The Great Bailout is mostly over for the banks. But for those troubled behemoths of the nation's housing bust, Fannie Mae and Freddie Mac, the lifeline from Washington just keeps getting longer.
Sentiment: NEGATIVE
The bailout of Fannie Mae is completely off the books. It's going to cost us hundreds of billions of dollars. Yet nobody is placing this in any type of column in accounting for federal debt.
If anything, the bailouts actually hindered lending, as banks became more like house pets that grow fat and lazy on two guaranteed meals a day than wild animals that have to go out into the jungle and hunt for opportunities in order to eat.
I won't dispute that bankers' privileged treatment in the 2008 crash merits populist scorn. But unfortunately, without a bank bailout, there probably would have been a worldwide depression.
We have the idea of saying that put limitations on bailouts, so that the bailouts don't occur in the future, so that we don't have to do the - look to see AIG situations or Bear Stearns situations or the Fannie Mae or Freddie Mac, which is probably going to be more money spent on those two institutions than the Congress spent on the TARP program.
The banks are not lending, at least from what I see. They were so wild and reckless back in the good times that they got burned terribly.
When the banks grow to or when these financial institutions grow to such a size that they can't sustain themselves, or what have you, they have problems, economic problems, or financial problems, they shouldn't be able to look back to you and I, the taxpayer, to be bailed out.
There is nothing left now for us but to get ever deeper and deeper into debt to the banking system in order to provide the increasing amounts of money the nation requires for its expansion and growth.
We need to think deeply about whether we can sustain banks that are not only too big to fail, but potentially too big to bail.
The people of Kentucky have had enough. They have had enough of bailouts for Wall Street banks.
As long as the big banks are allowed to remain big, their political leverage over Washington will remain big. And as long as their political leverage remains big, the taxpayer and economic tab for the next mess they create will be big.
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