administration to slash bailout cost estimate/wants to use funds for job creation

[Peacetrain]

http://news.yahoo.com/s/ap/20091207/ap_on_bi_ge/us_bailout_costs
AP



By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer – 1 hr 19 mins ago

WASHINGTON – The Obama administration will lose $200 billion less than expected from the federal bailout program and is looking at using part of the savings to fund new job creation efforts.

A Treasury official said Sunday that the administration now believes the cost of the financial rescue program will be at least $200 billion below the $341 billion estimate it made in August.

The official, who spoke on condition of anonymity because the administration's new projection has not been released, said the lower estimate reflected faster repayments by big banks and less spending on some of the rescue programs as the financial sector recovered from its free fall more quickly than the administration originally expected.

[Clio the Leo]

1. and "TARP repayments narrowing deficit"

;)

http://www.politico.com/politico44/perm/1209/mission_accomplished_f8f7c8f1-705c-4728-a38a-44c5248c8737.html

[Peacetrain]

3. That is going to put a piece of coal in some republicans stockings

:hi:

[Clio the Leo]

9. Oh but if a tree begins to grow in a forest.....

..... will the press report on it? :)

[NJmaverick]

2. Things seem to be heading in the right direction. We are getting more and more good news

:applause:

[Peacetrain]

4. I know, the momentum forward is starting to pick up

:thumbsup:

[AllentownJake]

5. Anonymous source.

LOL, amazing when it might be good news, acceptable. When it is something bad...ANONYMOUS SOURCE@@#$@#%$@%^#$%#

[Peacetrain]

6. Politico called it aTreasury Official.. so someone is talking to more than one news source

[AllentownJake]

11. SPIN SPIN SPIN

:rofl:

They say where the source comes from when you guys scream it.

[Peacetrain]

14. Huh?

"you guys"?

[AllentownJake]

17. There are a group of people

who when they see the word "The official, who spoke on condition of anonymity" go crazy.

[Peacetrain]

20. Allentown, no one is being unscrupulously attacked by innuendo here..

This is an economic status report.. I do have issues with people on any side being attacked by unsubstantiated anon sources, that will never have an outcome..

[AllentownJake]

22. In many cases the outcome was quite clear

Afghan troop escalation for example.

[Peacetrain]

23. So you are fighting another issue in this thread.. I see.

Maybe you should take that up with that person?

[AllentownJake]

24. I expect sunshine and rainbows till 12/26

I'm waiting till 1/2/10 to see what reality is.

[Craftsman]

28. I agree with you things are bad and are not getting better

Heck even Walmart is starting to lay off. I know for a fact 3 Walmarts ahve let people go in Novemberm cut hours, not hired seasonal help, and are promising other lay offs in January. Things are not getting better.

[Peacetrain]

31. I don't get it,, I just don't get it.. why is an article about money possibly going for job

creation, anything but good for all of us. I give up

EDIT: we are not fighting some philosophical stance of where the democratic party is now or headed.. Pick you battles, you know what I mean..

[AllentownJake]

37. TARP repayment

If a bank pays back their TARP so they can pay their Christmas bonuses, due to the nature of banking there will be less money to lend.

I honestly find it mystifing that people are celebrating TARP repayment and complaining about bank lending levels at the same time.

[Clio the Leo]

7. "ahead of a report to Congress on Monday"

Patience grasshopper, patience....

U.S. Forecasts Smaller Loss From Bailout of Banks

By JACKIE CALMES
Published: December 6, 2009
WASHINGTON — The Treasury Department expects to recover all but $42 billion of the $370 billion it has lent to ailing companies since the financial crisis began last year, with the portion lent to banks actually showing a slight profit, according to a new Treasury report.

The new assessment of the $700 billion bailout program, provided by two Treasury officials on Sunday ahead of a report to Congress on Monday, is vastly improved from the Obama administration’s estimates last summer of $341 billion in potential losses from the Troubled Asset Relief Program. That figure anticipated more financial troubles requiring intervention.

The officials said the government could ultimately lose $100 billion more from the bailout program in new loans to banks, aid to troubled homeowners and credit to small businesses.

Still, the new estimates would lower the administration’s deficit forecast for this fiscal year, which began in October, to about $1.3 trillion, from $1.5 trillion.

The reason for the anon. source is because Congress is not fond of being scooped by the NY Times. ;)

[AllentownJake]

13. Well they just were nt.

[NJmaverick]

8. Will you post a public apology if this report is confirmed as correct?

[AllentownJake]

12. Sure if everytime someone screams anonymous source on here

for other linked news articles will do the same.

I'm pointing out a hypocrisy. People seem to be fine with a source that remains in anomonimity if the source supports their world view.

[NJmaverick]

16. The report does not seem far fetched, so why the major issue

with the source wishing to remain anonymous? Why do you believe this report to be false? From what I have been hearing about the TARP program this announcement was pretty much expected.

[AllentownJake]

19. That isn't the point

The attack on articles that use "The official, who spoke on condition of anonymity" is a tactic been employed over the past few months, can't say one is acceptable and another is not.

[NJmaverick]

25. Yes it is the point. It's the only of the issue that one would consider important

anonymity is ONLY an issue when you doubt the claims

[AllentownJake]

27. I doubt the entire premise of the article

However, I will concede, that a report on this premise will be issued.

[NJmaverick]

30. I appreciate that you are willing to concede the point

what do you feel the "entire premise" of the article is? Why do you doubt it?

[AllentownJake]

34. If the administration is upset that banks aren't lending

TARP repayment seems silly.

[NJmaverick]

38. Why do you say the administration is still upset with bank lending levels?

[AllentownJake]

39. Because Tim Geithner says so

Last time I checked...he was in the administration.

http://online.wsj.com/article/SB10001424052748704204304574544134175446054.html?mod=googlenews_wsj

Unless in 20 days he is now pleased.

[NJmaverick]

40. Ok that certainly supports your assertion about bank's lending practices

so I guess the question becomes how do you prevent them from repaying the money?

[AllentownJake]

41. They are repaying the money

because the executives want their bonuses which have been restricted under TARP. We are essentially playing chicken waiting to see who blinks first.

[NJmaverick]

42. How do you stop it though

It's not a question of motives, it is one of is there a way to even stop it. If there is no way to stop it, is it really worth focusing on? Perhaps the idea of taking those repayments and using it to pump up the economy is a pretty good one.

[AllentownJake]

44. Depends on what you mean by pumping up the economy

There are 3 ways to create wealth

1) Grow it
2) Mine it
3) Take the first two and manufacture it into another product.

If they plan on providing money for business that does the above..very happy.

The government can encourage economic activity
1) Improving transportation infrastructure
2) Education

If the government intends to direct funds into those activities I'm for it.

If they plan on saving some civil service positions in states that are failing, I'm not against it, but I doubt the economic activity will have any long term impact passed the last check issued by the government.

As far as the banks are concerned, we will regret not nationalizing them and breaking them up for generations.

[NJmaverick]

46. OK so this is why you doubt "the entire premise of the article"

yet the current evidence suggest the money will be used for:

<<Among the ideas expected in his economic speech Tuesday is an expanded program that gives people cash incentives to fix up their homes with energy-saving materials, senior administration officials have told The Associated Press. Obama is leaning toward new incentives for small businesses that hire new workers and new spending on roads, bridges and other public works, the officials said.
The president also is open to a federal infusion of money to cash-strapped state and local governments, considered among the quickest and most effective — though expensive — ways to stem layoffs.>>

http://news.yahoo.com/s/ap/20091205/ap_on_bi_ge/us_obama_economy

[AllentownJake]

47. Yes I do call nonsense to that premise

Fixing existing infrastructure is not going to "create" any jobs.

The State's have to balance their budgets. That means cuts or increased taxation.

If you want to build commuter rail systems, I'm fine with that public transportation systems provide the most bang for your buck.

Take a look at what China is using their stimulus spending projects for, and you will get a good inkling at what a nation that is planning for growth in their middle class is up to.

[NJmaverick]

48. It didn't say fixing existing infrastructure, so where are you getting that from?

You also seemed to have missed the incentives for small business.

[AllentownJake]

49. They are building new roads and bridges?

new spending on roads, bridges and other public works

I'll wait to see the small business plans they have.

[mkultra]

29. your point is that Obama is a liar

and many people arent buy. Doubt in MSM is based on trust. We doubted much of the news during the Bush administration because many of us felt he was a liar. Just as many of us do NOT feel that Obama is a liar so we doubt the Obama smear until it is proven. The fact on this story is that the administration has publicly said they are thinking of using leftover tarp for jobs creation.

[HamdenRice]

26. You don't even need a source, anonymous or not, if you understand the story

As reported on the front page of the NY Times. Heck, just go to ProPublica's bailout tracker.

The story is based on the very conservative budgeting that went into TARP. The assumption was that all of the money, despite being invested, could be lost of the banks collapsed, so it was booked as an expenditure or cost.

Each time a bank pays back TARP money, the "cost" of TARP decreases.

In other words, the assumption in budgeting was that all TARP money would be lost -- which was very honest to do at the time.

According to the Times, the TARP's bank investment portfolio will make a profit.

All the losses are from the use of TARP funds for GM, Chrysler and AIG.

[AllentownJake]

33. AIG was not part of TARP

I understand TARP, and I also laugh at people who criticize banks for not lending than celebrate TARP repayment.

[HamdenRice]

35. That's what I thought, but the Times is reporting differently this morning

I think they may have confused it with CIT. On the other hand, ProPublica also lists AIG as part of TARP.

So I think the jury is out on that issue.

[AllentownJake]

36. AIG was bailed out in September of 2008

TARP was in October, there is no jury on this.

[HamdenRice]

43. Unless they went back to the well nt

[AllentownJake]

45. Well the intial 85 billion

Geithner was in charge of, anything after that, Geithner was probably in charge of as well.

[Jackpine Radical]

10. This could be a wonderful turnaround for the economy. I hope

they find a way to use the money to create a green infrastructure for us. We really need a national development plan to implement high-speed and light rail, a fiber optic system for modern internet and other communication networks, etc. Japan & Europe built themselves a new industrial base out of the rubble of WWII, and it put them ahead of us. Now China & other Asians are building new economic bases. Time for us to get back in the game.

This is a great crisis point for us. My I Ching informs me that the Chinese character for "crisis" is composed of the characters for "danger" and "opportunity."

[msongs]

15. lol = losing 200 billion is good, war is peace, the happy news keeps on coming nt

[HamdenRice]

32. Where does it say "losing 200 billion"? It says exactly the opposite

By reducing the cost by $200 billion it's saying that's another $200 billion that the program is now guaranteed not to have lost.

[Clio the Leo]

18. And these two items are no-doubt related to one another....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x42535

[Peacetrain]

21. Ahhhh good news Clio

I am sure the hell hounds are on the right are starting to screw themselves into the ground, you can count on that.

Had a talk with a small buisness person last week.. ( I thought about opening a fabric shop earlier in the year) .. and they are saying on the qt that if health care reform goes through they think small buisness will pick up hires..