Thursday, January 27, 2011

Goldman Sachs gets 2.9 billion from US taxpayers

Photo courtesy AP from Huffington Post Shahien Nasiripour.

Is it just me? I just don’t get these corporate bailouts.

AIG got 182 billion, and Goldman Sachs got 2.9 billion of that money. Add that to the bailout funds received by all the companies who contributed to the current recession/mortgage foreclosure crisis, and I cannot imagine how much money has been given to these companies. What a win-win situation for them – earn huge amounts of money by fleecing the American people, and when the deck of cards you have built collapses get the US Government to cover your losses. It is said they are “too big to fail”. If they are too big to fail, then they are too big. Why not let the free market work, let them fail, and have a fresh start here. Are these mega bailouts a precedent for future corporate recklessness?

Yet, so many American families are homeless due to the foreclosure crisis. As a real estate broker I’ve worked with many families who could afford their mortgage but had missed a few payments due to illness or some other one-time incident and could now pay. Sometimes all they need is a very small loan modification to get back on their feet and pay their mortgage regularly again. Often when they tried to get their mortgage back on track again the lenders didn’t want to modify even a small amount and forged ahead ruthlessly with the foreclosure.

A subsidiary owned by Goldman Sachs, Litton Loan, was one of the larger sub-prime lenders who profited from the housing boom. Mortgages were being made so carelessly, that someone on minimum wage was able to buy a substantial house due to the super low “teaser” mortgage payments that would increase so much over time the home would become unaffordable. This little fact was often not explained to the unsuspecting homebuyer when the loan was taken out.

So...let’s see if I understand this. The US Government has paid billions of dollars in bailout money to the large corporations who contributed to the recession by reckless lending practices.

Meanwhile more and more Americans are homeless, and without healthcare.

The irony here is that the American taxpayer is footing the bill.

Yeah, makes perfect sense to me now. Unfortunately.

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