If I had money, I could offer to loan it to an individual. In offering that loan, I would evaluate the probablily that said person would repay the loan. Depending on that evaluation, I would request that they pay it back in a manner that is front loaded, based on how I evaluate their ability to repay the loan. Should I give a loan to said person, I am taking on the risk that the loan will not be repaid. However, I have assumed the risk that my loner will not repay me. And with that, I apologize for all those whom have take an elementary economics course.
My point comes now! This is the state in which many lenders (read: huge, huge banks) find themselves. Big banks, along with the investment houses that bought consolidated loans, assumed huge risks through giving loans to individuals and families that perhaps could not have paid them.
My point is that banks, not the federal government, should shoulder the burden of loans that have defaulted. These banks, which have posted incredible returns, should be assuming the burden of these defaulted loans. There is no reason why the federal government should be bailing these companies out. Banking is a for-profit endeavor. Or for-loss endeavor.
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