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The Bailout: By The Actual Numbers

While Democrats paint a glowing picture of the bailout, our Bailout Tracker database tells the whole story. A look at the biggest losses and gains stemming from the TARP and Fannie, Freddie bailout.

A Times Square news ticker reports that the House passed a government bailout of the financial sector on Oct. 3, 2008. Our database gives you an up-to-date snapshot of where that bailout stands. (Mario Tama/Getty Images)

Quick, how many billions in the red are taxpayers on the bailout of GM? AIG? Fannie and Freddie? Is it true that the government has reaped a profit from bailing out the banks?

It should be easy to find answers to such questions. But while it's a snap to find rosy administration claims about the bailout, finding hard numbers is much more difficult. That's why, since the bailouts began in 2008, we've maintained a frequently updated site to provide them. Now we've retooled our database to make it even easier to find these sorts of answers.

So you can effortlessly discover that it's $27 billion for GM, $23 billion for AIG, $91 billion for Fannie, $51 billion for Freddie, and yes, the bank investments have so far returned a profit of $19 billion.

We also make it easy for you to see which investments have resulted in losses (39 so far in total) and to sort bailout recipients by how far in the red or black they are. As always, our scorecard page adds it all up and shows where both bailouts — the Troubled Asset Relief Program, better known as TARP ($55 billion in the red) and Fannie and Freddie (negative $142 billion) — stand right now.

Ultimately, the bailout of GM seems likely to result in the TARP's single biggest loss. But since the government still holds about a third of the company's stock (currently worth about $10 billion), we don't include it on our list of losers yet. It's possible the government will sell the stock for more than it's currently worth, recouping more of its investment.

For now, the reigning bust is the $2.3 billion investment in the bank CIT, which landed in bankruptcy less than a year after its bailout. Second on the list is Chrysler, which resulted in a $1.3 billion loss.

"The government's financial stability programs are expected to cost far less than many had once feared during the crisis, and we're continuing to make significant progress recovering taxpayer investments," said a Treasury spokesman.

Over time, that list of losing investments is likely to grow far beyond 39, because many of the smaller banks that have yet to repay the government are struggling. Although more than 300 banks have exited TARP (often repaying with money from another government bank program), nearly 400 remain. Of those, 162 are behind on their dividend payments to the Treasury Department. According to the GAO, the banks that are languishing in TARP tend to be weaker than those that have left, and at least 130 appear on a secret "problem bank" list kept by regulators.

The TARP's main bank program was supposed to be reserved for healthy banks, but among the losing investments are banks that were troubled even when they first received the money. Central Pacific Financial, a Hawaii bank, got its $135 million in early 2009 despite regulators having just ordered it to raise additional capital. As we reported then, the approval came two weeks after staff for Sen. Daniel Inouye, D-Hawaii, who had helped establish the bank and owned a large amount of the bank's stock, inquired about the bank's application for funds. Both regulators and Treasury denied that the inquiry affected their decision. Taxpayers ultimately lost $61 million from the investment.

Also notable among the failed investments is South Financial Group. The bank received a $347 million government investment in 2008 about a month after its former CEO, Mack Whittle, retired with a $18 million golden parachute. Taxpayers ultimately lost $200 million while the CEO kept his package. Contacted by ProPublica, Whittle said, "I founded [South Financial Group] in 1986 and take offense that anyone would imply that retirement benefits were not warranted." He added that the benefits had been negotiated long before he announced his retirement in the summer of 2008 and that he'd retired by the time the bank applied for TARP funds.

Of course, the government has already turned a profit on its bank investments overall, because the biggest bailouts — particularly Citigroup and Bank of America (each received $45 billion) — resulted in large profits. None of the banks remaining in TARP have net outstanding amounts over one billion dollars.

The Treasury wants to get rid of those remaining bank investments as soon as it can — even when that means selling stakes in apparently healthy banks for a discount, as ProPublica's Jesse Eisinger reported last month.

What defines a profit? So far, the Treasury has allowed many banks to exit TARP after receiving most, but not all, of the amount owed. But in cases where the Treasury received enough other revenue (e.g. through dividend payments) from the bank to result in a net gain, we label that investment as a profit. So far, that's been the case for 26 banks.

The final cost of the TARP, the Fannie, or the Freddie bailout isn't possible to know.

For the TARP, it depends on the biggest remaining investments: AIG and the remains of the auto bailout, GM and GMAC (now called Ally Financial). The net outstanding amount of those three companies together is about $61 billion. At this point, it seems likely that Treasury will ultimately recoup its bailout of AIG. The auto companies, on the other hand, seem likely to result in a loss approaching $20 billion, according to both Treasury Department and Congressional Budget Office estimates.

Another big factor is the TARP's housing programs, its mortgage modification program chief among them. Although Treasury set aside more than $40 billion for its various initiatives, less than $5 billion has been spent so far, a testament to the limited reach of the programs. Since those are subsidies, none of that money will be repaid, and any spending ups TARP's tab. Earlier this year, the CBO estimated that ultimately $16 billion would be spent.

Of course, all of these numbers benefit from being put in a broader context. The Obama administration argues that the TARP should be credited with blunting the force of the financial crisis and saving "more than one million American jobs." Critics like former TARP inspector general Neil Barofsky say the program may have stemmed the damage from the crisis, but it did so by largely preserving the broken too-big-to-fail system that caused the crisis. It's also worth mentioning that the Federal Reserve played an enormous role in supporting the biggest banks and allowing them to exit TARP.

The fate of the Fannie and Freddie bailouts is even harder to figure, although the Treasury recently announced that all of the companies' profits from now on will be handed over to Uncle Sam each quarter. Their tabs should decrease, but how quickly and for how long they'll be allowed to exist is unclear.

For now, our site provides a snapshot of the two bailouts as they actually stand. We've been at it since 2008, and we'll continue to update it frequently.

Whether or not the bailouts saved jobs, I strongly suspect it put the banks in a position where their campaign of foreclosure fraud became feasible and it allowed the automakers to continue to make cars that people either don’t want to buy (Impala) or are priced way out of a normal person’s budget without delivering on value (Volt).

I would like to see more history on Freddie and Fannie, going back and building a timeline of investments and strategies, commencing maybe in the early 90’s.  We hear a lot of political posturing on cause and effect.  I would appreciate more objective candor on that history in a fashion or format demonstrated by this article and the charts.  I look forward to looking at the supporting data.

For the younger folks who may not remember the K car and the earlier Chrysler bail-out—what are differences then, and now in how the government intervened?  Is there a lesson to be learned?  I hope someone has that knowledge and insight to share with us.

It would be great to see how these figures match up against larger macro economic numbers, such as the size of the overall government budget, GDP, the cost of not doing the bailouts, etc. A billion dollars is a lot of money, but would public opinion be influenced on how to react to that expense if we also knew that was the amount per month we blew up in Iraq for what appears to be a mostly-failed government bailout? For that matter, how much would the economy have improved if we did not spend so much treasure trying to prop up two failed states or simply giveaway billions in tax cuts?

This analysis also lacks context regarding the decisions made by the banks to support or engage in efforts that would have resulted in better - or worse - losses. Mortgage modifications is a great example. In the post-AG settlement era, banks are starting to make more modifications and offer principal write-downs. Had they done that earlier, it is likely that the overall losses to the government would be much less and recovery could have started earlier. 

Overall, the actual cost and benefit of a public policy decision really comes down to how far you extend the analysis in terms of what you are quantifying as impact and how long you measure. If GM sustains its current position as #1 car maker and actually grows by an additional 100,000 or more jobs, will the salvage of the company be seen as a better deal? My guess is yes, but time will tell. Hindsight is 20/20. The future is always a bit more hazy.

Thanks as always for great reporting.

Peter Anderson

Sep. 6, 2012, 11:48 a.m.

I would question the metric you use, which accepts the Treasury Department’s statement of the issue.

  For Treasury and this article, TARP’s merits revolve around whether the net amounts refunded exceed the bailout.

  That is flat out dead wrong.

  For it ignores the full value of the bailouts paid at the peak of a systemic credit crunch. 

  Anyone can make money by leveraging if it is given a free insurance policy to cover the wager in the event such a contraction happens to fall while the bettor is overextended.

  But, such insurance (if hypothetically it could exist) is not free, but rather would be massively expensive—so steep its cost would exceed the benefits from high leverage.

  Ignoring this factor only gives strength to those who blithely ignore the disastrous aftershocks from the unparallelled moral hazard this has created.

  I do hope that you give serious coverage to this defining issue which will inevitable rebound to create an even worse Great Recesssion, if not full-bore Depression, 5, 6 or 7 years from now.

Re: Fannie and Freddie history, the book entitled Reckless Endangerment gives an in depth, well research look all the back to the beginnings of their nefarious activities.

Re: AIG, I am still perplexed about how this company seems to be still claiming its right to exist. I thought the agreement with the government was that in exchange for its bailout it would proceed with an orderly winddown to total closure. It has such a long history of criminal activity, with Credit Default Swaps (i.e. fake insurance) being so critical to the ability of Wall Street banks to maintain their own fake collateral, how can this company be allowed to continue?

BabyBoomerWriter

Sep. 6, 2012, 12:26 p.m.

Fear of what could happen convinced legislators they had to support the bail-outs. What was not part of their process was that financial rescues only prolong the end of companies and industries that are not keeping up with innovation or responding to consumer trends. The money spent could have been pumped into programs that improved education, incentivized those who started new businesses, offered much needed training programs for displaced workers and helped the suddenly unemployed by modifying their monthly mortgages for a period of years.

New ideas are like shoots of greenery on a burned out hill. They appear during tough times, when normal solutions aren’t working. Visionaries have a knack for recognizing opportunity. By propping up fading industries or poorly managed ones we might have done ourselves a great disservice. By pouring money into already weakened business models, we may have made it more difficult to nurture creative ideas and enjoy the benefit of the inevitable economic growth spurt.

Sgt, Barefoot

Sep. 6, 2012, 1:03 p.m.

These bailouts are only worthwhile if they are repaid like GM has been doing. The broadcast stimulus fails due to the high volume of foreign goods on the market.
  Obam’s own on the job training has cost Americans ontold fortunes. At least we have a pretty good idea that Romney, WILL pay the rent1

Maybe the next article could address what we are doing (or not doing) to insure that this catastrophe will not be repeated…

Re: The problems, TARP and criminal activity.  One of my biggest disaapointments with Obama is his/Holder’s decison not to prosecute alleged wrong doing by some of the country’s biggest banks during the problems a few years back.  But juxtapose that against any action that a Romney Administation might take.  Won’t happen, will never happen! Romney may indeed apologize to the banks for being given a hard time.

Some differentiation is needed between 2008 and post-2008 bailouts because of two different administrations. And let’s not forget the fact that more people can buy new cars when they’re employed, that’s a big reason why GM had a great 2011 i’m sure, which helps loans get paid back and stock prices to rise!

Just saw on MSNBC that job numbers in tomorrow’s report may add about 144K, and those applying for first time unemployment is down from previous month.  If I read this right, this is certainly a boast for Obama, plus the Dow went up over 244 points today to around 13.2.

Russ G—thank you for the book reference.

Tom O.  I read somewhere about the numbers of one/some report being jobbed the month before to make this month look better.

I concur with barefoot that the bailouts should be repaid in full.

The info you’ve collected is great. But can you go a step further and list who has interest in these organizations and what political contributions these organizations have made.  Now that truly would be in the public interest.

Fixing the problem.
Reinstate all Regulations that were in place after the Great Depression to protect this country and the people from this happening.
It started under Regan, then the Savings and Loan Fiasco, this bull is not new. Put the rules back in place.
SEC works on a comission basis, any fraud they get percentages,real incentive to find culprits..
Rules need to be put back and strenghtened.

The consistent thread to all of these stories?  They all result from leadership failures at the very top - from the greed and/or corruption of the 1%.

Which is why I come all too close to blowing a fuse every time I hear a member of that cult or one of their Republican pawns attribute blame for anything - and usually everything - upon the American worker.

The bailouts were necessary because of the incompetence of the managers.  If I had made the mistakes of the executives of AIG, GM and the others that had to be propped up, I would have been fired.  But then, I know that I would never have a backstop like the Fed.  The bailout mentality continues until the personnel are changed.

Are we so sure they were incompetant failures?

Quite a few small banks vanished as a result of the crisis, leading to less competition at a time when people have been thinking about leaving the big banks.  At a time when many industries are decentralizing (and many are operating without companies or money), the banks “screwed up” and seized a lot of one of the few fixed resources, real estate.  And the automakers have been able to survive while avoiding making fuel-efficient cars people clearly want/need.

Now, personally, I don’t like any theory where, if we just find the right people to knee in the groin, we’ll live in paradise.  However, I can excuse anybody who’d rather see a “shadowy cabal” conspiracy theory than incompetence, here.  After all, all these enormous companies were paid to further entrench the status quo at a time when it’s been unstable…

(Personally, I think there was conspiracy, but not that deep.  The banks realized that, if they held their breath until they turned blue, we’d cave to the tantrum.  End of story.  If you think about it, had the banks really collapsed, life would have marched on in a couple of weeks.)

Huh….a conspiracy I find far easier to believe is banks withholding working capital and small business loans in order to slow job creation while speculating in the oil markets to jack up the price of energy and drain away consumer demand with private taxes - thereby creating the kind of negative economic atmosphere that results in incumbents who actually want to enforce the law and hold banks accountable not being reelected.

See

http://articles.businessinsider.com/2011-11-02/markets/30349118_1_oil-companies-commodities-markets

a.k.a. The Untold Story of How Banks Took Over the Oil Market.

Hm.  Yeah, that’d work, too.  The only reason I might discount it (other than, again, the idea that we could solve the world’s problems by beating up a handful of key people) is that the mortgage operations seem so outright spiteful that it’s easier to envision crashing the job market for the sake of crashing the job market.

On the other hand, I’ve also heard that banks have started “rolling long” on food stores (never selling their positions) and pushing supertankers of oil around the oceans until the price goes up, so it could very well be a factor.

Carol Davidek-Waller

Sep. 7, 2012, 2:04 p.m.

This analysis doesn’t seem to include the tax payer insured low interest loans that companies like B of A and GM used to relieve their TARP burden and unlike TARP had no irritating restrictions on how the money was used.
I’d take another look at this picture and see if the profit isn’t a myth.

Carol Davidek-Waller

Sep. 7, 2012, 2:06 p.m.

B of A and GM among others received low cost taxpayer backed government loans that they used to relieve themselves of TARP debt. Unlike TARP they had no irritating restrictions like using the money to lobby Congress etc.
Take another look and see if these ‘profits’ aren’t illusory.

This makes no allowance for the actions of the Federal Reserve such as paying interest on reserves and keeping interest rates low.

These are indirect handouts to the banks, but are not booked as losses to the government.

And paying risk free interest to banks for excess reserves encourages the banks to avoid lending to risky businesses and individuals, which is an unusual policy to encourage in a recession.

And how do you add in the cost of creating a moral hazard in which you let bank employees know that they can pay themselves bonuses for good performance with financial alchemy turning Pb into Au, as they did with subprime mortgages, and the senior managers will be able to keep their personal gains when the government rides to the rescue later?

The bailout should account for the present value of the future cost of preserving/maintaining the bloated financial sector which some have estimated is 2 to 3 times the size needed for the USA economy to function well.

The bailout legislation was a rare opportunity to force real reform, but the politicians of both stripes deferred to the financial industry and their academic boosters.

Per Rahm Emmanual, “You never want a serious crisis to go to waste”, but in this case Obama, to the detriment of the country, did.

William Greene

Sep. 7, 2012, 4:35 p.m.

I am stunned!  Substantively intelligent journalism AND, for the most part, substantively intelligent posts in the same publication!  I must have made a wrong turn somewhere back….lose me baby, lose me.

I’m no expert, but the total outstanding debt and projected final ‘cost’ looks like a good tradeoff for keeping the US financial sector - and the world’s, for that matter - from the full-scale meltdown of the Great Depression.

Structural reform and regulatory oversight of the financial sector and oil markets - on a global scale - is needed, to be sure. Obama may have ‘missed the opportunity’ in 2009/10. But it’s a good bet he won’t whiff at a second chance.

The question is, will he get it? Or will Ibsteve2u’s conspiracy scenario (which I concur with) play out?

William Greene—I concur. This has been one of the most informative sessions I have read. It is nice to read the comments and come away wanting to learn more.

re: Mike 1950s, Sept. 6, 12:31 p.m.

I’m not a young person, but I well remember the K car and the Chrysler loan guarantees. That is exactly the difference between what happened then and TARP. Chrysler did NOT get bailouts or loans from the government, but purchased loan guarantee insurance from the government, for which they paid the government a hefty premium. They presented as collateral, a viable, profitable product (the K car), and an invaluable salesman (Lee Iacocca). This guarantee was authorized by Congress via the Chrysler Loan Guarantee Act of 1979, and wasn’t a generalized “slush fund” like TARP

Chrysler used federal loan guarantees to borrow $1.2 billion of the $1.5 billion available and redeemed its guaranteed loans in 1982. The U.S. government received warrants to buy Chrysler stock, which it subsequently sold at auction to Chrysler for $311 million. The government turned a (hefty) profit.

Corporate welfare, plain and simple. The true professors of free and unregulated markets must have a terrible taste in their mouths if they are still extolling its virtues. The reality is we should all be starving, the corporate suits included, as the survivors climb out of rubble and actually work and struggle to fix the system and make it safer. If we cannot rely in free and unregulated markets to unleash its devistating wrath and wipe out financial and other markets when it over exposes itself risk, then what is the point of having a free and unregulated market ideology? I suspect it is simply an opiate to appease the unknowing and simpleton denialist of the masses. Free and unfettered markets birthed “too big to fail,” and now we, the unwitting masses must continue to feed and raise this monster to its devestating and disasterious conclusion. It well suck the wealth out of the masses and place it in the hands of the few. The kings and queens of the ancient times have returned to rule over us all. All hail the corporate CEOs. Pray that they find you and your children worthy of being fed and nurtured back to health. There shall be no more raises and benefits, and the safety nets are now only for the kings and queens.

Hey Coconut Head, you need to both read and go to school and understand how our economy works, especially in respect to govt regulation.  We don’t ever have truly free markets and often it is regulation that leads to problems, whether its companies who look for the loopholes, regulators that are sleeping (including Geithner when the housing bubble was about to burst/ he was at the center of the capital markets, the NY Fed), or congressmen telling companies and industries what to do to benefit social and personal goals. 

Housing ownership increased by 3 to 5 points above a 20 yr avg of 65% btw 2000 & 2007 - did everyone suddenly come across newfound wealth? no but they sure were willing to allow someone to lend them enough funds to buy something they couldn’t really afford. Yes, the banks contributed but it takes 2 people to create a loan. Nobody twisted the arms of all those trying to have a free lunch.

CEO’s & their companies shouldn’t be bailed out as you state so vote your Congressman out of office because it is these clowns that allowed this all to occur - whether it was regulating Fannie/Freddie into oblivion or allowing industries/companies to be bailed out without asking any questions and instead focusing on their own personal portfolios’ health.  By the way CEO’s are overpaid because the shareholders allow it - i.e.mutual funds and pension funds.  If you are a union member you can help prevent this by using your pension as a lever to resolve this. If you are a mutual fund shareholder express your opinion.

Hey Chris, you need to both read and go to school and understand how our economy works, especially in respect to govt regulation.

You might start with this speech so you know which anti-regulation political party dislikes regulations because having to abide by the law interferes with their ability to run cons and scams:

http://archives.hud.gov/remarks/martinez/speeches/presremarks.cfm

The billions received by companies that ultimatley went bankrupt aren´t lost - the bankruptcy proceedings ensure that as far as possible that companies debts are paid. It would be interesting to know who got that money? How many creditors were repaid? Did it save the creditors company from bankruptcy or even strengthen their position to hire?

The effects of the bailout are probably be more far reaching that at first glance.

http://www.campaignwatch.org/more1.htm. The 80’s cost 500 billion dollars for the Savings and loan failures. Romney’s Bain Capital made money for itself a la Gordon Gecko with leveraged buyouts that saddled the companies with debt, took profits from the loans and then charged the companies admin fees to tell them who to fire and how to get out of all this debt the company had. That they didn’t have before Bain’s LBO. then when they went bankrupt, Bain walked away with a hefty profit. Staples was NOT a Bain Capital success. It occurred whe Romney worked for Bain And Company which is about start ups. Romney and others like him et al are part of the reason this failure occurred. The ethos of greed is good reigns supreme in this corner of the economic markets.
In terms of TARP HERE’s the history The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector that was signed into law by U.S. President GEORGE W BUSH on October 3, 2008. It was a component of the government’s measures in 2008 to address the subprime mortgage crisis.

The TARP program originally authorized expenditures of $700 billion. The Dodd–Frank Wall Street Reform and Consumer Protection Act reduced the amount authorized to $475 billion. By March 28, 2012, the Congressional Budget Office (CBO) stated that total disbursements would be $431 billion and estimated the total cost, including grants for mortgage programs that have not yet been made, would be $32 billion.[1] This is significantly less than the taxpayers’ cost of the savings and loan crisis of the late 1980s but does not include the cost of other “bailout” programs (such as the Federal Reserve’s Maiden Lane Transactions and the Federal takeover of Fannie Mae and Freddie Mac). The cost of the former crisis amounted to 3.2 percent of GDP during the Reagan/Bush era, while the GDP percentage of the latter crisis’ cost is estimated at less than 1 percent.[2] While it was once feared the government would be holding companies like GM, AIG and Citigroup for several years, those companies are preparing to buy back the Treasury’s stake and emerge from TARP within a year.[2] Of the $245 billion handed to U.S. and foreign banks, over $169 billion has been paid back, including $13.7 billion in dividends, interest and other income, along with $4 billion in warrant proceeds as of April 2010. AIG is considered “on track” to pay back $51 billion from divestitures of two units and another $32 billion in securities.[2]

When people think about the loans that drove the mortgage crisis, besides the fact that the Bush Administration drove those loans they need to think of something else:  The death of a paradigm.

Once upon a time in America, hard work and increasing your skill set meant job security and steady pay raises as a reward.  Under that paradigm, foolish-in-hindsight concepts like ARM (“bubble”) mortgages made sense; the prospective debtor was easily persuaded that by the time the “bubble” came along, their income(s) (plural, usually; mom works now because the artificial impact of wildly variable, but always escalating, energy prices stabbed another paradigm - manageable inflation - to death) would have increased to the point that they could afford it.

Then the great lie of inequitable free trade (itself incentivized and conceived out of the great lie of voodoo economics) came along…and the paradigm of “the American work ethic” yielding “the American Dream” was murdered; job security and pay raises were no more.

So don’t be all “Nobody twisted the arms of all those trying to have a free lunch.”...most of ‘em thought they were going to earn those homes they suddenly had access to - and the bankers who were pushing those loans who knew better (they were heavily involved in the financing of all of the offshore factories that were targeted at “the American Dream”) didn’t tell ‘em.

In fact, I would say that the housing bubble was a deliberate attempt by government to drive the United States economy with construction jobs and so conceal the damage being done by inequitable free trade/voodoo economics.

Following are excerpts from an example speech of the time:

President George W. Bush Speaks to HUD Employees
on National Homeownership Month

Washington, DC
Tuesday, June 18, 2002

THE PRESIDENT: Well, thank you all very much for that kind welcome.

[...]

But I’ve got another priority, as well. I not only want America to be safer and stronger, I want America to be better. (Applause.) I want America to be a better place. I worry about our economy, because there are people who can’t find work who want to work. In this town, people look at numbers all the time—you know, such and such a number dropped, or this number increased. What I worry about are hearts and souls. That’s what I worry about. And if somebody is trying to find work who can’t find work, we need to continue to expand our job base. (Applause.)

[...]

The goal is, everybody who wants to own a home has got a shot at doing so. The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. That ownership gap signals that something might be wrong in the land of plenty. And we need to do something about it.

We are here in Washington, D.C. to address problems. So I’ve set this goal for the country. We want 5.5 million more homeowners by 2010—million more minority homeowners by 2010. (Applause.) Five-and-a-half million families by 2010 will own a home. That is our goal. It is a realistic goal. But it’s going to mean we’re going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well.

[...]

And so what are the barriers that we can deal with here in Washington? Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that’s too high, I’m not buying. They may have the desire to buy, but they don’t have the wherewithal to handle the down payment. We can deal with that. And so I’ve asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. (Applause.)

We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year—40,000 families a year—will be able to realize the dream we want them to be able to realize, and that’s owning their own home. (Applause.)

The second barrier to ownership is the lack of affordable housing. There are neighborhoods in America where you just can’t find a house that’s affordable to purchase, and we need to deal with that problem. The best way to do so, I think, is to set up a single family affordable housing tax credit to the tune of $2.4 billion over the next five years to encourage affordable single family housing in inner-city America. (Applause.)

The third problem is the fact that the rules are too complex. People get discouraged by the fine print on the contracts. They take a look and say, well, I’m not so sure I want to sign this. There’s too many words. (Laughter.) There’s too many pitfalls. So one of the things that the Secretary is going to do is he’s going to simplify the closing documents and all the documents that have to deal with homeownership.

It is essential that we make it easier for people to buy a home, not harder.

[...]

Finally, we want to make sure the Section 8 homeownership program is fully implemented. This is a program that provides vouchers for first-time home buyers which they can use for down payments and/or mortgage payments. (Applause.)

[...]

And so, therefore, I’ve called—yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I’m proud to report that Fannie Mae has heard the call and, as I understand, it’s about $440 billion over a period of time. They’ve used their influence to create that much capital available for the type of home buyer we’re talking about here. It’s in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital.

[...]

Thank you all for coming by.

In conclusion, I would say America’s problems arise from the fact that enough politicians - all Republicans, and Democrats of the neoliberal variety - deprioritized America and the American people in their thinking.

Some of ‘em prioritized enriching America’s few; some of ‘em prioritized “sharing” America’s prosperity; some of ‘em prioritized “breaking” labor (organized, and not)...some of ‘em mixed all of those reasons together in order to justify the fact that - curiously - what they were doing would result in their own enrichment (speaking fees, lobbying jobs, corporate token positions) and global admiration/adulation.

So when you’re evaluating leaders for America, you need to choose them based upon how you think of your family:  Are you going to prioritize your family, and then help those who are less well off with what you can spare - or are you going to sacrifice your family in order to buy yourself that snazzy sports car and/or get a warm fuzzy (at least) from helping the neighbor who has that attractive wife and those stunning daughters?

America keeps picking leaders of the latter type…leaders who prioritize some or anything above America and the American people.  If we don’t stop doing that, make sure that you leave an apology in your will for your descendents.

I didn’t want to make a direct reference to this upcoming election, but I found that I couldn’t stand the idea of “implying” something…of leaving something unsaid in the expectation that the reader would analyze the evidence and arrive at a conclusion - and intended action - that would benefit all of America, and so all of their future descendants.

When you think “leaders”, you need to understand that each state picks “leaders”...U.S. Representatives and Senators, as well as their governors and state assembly members.  And you need to understand that you can tell a lot about someone by who they “hang with”...that is, who likes them, and who hates them.  That applies to “leaders”, too.

Who hates Obama?  Every single “leader” “who prioritize(s) some or anything above America and the American people”.  That should tell you something.  At least, I hope so…if it doesn’t, then it’s already too late for America.

Carol Davidek-Waller

Sep. 10, 2012, 12:26 p.m.

Val,
The S&L crisis didn’t crash the global economy.
Your figures don’t include the trillions in funny money the unFed (in fact Citicorp, B of A and Chase) handed out to the felons or the billions in low cost taxpayer guaranteed loans (unconditional) that the felons used to retire the debt so they could lobby for continuing their crime wave on our dime. The crooks are now waiting out the statute of limitations thanks to ‘elected representatives and officials they bought.
A half a trillion of TARP money and pennies for their victims is why we have a troubled economy.
Injustice squared.

There is no alternative to getting North-America busy but un-unionize first, to start making cars at minimum wages to compete and sell them in the International Automobile market place.

Digital evidences are indestructible and only a little change done in our territorial Supreme Courts can help disperse the virtual hedgehogs and bad-cats out of the heavily guarded bags in the iron-armoire of our outdated North-American Judicial system and benefit the whole world in the long run.

Frankly, I think that the banks that received bail-out money should have fired their CEO’s, with new CEO’s pay & bonuses commensurate with the “health” of the banks.  Second all of the TBTF banks should have been broken up to more manageable sizes and required to have enough deposits on hand that should future losses occur either the bank has the funds or they fail!
I cannot understand why none of that was done, as it is once again the taxpayers will be on the hook when once again these impotent masters of the universe gamble again.

@ShahIslam, who emoted “...but un-unionize first, to start making cars at minimum wages to compete”

Are you going to personally roll the cost of all union workers’ rent/utilities/mortgages/medical deductions/school loans/food/energy/etc. back to the level of 1972 - pre-OPEC oil embargo, pre-Republican betrayal - that would be required in order to make your idea workable?

My intention is not to upset anyone.
Fresh start also means -all of us have to share the inevitable financial difficult times ahead. None but we -the North-Americans are capable overcoming faster than any other nations on earth.

Not honesty or truth but money-oriented root of these problems is inside the groupy brains of a few guys in our territorial highest courts.

@ibsteve2u, Do you not realize that UNIONS are the reason that there is a minimum wage, weekends, holidays, paid vacation.  And when Reagan broke the ATC Union, that sent a tacit signal to “private industry” and there has been a war on workers ever since.  Wages have been stagnant for at least a decade (probably longer) even as prices have gone up.  Workers wages aren’t going anywhere as long as fat-cat CEO’s are breaking the bank with their “Golden parachutes”!  How about those fat-cats start taking a few cuts.  Workers have given enough, sorry.

Hmmm….a different interpretation of my words than I anticipated…likely my fault for using a word like “emoted”.  But no matter; no sense in my muddying the water with a defense of my intent given that I don’t care who raises valid points - as long as they are indeed valid, and as long as they are indeed raised.

bailout? it’s STILL GOING ON! what is QE3? It’s a bailout. It is the PURCHASE of “bad” assets from a bank, which get paid in cash and moved off the banks balance sheet. Thus allowing for less risky assets and more profitability. Also banks get to borrow at zero and invest in something with yield. No wonder the banks show a profit.

Wow, it looks like most of the banks have paid back their money.  I thought they were bailed out but kind of looks like a loan that was paid back with interest.

@CDA:  Except that is an illusion, too…the banks got/get really cheap money - at 0.0% or 0.25% - printed for them, and then the American people/taxpayers had/have to pay the banks, in turn, somewhere between 5% and 25% interest.

I.e., the American people paid TARP back for the banks by paying the private tax that was/is the spread between what the banks get money at and what they loan money at. 

The easiest way to make money in America, in fact, is in banking…you don’t even have to incur the expenses of pumping, refining, and distributing what you’re selling out of the ground like Big Oil, their closest competition in terms of the ability to levy private taxes.  That the banks could ever need a bailout speaks of incompetence and corruption on a scale that is nearly incomprehensible.

Carol Davidek-Waller

Sep. 25, 2012, 8:55 p.m.

ibsteve…..look again. Many of the banks used low cost taxpayer guaranteed loans to pay back TARP money. Loans that had no restrictions such as not being able to use our money to lobby so that people like you thought they were doing a great job.
If the banks were doing so well, why is the FED printing up a bunch of funny money to buy their worthless mortgage backed securities?

Sigh….loans have to be paid back, too.  Loans which have been or will be paid be paid back because of the spread between the cheap money the taxpayer hands the banks and the expensive money the banks rent the taxpayers.

And the banks aren’t doing too bad…

http://www.marketwatch.com/story/fdic-bank-profits-at-highest-level-since-2007-2012-05-24-101035418

Which in no way precludes the Fed taking those mortgage-backed securities off the banks’ hands…for some reason, printing money to give to banks and the 0.01% who play in “high finance” is preferable to giving those mortgage holders the money to make their mortgages good - and so make those mortgage-backed securities good.

William Greene

Sep. 25, 2012, 10:19 p.m.

Carol, reminiscent of your statement I become when I remember when dimes, quarters, half dollars and silver dollars had not a grain of copper in them.  Same deal, yes?  Still disturbing, but somehow we got used to it….the minting of the great economic lie repeated several trillion times….hey buddy, got some spare change?