How much of National Debt was due to bailing out mortgages/banks? (loans, 2015)

[hound 109]

The National Debt (using the word debt, which is the total number...not deficit which is an annual number) has in round numbers gone from an astonishing 10 Trillion dollars (approx. number) in 2009 to a breathtakingly astonishing 20 Trillion dollars today (or tomorrow). That's Trillion with a Tr.

I believe (& or) suspect that a lot of the 10 Trillion dollar bump (over the last 8 years) was due to the buyout (or help, or modification) of AGI - the PMI firm (back in 2008 or 2009) and also to help or bail out Fanny/Freddy, & to provide "modifications" for Mortgage Holders that were underwater (say from 2008-2015).

I know of one person (for example) who had his mortgage reduced (by BofA) from 650K to 500K several years ago (this was a "loan mod"). Question: Who took the hit on the 150K? The Bank? The Feds?

I've done some round number spit balling: If 1 million homeowners did a loan mod......for say 100K. The bill (or "total modification") would be ONE Trillion Dollars.

If the Feds did NOT pick up the bill, please advise. (But I doubt that BofA, out of the goodness of their heart, would lower a bill by 150K....it's not in their nature....unless there was a reason for them to do so.)

I'm trying to understand how these modifications worked (who paid)?

Thanks.

[cpg35223]

Well, it's important to note that the Federal government actually made a sizable profit when all was said and done with TARP. And the money was, for all intents and purposes, repaid by its beneficiaries.

So, to answer your question, none.

As far as your friend's anecdote, I have zero idea.

http://money.cnn.com/2014/12/19/news...-bailouts-end/

[pipsters]

In a fiat currency system debt = money. As debt is reduced so is the money supply which would be bad for economic progress. Don't worry about the total amount, what's more important is rate of increase. If it stays consistent with GDP in theory there will be very little inflation.

[mrviking]

Originally Posted by cpg35223

Well, it's important to note that the Federal government actually made a sizable profit when all was said and done with TARP. And the money was, for all intents and purposes, repaid by its beneficiaries.

So, to answer your question, none.

As far as your friend's anecdote, I have zero idea.

U.S. ends TARP with $15.3 billion profit - Dec. 19, 2014

True the banks paid back all the money from the bailout, some people like to forget conveniently. As far as the Auto Bail-Out, the tax payers too a major loss on that.

[Pub-911]

On the auto portion alone, a loss of just over $9 billion. On TARP altogether, a gain of about $15 billion.

[leastprime]

Originally Posted by hound 109

The National Debt (using the word debt, which is the total number...not deficit which is an annual number) has in round numbers gone from an astonishing 10 Trillion dollars (approx. number) in 2009 to a breathtakingly astonishing 20 Trillion dollars today (or tomorrow). That's Trillion with a Tr.

I believe (& or) suspect that a lot of the 10 Trillion dollar bump (over the last 8 years) was due to the buyout (or help, or modification) of AGI - the PMI firm (back in 2008 or 2009) and also to help or bail out Fanny/Freddy, & to provide "modifications" for Mortgage Holders that were underwater (say from 2008-2015).

I know of one person (for example) who had his mortgage reduced (by BofA) from 650K to 500K several years ago (this was a "loan mod"). Question: Who took the hit on the 150K? The Bank? The Feds?

I've done some round number spit balling: If 1 million homeowners did a loan mod......for say 100K. The bill (or "total modification") would be ONE Trillion Dollars.

If the Feds did NOT pick up the bill, please advise. (But I doubt that BofA, out of the goodness of their heart, would lower a bill by 150K....it's not in their nature....unless there was a reason for them to do so.)

I'm trying to understand how these modifications worked (who paid)?

Thanks.

HARP (Homeowners' Affordable Refinance Program), Banks in lieu of being sued for malfeasance & fraud and probably losing either in a writeoff, (foreclosuere, Bank Owned) or in court. Stock Holders who sold at a loss, CreditCard holders who paid 24% interest when Bank's cost of borrowing was <1%, US monetary system if we were in a inflationary environment (FederalReserve QE1-3), World Banks and foreign entities, AND lastly
government suits on the banks with the proceeds going to the HARP program. It's complicated.

We even paid for the adjustments and foreclosures even though we didn't have a mortgage or use credit cards. We gained and lost in our retirement accounts. "The Lost Decade" of 401k and IRA contributions and balloon value of the exisiting 401k & IRA.
YMMV

[cdelena]

The debt comes primarily from entitlements (as that is the largest part of the budget) but it is hard to pin down as funds disbursed with limited management and questionable reporting. With the national debt of 20T I would guess the bailouts are less than 1%.

[functionofx]

We won't be able to know, unless the federal reserve is audited. It is likely the federal reserve created trillions of dollars off the books without Congress or the Presidents approval.

The meltdown came as the result of government coercing banks to make bad loans, and banks desperately wanting to find a way to unload them. The derivative market was created as a venue for banks to keep the federal government happy with them as well as share holders.

[aridon]

Originally Posted by functionofx

We won't be able to know, unless the federal reserve is audited.

They do get audited.


https://www.federalreserve.gov/faqs/about_12784.htm

[bpollen]

Originally Posted by hound 109

The National Debt (using the word debt, which is the total number...not deficit which is an annual number) has in round numbers gone from an astonishing 10 Trillion dollars (approx. number) in 2009 to a breathtakingly astonishing 20 Trillion dollars today (or tomorrow). That's Trillion with a Tr.

I believe (& or) suspect that a lot of the 10 Trillion dollar bump (over the last 8 years) was due to the buyout (or help, or modification) of AGI - the PMI firm (back in 2008 or 2009) and also to help or bail out Fanny/Freddy, & to provide "modifications" for Mortgage Holders that were underwater (say from 2008-2015).

I know of one person (for example) who had his mortgage reduced (by BofA) from 650K to 500K several years ago (this was a "loan mod"). Question: Who took the hit on the 150K? The Bank? The Feds?

I've done some round number spit balling: If 1 million homeowners did a loan mod......for say 100K. The bill (or "total modification") would be ONE Trillion Dollars.

If the Feds did NOT pick up the bill, please advise. (But I doubt that BofA, out of the goodness of their heart, would lower a bill by 150K....it's not in their nature....unless there was a reason for them to do so.)

I'm trying to understand how these modifications worked (who paid)?

Thanks.

No.

The two main contributors that wiped out the 2000 surplus and sent us into historic debt:

**The large tax cuts during the Bush Administration, and then the extension of them in 2010. (They were made permanent in 2012 for SOME people, but reverted for the rest.) The cuts were passed w/o a way to pay for them (there isn't a way to pay for such large tax cuts, anyway), so this was merely a cut in income for the country.

**The Iraq and Afghanistan wars (a huge spending increase).

Our country's budget isn't large, for the size of our country, so budget cuts wouldn't make that much difference in paying for the tax cuts/the deficit.

So there was a big decrease in revenue and soon thereafter a large increase in spending on two wars.

Estimates are that the tax cuts cost the country 1.8 Trillion Dollars, plus the large interest we would've earned on that. I also read that they reduced our revenue by about 1/3 of the GDP for just the first few years.

I've read that the continued revenue loss on the remaining tax cuts that were made permanent has added about $3.5 Trillion Dollars to the debt, since 2010.

The bailouts to AIG and others were in the BILLIONS, not TRILLIONS. On top of that, our country made a PROFIT on the AIG bailout by selling AIG stock (which was made possible by the bailout protecting the stock). (If we hadn't bailed them out, the cost to the country would have been far greater, as the financial sector would have collapsed.)

So you can see by just the basic numbers that the bailouts would not have had nearly as great an impact on our deficit as huge tax cuts and increased massive spending that accompanies wars.

The GM bailout was repaid, so it didn't cost us, ultimately, and saved us a lot of money by saving the company, the jobs, the services that service the industry, etc.