Can Congress just walk away from a problem it helped create? Maybe, maybe not.More.....There's now some talk of a grand deal between the Treasury, the Fed and Congress for a "permanent" solution: creating a government agency to buy up all the bad subprime debt, just like the Resolution Trust Corp. did with bad real estate in the 1980s and 1990s.
Already, the U.S. Treasury and Federal Reserve are spending hundreds of billions of dollars to keep the subprime crisis from crashing the world economy. The collapse of twin mortgage giants Fannie Mae and Freddie Mac, along with the failures of Lehman Bros., Bear Stearns and insurer AIG, expose taxpayers to more than $1 trillion in liabilities.
Until now, Congress has been surprisingly passive. As Sen. Majority Leader Harry Reid put it, "no one knows what to do" right now.
Funny, since it was a Democrat-led Congress that helped cause the problems in the first place.
In addition, you can read my personal experience with the Community Reinvestment Act and the law of unintended consequences.
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