RIP Logic and Intelligence

Some people don't realize that TARP was done by Bush and that the money is being repaid. The news media insists on calling it a "bailout" which is misleading. (Intentional?)

People are mad because the market should take care of itself. The government should not be lending money out at all, under Bush or Obama. Yes, the bailout saved some jobs, but at what price? Citi was not the only bank bailed out. Trillions have been lent to many banks, and where does this money come from?

The money isn't real, which means inflation eventually, if not sooner, then later. The point is, inevitably it will hit us. In a capitalist society (which I'm not sure we have been in the past 100 years) companies are allowed to fail. Yes, people may lose jobs, but people still need banks and one, or many would rise up to replace it.

Yes TARP was a Bush initiative, although Obama voted for it while still a Senator.

The latest estimate is that TARP will lose $25 billion before all is said and done. In other words, when the government says it will make money on TARP it IS lying.

Finally, the government likes to say that the "taxpayers" are repaid, but they're not. None of the money being repaid is being used to pay down the debt or issue refunds to taxpayers, it's being spent. When private citizens do this it's called "money laundering" and is a felony.

Conservatives are angry because they know they were lied to and are being ripped off.

Yep, the ignorance is already beginning to show on this wall with the two posts above me. I was just about to post this story when I saw you already had. I'm pretty sure that if there is an overall loss from TARP it will be a result of the auto bailout, just because GM's stock price would have to get to about $52, but the banks have all paid back by now. Don't quote me on that though, non-hysterical information in the media has been scarce. TARP has created inflation, but only indirectly and only the kind that we need. It won't create any more because the program is closed and the fear that prices will begin to fall again is still very real and very serious, much more than they will rise uncontrollably.

Blowing.Rock Master wrote:

The latest estimate is that TARP will lose $25 billion before all is said and done. In other words, when the government says it will make money on TARP it IS lying.

Could you please provide a link to an unbiased report to back up your claim? Thanks!

I don't have to, it's in the OP's link. The number comes from the Congressional Budget Office.

TCB wrote:

Yep, the ignorance is already beginning to show on this wall with the two posts above me.

So which part of my post is ignorant?

I invested $1,000 is stock A. Stock A is now worth $1,500 dollars. I made a great investment and am a great investor!

What? Stock B. Never mind that the $1,000 I put into that is now worth $150. Look at Stock A! I'm a good investor!

If you mean the $25 billion estimate from the CBO, that was in the article linked by the OP. If you mean the government saying "it will make money on TARP" I'm not sure you'll find that being said without qualification. You will find specific cases, as for CitiCorp, that there was a net profit.

During the period when TARP was starting there was a great deal of debate about how the bailouts should be structured, particularly whether they should take the form of direct loans or whether the government would get an interest in the company as a stockholder. If you accept that TARP was going happen and can get past the "socialist government takeover" hyperbole, having some interest in the companies has worked out to the benefit of the government's balance sheet over the alternative of direct loans.

$25 billion is less than .2% of GDP. It's certainly more money than I have in my wallet, but I probably wouldn't have ANY money in my wallet had the bailout not happened. I think it was a fairly good deal considering it cost a fraction of what it cost to fix the Savings and Loan crisis, which GHW Bush put up $125 billion at the cost to the tax payers (and in nominal prices too). TARP saved the economy from total collapse (yes, we would have had bank runs, hoarding, failures of many Dow 30 companies, etc). You won't get a check in the mail from Citibank, but I don't think anyone was ever led to believe they would. And go ask the Republicans in Congress why we aren't using the funds to pay down the deficit. They're ones who are helping push an $800 billion tax cut today.

Blowing.Rock Master wrote:

The latest estimate is that TARP will lose $25 billion before all is said and done. In other words, when the government says it will make money on TARP it IS lying.

Put up wrote:

Could you please provide a link to an unbiased report to back up your claim? Thanks!

Blowing.Rock Master wrote:

I don't have to, it's in the OP's link. The number comes from the Congressional Budget Office.

I didn't see anything in there about the gov't saying it will make money on TARP.

Saying the economy would have collapsed is an opinion for which there isn't any factual basis. Most banks wouldn't have collapsed including many which took TARP funds. My bank didn't take any and it's doing great.

The banks that got TARP funds continued to struggle until "mark to market" accounting rules were modified in April 2009. When that happened the banks were suddenly awash in cash because they didn't have to artificially write down assets that trade in illiquid markets. Once the rules were changed the banks were falling all over themselves to repay TARP funds.

Who cares if the Savings & Loan bailout cost more. Just because that ripoff of the taxpayers cost more than this ripoff doesn't mean this is a "good" ripoff.

Last night's tax deal isn't a "cut". Nobody's taxes are going down (excluding the 2% SS portion). When taxes don't go up, it's not a cut. This also has nothing to do with what is happening to repaid TARP funds.

Blowing.Rock Master wrote:

Last night's tax deal isn't a "cut". Nobody's taxes are going down (excluding the 2% SS portion). When taxes don't go up, it's not a cut.

It's an extension of a cut that was set to expire at the end of the month. So it's a cut.

Direct quote from the article:

"The latest estimate from the Congressional Budget Office in late November was that the $700 billion Troubled Asset Relief Program would end up costing the government $25 billion, down from an August CBO estimate of $66 billion."

People just don't understand the vast majority of things that happen. But they still live to complain or fight about them.

I'm not sure what your point is. Current estimate is that the net cost of TARP is $25B versus an August estimate of $66B loss.

http://cboblog.cbo.gov/?p=1647

oh no you dint wrote:

It's an extension of a cut that was set to expire at the end of the month. So it's a cut.

Are you really so wedded to liberal dogma that you consider it a tax cut when you pay the same amount? If your employer pays you the same next year as this year does it mean you got a "raise" because your pay didn't go down?

Fishing Instructor wrote:

I'm not sure what your point is. Current estimate is that the net cost of TARP is $25B versus an August estimate of $66B loss.

http://cboblog.cbo.gov/?p=1647

I guess that makes us even because I couldn't figure out what your first post was about.

By the way, I already pointed that out. Whoopee, the government is only wasting $25 billion instead of $66 billion. Let's have a party!

Ok I'll give you a tiny number of examples of programs that have cost more than TARP:

F-22 Raptor- $65 billion bailout to Lockheed Martin

V-22 Osprey- $27 billion bailout to Bell/Boeing

Farm bill- $20 billion/year bailout to Monsanto et al.

Medicare Part D- $50 billion/year bailout to Pfitzer et al.

The government hands out money to companies that don't deserve it all the time, but this is one case where it actually did more good than harm and can actually be considered a program that succeeded in its goals.

There is little doubt among mainstream economists that the economy was saved by TARP. The bill was passed in Oct 2008. There is no way that many banks could have lasted until Apr 2009 without that money, and the talk then was that changing the accounting rules would not be nearly enough to prevent a collapse. If AIG, Citi, Morgan Stanley, Merrill Lynch, JP Morgan Chase, and Wells Fargo had all gone belly up (which they probably would have done within days of TARP had it not been passed) there would have been widespread runs on banks across America, which would have led to a depression far greater than the one in the 30s.