Buying Bad Debts
The idea of the government buying bad debts is utterly appalling to me. It should be to you as well.
If you’ve ever been turned down for a bank loan, you’ve no doubt heard ‘the lecture’ from the banker – feigning an apologetic tone. The lecture always includes comments like: “we have a fiduciary responsibility to our shareholders” • “you just don’t have enough collateral” • “the bank doesn’t make loans which it thinks the borrower may not be able to pay back in a timely manner” • “we’d like to help, but we’re bound by laws to protect our depositors”
Now comes the federal government with a wallet full of our tax dollars. Well, actually that’s not really accurate. The federal government is broke, borrowing money left and right, and is deeply into deficit spending. So the money they will spend to buy bad debt is on the heads of our children and grandchildren.
Anyway, the federal government wants to buy up the bad debt accumulated by the banks to get it off the books – and get a fresh start. These debts were created when the banks were making big bucks off of them. But now that times are tough, they are losing money, and we’re supposed to help them out of the hole they themselves dug and eagerly climbed into. Interesting that we didn’t get checks form them while they were raking in truckloads of money.
It’s also interesting that banks still don’t want to loan any money. They just want the American people to give them money – and help them get rid of bad debts.
I think the person(s) in charge of even considering buying bad bank debts should be sat down and given “the lecture.”
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