Sunday, March 8, 2009

Why not bring back the RTC?

When the Savings and Loan Industry failed in the late 1980's, the federal government instituted the Resolution Trust Corporation to deal with the liquidation of what are now called "Toxic Assets" held by the S&L's. From Wikipedia:

"The Resolution Trust Corporation (RTC) was a United States Government-owned asset management company charged with liquidating assets (primarily real estate-related assets, including mortgage loans) that had been assets of savings and loan associations (S&Ls) declared insolvent by the Office of Thrift Supervision, as a consequence of the savings and loan crisis of the 1980s. It also took over the insurance functions of the former Federal Home Loan Bank Board. It was created by the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), adopted in 1989. In 1995, its duties were transferred to the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation.

Between 1989 and mid-1995, the Resolution Trust Corporation closed or otherwise resolved 747 thrifts with total assets of $394 billion."

This seems like a viable option for the Federal Government now instead of pouring more and more of our future taxes into a bottomless pit.