A return to
No two bailouts are exactly the same.
And when it comes comparing the savings and loan era Resolution Trust Corp. to the $700 billion banking industry rescue now before Congress, there is one difference that really stands out.
Back in the stone age of 1988, when we were merely trying to take care of regional thrifts that had made too many commercial real estate loans, the government actually was experimenting with a truly novel idea. It was attempting to pay its own way with some balanced-budget rules.
The rules started out under something called the Gramm-Rudman-Hollings amendment, later shortened to Gramm-Rudman. Yes, former McCain adviser Phil Gramm was a co-author.
The rules, dubbed “paygo” by former Federal Reserve Chairman Alan Greenspan, went through several modifications. But they remained in place through the George H.W. Bush and Clinton administrations before the GOP-led Congress allowed them to expire early this decade.