Paying the Savings and Loan Bill

When Mr. Bush came back to Washington, the crisis in the savings and loan industry finally emerged on the public agenda. The problem had been safely hidden away throughout the campaign season by a conspiracy of silence involving incumbents of both parties. When the crisis at last crawled from under its rock we learned why the politicians were so eager to keep it concealed. It is a scary beast indeed.

Thanks to the marvels of the last decade's deregulated financial marketplace, we're looking at a savings and loan bailout tab of $100 billion in taxpayers' money. And now that the savings and loan issue is out, the administration is apparently hoping that the segment of the public not personally affected will be put off by the complexity of the issue and so accept the word of the experts and quietly pay the bills.

The desire to bury the issue is bipartisan. As we've been learning recently, some of Democratic House Speaker Jim Wright's more generous friends were endangered savings and loan operators, and Wright is not alone in his embarrassment.

The savings and loan issue is complicated. It's also, to be frank, kind of boring. It has little of the moral pizzazz activists ordinarily look for in an issue. But it's worth attending to nonetheless.

For one thing, in the age of Reagan deficits, a $100 billion commitment of federal funds from existing tax sources (i.e. ordinary citizens) could effectively close off the options for a renewed, publicly funded social agenda. At $100 billion, or more, the savings and loan industry would eat any realistically conceivable Pentagon budget reductions and still be back for dinner.

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