have to stand on their own feet. Where is corporate America financial responsibility?
    They claim the government is abusing its financial responsibility; it seems Corporate America is no better. They also go to their workers to take a pay cut, is that fair? It seems the little guys are the ones that always pay the price for corporate financial abuse and miss-management.
    Other corporations in the world are not asking to be bailed out – they go out of business.
    Jay Draiman
    PS
    The corporate barracudas have no conscience they will step on anyone, stab anyone in the back and fudge the numbers to climb up the corporate ladder and receive the hefty bonuses.
    As family values have declined in the last half a century so has corporate integrity and honesty, it seems that corporate America will do almost anything for the buck ($) no holes barred.
    What a shame that corporate America has sunk so low.
    The government is no different, honesty and integrity is a foreign language, they only serve the special interest groups. (We all know why).
    What happened to the American people who placed their trust in the government? (The public officials they voted for).
    We are faced constantly with another corporate or governmental scandal of wrongdoing. When is the American public going to wake up and demand an honest government and honest corporate America? Americans wake up before it is too late.
    Jay Draiman

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