Cleo's Surf-o-rama

Stuff that catches my eye, mostly politics, some other items of note...

Monday, September 22, 2008

What Did the 80s S.& L. Bailout Cost?

There have been varying statements floating around about the overall cost to taxpayers of the S&L bailout in the late 80s. Here is an article from 1996 that gave an overview of the total costs. The figures cited are in line with what I have been hearing mostly, including on the Wikipedia page on the topic.

From 1996:

"The General Accounting Office today released the most comprehensive Government study so far on the costs of the savings and loan bailout, placing a total price tag on the debacle of nearly half a trillion dollars, including more than $130 billion from taxpayers. The figures were roughly in line with previous estimates, and included both direct and indirect costs as well as interest payments that will stretch out for decades. The money went to clean up the financial mess from the failure of more than 700 savings institutions in the 1980's and early 1990's as a result of mismanagement, fraud and an economic downturn in states like Texas and California. "The bad news in this report is that the cost of the failure of many thrift institutions, with interest, approaches half a trillion dollars and that taxpayer accountability due to bonds issued will continue through the year 2030," said Representative Jim Leach of Iowa, a Republican who is the chairman of the House Banking Committee. "The good news is that America's financial institutions today are stronger and sounder than in many years, that the bank and savings and loan insurance funds are positively capitalized and that prudent regulation is in place," Mr. Leach said." G.A.O. Puts Cost of S.& L. Bailout at Half a Trillion Dollars - New York Times