Reagan's "elimination of loopholes" in the
tax code included the elimination of the "passive loss" provisions that subsidized rental housing. Because this was removed retroactively, it bankrupted many real estate developments which used this tax break as a premise, which in turn bankrupted 747 Savings and Loans, many of whom were operating more or less as banks, thus requiring the
Federal Deposit Insurance Corporation to cover their debts and losses with tax payer money. This with some other "deregulation" policies, ultimately led to the largest political and financial scandal in U.S. history to that date, the
savings and loan crisis. The ultimate cost of the crisis is estimated to have totaled around $150 billion, about $125 billion of which was directly subsidized by the U.S. government, which further increased the large
budget deficits of the early 1990s. See
Keating Five.