Ken Gansmann: US debt – the real culprits
When I was a young boy, like my 7-year-old grandson, I thought debt was borrowing the money I was going to get from grandma and grandpa for my next birthday, so I could immediately go buy the latest and greatest toy.
Most American’s support the president’s goal of “common sense” regulation that will prevent future crises like the one that brought our financial system to its knees in 2007 and 2008. The problem is that what the president and Congress are proposing does not fix the problem. Sen. Chris Dodd’s bill specifically creates a $50 billion “bailout” fund to continue using our money to bailout those who are deemed “too big” to fail. Instead, it makes scapegoats of the financial industry for our government’s own regulatory failings – the same ones that led to the 2007-2008 financial meltdown.
Yes, Wall Street needs regulation – but regulation that will work without turning one of our most sophisticated industries into a wholly owned subsidiary of the US government.
This past week, our economically illiterate president gave another “reading,” taking Wall Street to task for our current economic meltdown and never once mentioned the elephants who should have been in attendance and the object of his venting – Fannie Mae and Freddie Mac who have already cost we tax paying citizens $400 billion-plus. Do you wonder why he doesn’t take questions on economic issues?
Our financial nightmare in 2007 was due largely to the fact that nearly half of all loans in the US were sub-prime or junk loans. When the housing bubble burst, these loans went bad in bunches – leaving banks with huge losses and often insolvent. Two thirds of these loans were either held or guaranteed by the government (read we the taxpayers) – Fannie Mae and Freddie Mac. This was the real reason for the meltdown.
Even my grandson has more economic sense than this president and his administration.
Mr. President and Congress, quit spending our hard-earned tax dollars in such a loose fashion. You are spending our kids and grandkids financial futures.
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