Current US housing & economic problems and past Savings & Loan Crisis & bailout
This is really the second time a large government bailout was done because of
a federal guarantee. Savings and Loan Crisis, that started about 1986, required a large bailout of FSLIC (Federal Savings & Loan Insurance Corp). The bailout contributed to the large budget deficits of the early 1990s, according to Wiki.
What I remember is that a lot of commercial loans went bad. This along with
Fed Chair Paul Volker increasing interest rates to battle inflation (necessary action at the time), caused the problem. It seems to me there are really a
number of similarities, between that crisis and the current one. I have not
seen anyone in the media say anything about all this.
Looks to me like a federal guarantee, often leads to business taking risks they
otherwise would not take. Instead of more affordable housing for families. The
S & L Crisis seems to be pretty much forgotten about.