Will we ever get the answer to……….
…the question: How much money was lost when banks financed home mortgages for people who could not afford to buy – let alone – own such homes nationwide? We honestly wonder if that day will ever come. Yet this reality – letting people buy homes without the financial strengths to ever make payments to keep such homes – was recognized as a major cause for the financial collapse in 2008 together with some other activities that nearly brought the worldwide financial institutions to the brink of total collapse. If we remember correctly, that is how the “experts” described the situation in the fall of 2008 when we immediately had to appropriate 700 billion dollars to stop the world from coming to an end. This fund was called TARP which stood for Troubled Assets Relief Program and its main purpose was to purchase assets and equity from financial institutions to strengthen its financial sector created during the subprime mortgage crisis.
We have to confess that we did not understand all this ‘stuff’ and simply were amazed at some of the findings as to the causes for this apparent financial meltdown. We did not and still do not understand the roles that Freddy Mac and Fanny Mae played in all this, after all, we are not bankers and do not pretend to be. We heard the various accusations against them and they all did not make a lot of sense. What bewildered us at the time was that the company AIG received huge amounts of money – 70 billion dollars of TARP money – and they then turned around and paid European banks and institutions huge amounts of money. Since this was all reported as facts, we accepted it as such in the hope that there would be eventually a complete reconciliation of the money – mind you, taxpayers’ money – by telling us what we got for it.
But Common Sense University has not seen anything of the like, only bits and pieces come out ever so infrequently, all we know is, if we can believe these reports, that nearly 200 billion dollars of TARP money were never spent and are sitting somewhere. Now this is where our interests perk up again. How is that possible we ask? Think of this in simple terms, one we all can understand: Your son/daughter comes to you and confesses to have gotten into financial trouble and is in need of, let’s say, $50,000 immediately. If the money will not be given, the kid will have to file for bankruptcy and there will be other even more dire consequences. “And please, do not ask me for details, Dad” your son/daughter says to you. So, you do not like it at all but give him/her the money and the kid goes off. Over a year later, you inquire and find out that your offspring is ok again and guess what, has about $15,000 left over, money that was not needed. How would you feel about that? Should we not demand collectively as U.S. taxpayers to get some answers on the TARP money?
How about answering the fundamental question: How many billions of dollars were lent to people who bought homes they could not afford? Or was it even in the trillions of dollars? We understand that the banks were pressured to relax standard (and well proven) lending criteria and procedures but that is not an answer that should satisfy us. Can we not demand to get some reliable summarized audit results from all the banks combined in our country that will tell us that ‘X’ amount of houses were purchased (and financed) by ‘X’ number of people and this all amounted to ‘X’ number of dollars?
For whatever “Noble” reason this apparent experiment in social engineering was created by these culprits who initiated and directed it, one cannot ignore the reality that it has been a humongous failure and it is generally accepted as such but that should not mean that we just shove it under the rug, or is it? The applecart is turned upside down when we are asked to accept that people without money can buy the same things as the people with money! We think it’s time to straighten that applecart right side up. Let’s hope that we will never see such atrocious experimentation in the future.
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