Banking Cronyism
The US
Treasury is responsible for collecting taxes and paying the bills of the US
government. Budget deficits lead the Treasury to borrow selling bonds with the promise
of a future payment plus interest expense. The financial collapse of 2008 due
to unrealistic government backed mortgage loans led some large banks to the
edge of bankruptcy. The Treasury Secretary and ex-Banker Tim Geithner lent
money to his associates in these banks with limits on their potential losses. Taxpayers
were left holding the bag for these banking cronies. There were smaller more
efficient banks that could have stepped in had the large banks gone bankrupt.