AllentownJake
(1000+ posts)
Send PM |
Profile |
Ignore
|
Thu Jan-07-10 07:41 AM
Original message |
|
Originally, when the 3 page TARP bill was passed after serious protestations of the Citizens of the United States, it was supposed to be used to purchase troubled assets. The name of the bill is the Trouble Assets Relief Program.
Henry Paulson was lazy and didn't want to do any of the purchasing/valuation thing so he used if for re-capitalization that would be paid back. They used a variety of instruments from preferred stock to debt in this effort.
The Obama administration re-interpreted tax rules this year for the big banks so that their tax liability would be less and the banks paid the TARP back with their tax breaks. Essentially we forgave the debt. They got a 300 billion dollar donation.
Back to that TARP thing. Right now the FED is buying Mortgage Backed Securities from the big banks. These were the Troubled Assets from the relief plan. In addition the government has blown a lot paying for losses in Fannie and Freddie and looks like is planning to pay another 200 billion this year.
The big banks aren't doing much lending, even by the administration's admission, they'd like to see more capital flows from them.
So if we would have just done the TARP thing with the original money, would Too Big to Fail even be an issue. They aren't lending and they could have been orderly made smaller (hell you wouldn't even have to nationalize the market would have done it for you).
Just a thought I had today.
|
TexasObserver
(1000+ posts)
Send PM |
Profile |
Ignore
|
Thu Jan-07-10 07:56 AM
Response to Original message |
1. TARP was a massive boondoggle and remains so. |
|
TARP was a power play at end of the Bush administration to fund big banks with free money at taxpayer's expense. It was the world's biggest bank robbery, but the robbery was perpetrated by the banks.
The "crisis" in lending in the fall of 2008 was partially contrived, as evidenced by the FED's actions when the TARP bill didn't pass initially. Suddenly, the FED infused the banking system with about $700 billion on its own. And they still did the TARP passage and funding.
TARP was designed to do one thing: save big banks from their own bad economic practices. It was the worst kind of corporate welfare, and we didn't even make them track their spending with such funds. These same lenders would try to put you in prison for mishandling and misappropriating their money in a similar fashion.
|
AllentownJake
(1000+ posts)
Send PM |
Profile |
Ignore
|
Thu Jan-07-10 07:58 AM
Response to Reply #1 |
2. That is my stance as well |
|
My biggest anger with this administration is they drove the get away car.
|
notesdev
(1000+ posts)
Send PM |
Profile |
Ignore
|
Thu Jan-07-10 08:16 AM
Response to Original message |
|
At the time Congress passed TARP, Paulson already had other plans for the money, of which he did not tell Congress.
He's a perjurer at the minimum (and IMO a full-blown traitor).
Now, TARP is just a permanent slush fund where the Treasury can dole out cash to their favored interests without the inconvenience of a vote of Congress. It's effectively a coup d'etat.
|
TexasObserver
(1000+ posts)
Send PM |
Profile |
Ignore
|
Fri Jan-08-10 10:28 AM
Response to Reply #3 |
4. TARP is a permanent slush fund. Well said. |
|
I still can't believe they give out billions like that, and still send people to prison for stealing lesser amounts.
|
DU
AdBot (1000+ posts) |
Fri Apr 26th 2024, 10:57 AM
Response to Original message |