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Savings & Loan Crisis

The purpose of this research is to examine the country's savings and loan crisis, as of midsummer 1990. Considered in this examination are (1) the magnitude of the problem, (2) the causes of the problem, (3) solution of the problem, and (4) an evaluation of the government's handling of the problem.

In midsummer 1989, the Bush Administration reported to the Congress that as many as 500 savings and loan institutions would likely have to be closed by the government (Nash, 1990). In midsummer 1990, the Chairman of the Resolution Trust Corporation, the government agency established to deal with the crisis, reported to the Congress that the true number of institutions which the government will likely be required to seize will be closer to 1,000 (Nash, 1990).

The Chairman also requested $100 billion to deal with the problem in fiscal year 1991 (Nash, 1990). This amount, together with the $50 billion appropriated for the Resolution Trust Corporation in the current fiscal year exceeds the estimate of the total fiveyear cost of the bailout ($137 billion) provided by the Bush Administration last summer (Nash, 1990). Additionally, no responsible individuals think that the total

1 2cost of the bailout will be limited to $150 billion. Realistic estimates of the total program cost now range between $400 billion and $1 trillion (Nash, 1990).

National politicians, from the president on down, tend to treat the savings and loan crisis, as they do the drug crisis, and all other crises: as if it is some alien in our midst, which has no relation to our society, and which certainly is not the fault of whatever politician or political party spokesperson is doing the talking at the time. As is true with respect to the drug crisis, and other crises, this approach to the savings and loan crisis overlooks the facts that (1) the savings and loan crisis is the result of actions and policies integral to American society and federal gover...

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Savings & Loan Crisis. (1969, December 31). In LotsofEssays.com. Retrieved 17:42, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1684521.html