Posted 4/7/2021 09:04 (#8937782 - in reply to #8937324) Subject: RE: Thinking about ag economy
The Democrats created the S&L Crisis by changing the amortization allowance in real estate. Once the Democrats did that, they created a one-way market where everyone who bought real estate for an investment wanted to sell. There was NO BID and because they had regulated S&Ls to lend on real estate in the local market, they created a complete nightmare. The tax changes imposed by the Democrats set in motion from 1986 to 1995, the collapse of federally insured savings and loans in the US saw the closures from 3,234 to 1,645 which were left standing. The impact was not confined to just the S&Ls, for banks were also impacted by loan they made mostly on commercial property. Between 1980 and 1994 more than 1,600 banks insured by the FDIC were closed or received FDIC financial assistance all because of tax changes by the Democrats who never accepted responsibility for the impact on investment. The market share of S&Ls for single family mortgage loans collapsed from 53% in 1975 to 30% by 1990. U.S. General Accounting Office estimated cost of the crisis to around $160 billion+ when the total national debt was $3.2 trillion or about 5% of the national debt. Today, that would be almost $1.1 trillion today. The federal government ultimately appropriated $105 billion to resolve the crisis. After banks repaid loans through various procedures, there was an estimated net loss to taxpayers of somewhere between $123 and $133 billion dollars by the end of 1999. The Financial Institutions Reform, Recovery and Enforcement Act of 1989 was the solution for something the Democrats created. Congress passed the act in 1989 which dramatically changed the savings and loan industry and its federal regulation which was signed into law on August 9, 1989. It provided for: The Federal Home Loan Bank Board (FHLBB) and the Federal Savings and Loan Insurance Corporation (FSLIC) were abolished. The Office of Thrift Supervision (OTS), a bureau of the United States Treasury Department, was created to charter, regulate, examine, and supervise savings institutions. The Federal Housing Finance Board (FHFB) was created as an independent agency to replace the FHLBB, i.e. to oversee the 12 Federal Home Loan Banks (also called district banks) that represent the largest collective source of home mortgage and community credit in the United States. The Savings Association Insurance Fund (SAIF) replaced the FSLIC as an ongoing insurance fund for thrift institutions (like the FDIC, the FSLIC was a permanent corporation that insured savings and loan accounts up to $100,000). SAIF is administered by the FDIC. The Resolution Trust Corporation (RTC) was established to dispose of failed thrift institutions taken over by regulators after January 1, 1989. The RTC will make insured deposits at those institutions available to their customers. FIRREA gives both Freddie Mac and Fannie Mae additional responsibility to support mortgages for low- and moderate-income families.