We are told that had we not bailed out the banks, we would have faced economic disaster. Yet, no elected official has been able to define "economic disaster" or provide evidence to support their claim.
This claim of "economic disaster" becomes all the more spurious when we consider the hundreds of local and regional banks that not only survived, but actually thrived through the financial calamity of the past few years.
Despite government efforts to try and stop it, here's what good banks, companies, and individuals did to protect themselves from the troubled banks:
-- Good banks bought branches from troubled banks
-- People moved their services from troubled banks to well-run banks
-- Investors in the troubled banks sold their stocks and either did not re-invest in banks or put their money in well-run banks
And if you wondered whether the government fixed the "Too Big to Fail" problem with the Dodd-Frank law, we now have fewer banks that are larger than they were before.
What has been the outcome of the bank bailout?
1) US taxpayers saved large, global banks from going broke due to the banks' reckless behavior. Meanwhile, many of those same Americans have, as Paul said, lost their homes, cars, and had to declare bankruptcy.
2) US taxpayers incurred $13 billion of new debt that will have to be paid off. Yet, the banks are now free from such obligations.
3) Many of the banks that Americans bailed out were foreign banks; not even US companies that pay US corporate taxes.
4) None of this was revealed to the American public; US voters were kept in the dark about these amounts and many of the specific institutions who received the bailout money.
Why should this matter?
1) It is unethical and wrong to make taxpayers foot the bill to "rescue" large and influential banks that took excessive risks, knowing they'd be bailed out.
2) Congress' Community Reinvestment Act and the Federal Reserve's excessively cheap money from the 1990s -- through low interest rates -- has resulted in lower valued homes and inflation that we see in high food and gas prices.
3) This "recovery" is lasting and will last much longer because we have failed to take swift action to allow for the market to correct itself. We went on a binge for too long, and are now refusing to end the party. Remember, when the government allowed banks to fail and cut spending in 1921, unemployment dropped from 11.4 to a little over 2% WITHIN TWO YEARS.
One question a voter can ask is which candidate has called to end this practice by auditing the Federal Reserve, and then ending the Federal Reserve.