STIMULUS, ANOTHER NAME FOR MONEY SCHEME

Leaders of the "Trickle Down" economic policy decided that they could make a bundle in the housing market if we had a housing boom. There were a lot of people who wanted expensive housing but there were limited funds available. They figured that if these people could get credit they would start buying. The first thing to do was to get banks to give sub prime loans. (These are loans that are higher than the collateral backing the loan.) To encourage the banks to make these loans the two "Mac Agencies) would buy the loans from the banks, giving them a commission without any risk. Both good loans and sub prime loans were sold to the Macs. When the the Sub Prime loans overwhelmed the Macs, Goldman Sacks and some lesser firms packaged the loans into huge confused bundles and sold them to AIG, charging a hefty commission of course. When the mortgage payments stopped coming through, The Mac's stopped receiving their share of the payments and AIG stopped receiving their share as well, and when AIG ran out of available funds to pay off on the failed mortgages, the crisis started. Usually when there is a foreclosure on a failed mortgage, the sale of the property reimburses the Insurers (AIG ultimately in this case) and the loosers are the mortgagees who failed on the loan. In the case of the sub prime mortgages the sale of the property was much less than the amount owed, and both mortgagees and Insurance companies suffered the loss.

The government decided that the Insurance Company (AIG in this case) was too big to fail and Goldman Sacks either confirmed this or advised them of their decision. Immediately, the Government Official in The Bush Administration that used to be with the Investment Companies got together an enormous STIMULUS package to bail out the insurance companies (AIG in particular.) Reportedly, AIG was then able to pay the bonuses owed to their officers and also to pay Goldman Sacks for their "services"

When the new administrtion took office, the Stimulus action continued with the new Secretary of the Treasury (who also was a former officer in the Federal Reserve System) promoted the strategy that the financial institutions were too big to fail. As a result, the bail out continued; bonuses have been paid, and Goldman Sacks and some lesser investors have made billions while Main Street continues to be in Crisis.

In all fairness, some other things have been done to ease the pain on Main Street but continued
Stimulus (or pay out) of the financial investment companies who caused the crisis, will not solve the problem. It will mostly just add to our enormous debt.