> subsidize mortgages on houses that should have been repossessed
But that's also not what happened.
What we did is buy back junk assets from banks to keep the banks from going under. The only way it really "subsidized" mortgages is in that it kept banks afloat which allowed them to keep issuing mortgage loans.
People, particularly people that fell for predatory lending, still lost their homes. The people that were mostly aided by the bailout were investors who bought snake oil mortgage backed securities which had fake credit ratings applied to them.
And the reason people take a dim view on this is because it really was only people with significant assets in the first place that saw a benefit from these government interventions. A direct result of the regulation was it became a lot harder for a few years to get a home loan unless you had significant assets behind you.
That's not to say some percentage of these interventions didn't help everyone. It's always messy. But it is saying that a lot of people would have been in a much better situation had the government, instead of bailing out the banks and investors, taken that same money and given it directly to the citizenry. Even the banks and investors would have ultimately been in a better position as people would have ultimately taken that money and spent it on things like their mortgages which they fell behind on.
There were specific mortgage subsidies as part of tarp. For instance the making homes affordable and hardest hit fund programs.
But beyond that if the mortgages had been sold at market prices many of them would have been snapped up by companies that aggressively went after the secured properties. That’s the _natural_ outcome of letting the market action happen. More people would have been put out of their homes.
I’m fairly ambivalent on tarp. I think letting actors take risky actions and get bailed out creates a moral hazard. But that applies to mortgage holders who were over extended and auto workers who get bailed out ahead of other stake holders too. I can see a strong argument that we should have biased that way, but to say we didn’t help “regular” people is just false narrative.
But that's also not what happened.
What we did is buy back junk assets from banks to keep the banks from going under. The only way it really "subsidized" mortgages is in that it kept banks afloat which allowed them to keep issuing mortgage loans.
People, particularly people that fell for predatory lending, still lost their homes. The people that were mostly aided by the bailout were investors who bought snake oil mortgage backed securities which had fake credit ratings applied to them.
And the reason people take a dim view on this is because it really was only people with significant assets in the first place that saw a benefit from these government interventions. A direct result of the regulation was it became a lot harder for a few years to get a home loan unless you had significant assets behind you.
That's not to say some percentage of these interventions didn't help everyone. It's always messy. But it is saying that a lot of people would have been in a much better situation had the government, instead of bailing out the banks and investors, taken that same money and given it directly to the citizenry. Even the banks and investors would have ultimately been in a better position as people would have ultimately taken that money and spent it on things like their mortgages which they fell behind on.