Topic: Why didn't the federal government give bailout money to home owners (Read 764 times)

The problem, to make a very long story short, is that banks all pacakaged the homes into investment securities called Collateralized Debt Obligations (CDOs). In order to make those securities "safe", they were backed up by a form of insurance on those investment securities called Credit Default Swaps (CDS).
Basically, all the banks figured that with enough mortgages bundled together in CDOs, with enough CDS insurance being sold on them, nothing could go wrong and they could make insane amounts of money. Which they did. They assumed that basically the entire housing market wouldn't collapse all at once.
But when the housing market did go belly up, that meant it wasn't just the value of the houses that was underwater. It meant that all those investment securities were sour, but more importantly that the CDS insurance contracts had to be paid off.
Only problem is, there was more money owed on the CDS insurance contracts than there is actual money in the world. There was $70 trillion in CDS obligations. Basically, all of Wall Street was screwed infinite times over. And if Wall Street went bankrupt, no more loans of any kind to anyone. And then poof--goodbye economy.
So the banks had to be bailed out. The problem is that we gave them a blank check, essentially, when we should have done what was necessary then taken them over and/or broke them up into little pieces.

And also because this country is run by corporations, very long story short. Why did banks and huge car manufacturers only get money?
Because Thanks Obama

Because banks won't go blow all of the bail out money on scratch offs.

Because federal government only bailout what provide them financial supports them during election.

because they are the weak end of thing, and someone has to pay the missing money!

Because they didn't want the overall economy to collapse, and take down the banking system, and foreign currency exchange systems with it, when they could do it the way they did it, and save the overall system, but let some people off who morally and ethically should not have gotten off. I STILL think they took the least-bad approach.
The problem itself could have been prevented, back during the Clinton Administration, but by the time they did what they did, it was all about preventing the total collapse of the economy, which would actually have actually have done the most damage to the ones who played by the rules.
In a democracy it is STILL better to let the guilty go free than to punish the innocent, although both are bad choices, sometimes they are the only choices.

You may as well debate over which of two lumps of dogshit you would prefer to have for breakfast.

Remember that Bush was the one who started with the bailouts. You might come back with the, "Oh sure blame Bush." But facts are facts.

I remember that being suggested a lot, and there being a big backlash to the idea that, "Why should someone who wasn't responsible get bailed out why I have to struggle paying off my home."

At least he's better than bush, way better. Bush ruined the country the Economy stated multiple wars and allowed banks to takeover the country.

Obama is not perfect but he is leaps better than Bush.

You need a big campaign in order to become president. This money needs to come from somewhere (banks, companies etc).
We are not living in a democracy 

Because money exist in debt, if the owners paid their debts the banks would still be screwed, they need to own us to profit

Why didn't the federal government give bailout money to home owners instead of the banks?