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Years of sky-high profits and billions of dollars in bonuses may finally be catching up to Goldman Sachs. The Securities and Exchange Commission today is filing suit against Goldman Sachs and one of its vice presidents, 31-year-old Fabrice Tourre. It's alleging that the Goldman executive secretly created loans in coordination with hedge fund John Paulson & Co., all the while knowing that the true value and quality of those loans were not nearly as good as Goldman was claiming to their customers.

Goldman then sold those bad loans and shortly thereafter made bets, with AIG, that those loans would fail and cashed in when they did. The taxpayer, of course, made good on all of AIG's obligations.

Put simply, here's how the SEC claims it all went down: Imagine you are the biggest car company in the country. Goldman in this example, and a client, Paulson, comes to you and asks you to design a car that will crash.

So you make that bad car "CDO," then sell it to people without telling them you cut the brake lines! Then when the car "CDO" hits a wall, you rake in the dough from the insurance you bought on the bad car before the crash. And you get paid twice! Once when you sell the car, and then again when it crashes and cash in your insurance policy!

Of course in Goldman's case, they bought the insurance from AIG, which didn't have the cash to back up its bets. Hence, thanks to the $180 billion taxpayer rescue, those bets paid Goldman Sachs back at 100-cents on the dollar.

Goldman is the poster child for a practice they were very good at — selling bonds. But the case here is that they may have been deliberately creating and then selling bad bonds, and sticking the consequences to customers like teacher and police pension funds.

And that will be the legacy of the bubble that burst — a cascade of underwater mortgages and broken pensions, a bankrupt nation and a massive wealth transfer to bank scammers. Reaction is pouring in from people who have been calling this a scam from the start.

Former New York Gov. Eliot Spitzer, the so-called sheriff of Wall Street, says this is a perfect example of why the big banks need to be broken up because when you have banks playing so many sides and betting against their own clients, this is bound to happen.

The suit against Goldman may just be the tip of the iceberg in what will hopefully become a wide-ranging probe that stretches beyond failure to disclose to include the corruption that helped to build the bad cars in the first place.

This boils down to some simple questions.

Are we a country that is okay with deliberately designing faulty cars and betting that they will crash? 

Are we a country that is okay with deliberately creating and selling faulty loans and then betting that they will collapse, leaving taxpayers, pensioners and homeowners on the hook and the banksters with all the money? 

Will either political party be willing to give up the money train of bank political donations and do the right thing? 

So far from a government that is sworn to protect and serve us, we have seen only poorly instituted excuses and a half-dozen half-measures.