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Watch VideoSprings residents recall economic trouble of the 80's
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Source: KOAA
The government is proposing a new type of Resolution Trust Corporation to take on bad debt, and sell it later at a profit to taxpayers. It's a concept that southern Colorado residents are familiar with. Colorado Springs was one of the epicenters of the savings and loan crisis in the 80's.
Certified public accountant Marvin Strait says the Resolution Trust Corporation was notorious for turning down a good offer for property then selling the same piece later a lower price. But he believes it achieved its purpose. "Here we are now, post-RTC, and the many properties are now prospering," said Strait. "The value has come back several times in many cases."
Banker John Jackson recalls the RTC as an expensive fix. The RTC bought $225 billion worth of bad debt and sold $140 billion worth. That left taxpayers with an $85 billion loss. Jackson believes today's crisis could be more costly. "Mistakes will be made," said Jackson. "We just have to hope that they're not deadly to our economy."
