Government Bailout: What Will It Cost?
Tuesday, September 8th, 2009Washington Post’s September 7 article “Mortgage Market Bound by Major US Role” by writers, Zackary A. Godfarb and Dina ElBoghdady is an excellent overview of the events and circumstances that led to the mortgage meltdown. In addition, it gives the average individual a better understanding of exactly what is at stake as a result of the government’s intervention in salvaging lenders that were on the verge of bankruptcy.
Bottom line, all the bad loans that created this situation are still there, the difference now is taxpayers are now ‘on the hook’ instead of private banks and lending institutions. The numbers are staggering and the risky loans are still there, they are just backed by the government now.
When the next wave of foreclosures starts late this year and into early 2010, U.S. taxpayers will ultimately pay the price of the bailout. What this will mean to an economy already struggling to just to stabilize is anyone’s guess, but it probably won’t be positive.