Just nationalize the banks already

According to the Washington Post, the Obama Treasury Dept., under the leadership of Tim Geithner, is planning to buy up the crappy debt crushing banks and thus the banking system.

There is no doubt about it. We need a good financial system in place if our economy is going to recover and thrive. People need to be able to take out loans to fund big purchases and start or grow businesses. But right now, bad debt has pushed down the value of banks so much that they don’t have the backing to make loans except in extremely low risk circumstances (meaning you need a perfect credit score to get a loan, and you’re paying a lot of interest).

But that doesn’t mean the government should buy the bad debt and preserve the current structure of failing banks. For starters, I’m certain that having the government nationalize or even outright buy the banks would be cheaper than buying all the bad assets at some sort of inflated price. For instance, Citi could be bought for $20 billion.

Second, there is no proof that giving money to the banks will ease the credit crunch. Last year, Bush & Co. gave hundreds of billions to the banks, and the banks promptly used it to pay bonuses and acquire their stricken competitors. So now we’re out hundreds of billions and the situation is still getting worse.

As

2 Comments

  1. Jordan

    Dude, we have to pay for it, otherwise, how can Citi have more money to run after they spend our $400 mil on naming a stadium? They’re too big to be responsible…

  2. Minie Hillack

    barack is a soft tyranny plain and simple