TARP price tag just doubled

Discussion in 'Politics' started by HazelGod, Apr 6, 2009.

  1. HazelGod

    Gold Member

    Joined:
    Dec 11, 2006
    Messages:
    7,531
    Albums:
    1
    Likes Received:
    9
    Gender:
    Male
    Location:
    The Other Side of the Pillow
    The estimated cost to US taxpayers of the TARP bailout for financial institutions has been "revised" from its original sum of $189B to $356B...nearly double the original figure.

    Understand that this is not the loan amount ($740B+) intended to free their balance sheets of "toxic" assets and restore the flow of credit...this figure is the net loss the Treasury expects John Q. Taxpayer to eat after all repayments are complete.

    But here's the big, harrowing question: Just what will we have to show for this incredible cost outlay? What is it the American public is buying? Anything?

    Bitch about military spending all you like, but at least with the comparatively cheap ($65B over 20+ years) F-22 program we get a couple hundred of the most technologically advanced warplanes ever built...plus the industry effects and jobs created in scientific R&D, design, manufacturing, logistics, and support operations. There is undeniably something of value resulting from the expenditure. TARP appears to be giving us nothing except more debt.
     
  2. B_starinvestor

    B_starinvestor New Member

    Joined:
    Mar 1, 2006
    Messages:
    4,409
    Likes Received:
    0
    Gender:
    Male
    Location:
    Midwest
    Does the CBO provide stats for where the loss attributions are assigned more specifically?

    I'm certain the foreclosure prevention initiative will be a 100% loss to taxpayers; but the rest...deteriorating market conditions, add'l AIG, BOA assistance...why is that raising the cost?
     
  3. Ethyl

    Gold Member

    Joined:
    Apr 5, 2006
    Messages:
    5,476
    Albums:
    2
    Likes Received:
    495
    Gender:
    Female
    Location:
    Philadelphia (PA, US)
    TARP is costing money for a number of reasons but one is because officials designated to give those benefits are corrupt. The people who desperately need it aren't getting it and some states are lying about the requirements needed to meet the standards so they can funnel the money through other channels and pay off other debts. See below:

    Brave New Welfare | Mother Jones
     
  4. HazelGod

    Gold Member

    Joined:
    Dec 11, 2006
    Messages:
    7,531
    Albums:
    1
    Likes Received:
    9
    Gender:
    Male
    Location:
    The Other Side of the Pillow
    Jeez, what a nightmare scenario. :no:

    Thanks for that link, C...fascinating read.
     
  5. B_Nick4444

    B_Nick4444 New Member

    Joined:
    Nov 24, 2007
    Messages:
    7,002
    Likes Received:
    12
    Gender:
    Male
    Location:
    San Antonio, TX
    deeply disturbing article

    but that's precisely what disturbs me about the Obama administration

    one can easily read into the administration's initiatives the effort and intent to keep the large institutions that have so distorted our economy and polity in place

    listen, next, to Reich, who quite candidly acquiesces to globalism and outsourcing jobs, that had they been retained in this country, would have eliminated the class of people described in the article

    if I wanted to be a simple-minded jerk, I would say that TARP, and other government interventions, are only intended to support that over-compensated class, their corporations, and globalism

    I'd say that we are helping Obama repay Pritzker and Soros

     
  6. HazelGod

    Gold Member

    Joined:
    Dec 11, 2006
    Messages:
    7,531
    Albums:
    1
    Likes Received:
    9
    Gender:
    Male
    Location:
    The Other Side of the Pillow

    I didn't intend this thread to be another platform for silly partisan dichotomies. :rolleyes:

    If I had wanted to be a simple-minded jerk, I could have reminded everyone that the TARP bailout was forced through Congress last October as a "must act now to save the economy" measure by Bush & Paulson. To lay blame at Obama's feet is just ignorant.

    The fact of the matter is that there is blame to spread all around the past and current Congresses and White Houses...but I really couldn't care less about assigning it. I'm more interested in getting people to take an informed look at just how fruitless this entire "bailout" philosophy really is. Honestly, what is the purpose in our incurring this tremendous debt? What are we the people getting for our money? Because, granted I'm no expert economist, but all I can see is us propping up a dead business model long enough to allow the key players to gather their chips and head for the exits.
     
  7. MarkLondon

    Gold Member

    Joined:
    Jun 11, 2008
    Messages:
    1,986
    Albums:
    4
    Likes Received:
    16
    Gender:
    Male
    Location:
    London, UK
    Yes. And the tragedy is it's the (relatively) left-wing parties that are attempting to prop up the failures of the right-wing parties and may well yet beggar their natural constituencies in those attempts. Instead of having a wholesale clear-out of the rubbish in the system. But I suppose "Sorry, you've bought a lie for the last 30 years" doesn't work as a vote-winner.
     
    #7 MarkLondon, Apr 6, 2009
    Last edited: Apr 6, 2009
  8. Trinity

    Trinity New Member

    Joined:
    Sep 16, 2006
    Messages:
    2,682
    Likes Received:
    0
    Gender:
    Female
    Obama requested that Bush prepare his half of Tarp so that he could begin releasing it immediately after his inauguration. The TARP Bailout direction was full steam ahead with the Obama administration. Bush is gone.

    Obama is President now. Obama is printing up unbacked money, spending and bailing out now. As Obama stated - the buck stops with him. If you truly want the American people to reexamine current Economic Policy and make different decisions...it is important to look critically at the current leader of this country aided by the majority controlled congress who are pushing this agenda. In fact, Obama is campaigning for his budget and economic agenda and forcing all of this through quickly in congress. When a negative pops up like AIG, where the American people are outraged, the Administration acts as though they had no hand in it. These type of tactics demand that we look more critically at the leaders forcing the policies. No matter how much we like the politician, love the speeches or even support the liberal agenda, its time to tell the leadership we don't like where they are leading.

    With the amount of power now bestowed in their hands, until the celebrity fest with Obama ends, people are going to fawn over and focus on personal attributes and charm of the political Rock Star and ignore the consequences of bad policy decisions...until it is too late.
     
    #8 Trinity, Apr 6, 2009
    Last edited: Apr 6, 2009
  9. HazelGod

    Gold Member

    Joined:
    Dec 11, 2006
    Messages:
    7,531
    Albums:
    1
    Likes Received:
    9
    Gender:
    Male
    Location:
    The Other Side of the Pillow

    I'm very much in agreement here.

    In fact, my belief is that the vast majority of inefficiencies and boondoggles within our government at all levels can be traced back to this common root cause: the folks calling the shots are motivated primarily by their prospects at re-election. Career politics would appear to be the worm that's rotting the core of our democracy.

    I'm sick to death of hearing from pundits and politicians alike that attempts to implement common-sense public policy would be tantamount to political suicide. The War on Drugs™ is a classic example of the insanity I refer to here...billions spent, thousands of lives lost, countless more ruined by criminal records, a corrupt enforcement culture, and an ever-increasing proliferation of drugs in society. It's as if we learned absolutely nothing from the failed experiment that was Prohibition during the '20s.

    Yet today we have President Obama responding to a public challenge to reach for the low-hanging fruit and adopt a more sensible approach to marijuana decriminalization and he responds with some nonsensical remark about that "not being what's right for America." What the fuck?

    I've read the man's autobiographical works, so I know his personal history of experimentation with illicit substances. I know he's an intelligent person who's been made aware of and actually understands the years of independent research that's been done on the subject. The only conceivable explanation for his statement is that it would be politically unpopular and damage his odds for re-election to adopt the rational approach.

    Don't get me wrong...I appreciate some of the actions he's already taken. But suffice it to say that I'm equally unhappy with some of his other positions adopted. I'm not naive enough to have expected an overnight revolution, but much of what I'm seeing reeks too much of the same old politics as usual for my tastes.

    I suppose I'm just too libertarian to be content with the way this nation is run by either of the two jackass parties.
     
    #9 HazelGod, Apr 6, 2009
    Last edited: Apr 6, 2009
  10. sargon20

    Gold Member

    Joined:
    Mar 14, 2006
    Messages:
    11,369
    Likes Received:
    2,099
    Gender:
    Male
    Location:
    Atlantis
    And what's the alternative? Let the banks fail and watch the entire house of cards come falling down? I think we saw in September what happens when the government let Lehman Brothers fail which most people agree was a mistake that triggered the disastrous collapse of the market. The concept of 'confidence' was shattered when Lehman failed. And when 'confidence' goes what exactly do you have? People pulling their money of the market, pulling money out of the banks, pulling money essentially OUT of the market. I don't think anyone wants to see an uncontrolled experiment unfold if government just lets the entire system fall apart. And it would be an experiment since no one knows when the domino's would stop falling. Already far too many dominoes have fallen and the results is the worst economy since the Great Depression. And there is still a lot of fear out there as to how this will all end. It turns out you cannot surgically excise the cancer after all and let bad banks fail and not destabilize the entire world economy. We are all connected to each other
    In a circle in a hoop that never ends :redface:



    The Consequences of Letting Lehman Brothers Fail
     
    #10 sargon20, Apr 6, 2009
    Last edited: Apr 6, 2009
  11. HazelGod

    Gold Member

    Joined:
    Dec 11, 2006
    Messages:
    7,531
    Albums:
    1
    Likes Received:
    9
    Gender:
    Male
    Location:
    The Other Side of the Pillow
    Absolutely.

    Maintain the FDIC coverage of people's deposit accounts and use those hundreds of billions of taxpayer dollars to shore up the short-term losses in individual retirement accounts of people within a certain age threshold as a result of any resultant market collapse.

    We're going to take the hit now regardless, so we might as well take it with a view toward coming out the other side with an improved set of conditions, right?

    Personally, I believe only the bullshit markets would be affected in the long term. The financial insurance and packaged instrument markets that in reality are nothing more that self-important middlemen. The real market assets and commodities would take an associative hit in the short run, but would rebound quickly. Futures contracts on tangible commodities like foodstuffs, petrochemicals, precious metals, building materials, etc. would thrive. Valuations of companies that actually produce goods and/or provide services would recover quickly, particularly if the true Keynesian model were applied and government monies actually used to create demand for their products and services...as opposed to propping up the nonsensical houses of cards as we see today.
     
  12. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    This was somewhat expected. Inevitably, about $300 billion of those toxic assets are going to be valued at 0, while the rest valued, on average, maybe 40 cents to the dollar, if we're lucky. It's going to take years for the value of these assets to rebound to the levels needed to produce enough cash to cover the costs. Homes prices aren't just going to magically rebound. If these 'loans' aren't paid back in full within the next 3 years, our currency is fucked. Just wait until we give China the middle finger and declare force majeure...shit, we're not even printing this money. It's just a click of the mouse at this point
     
  13. Penis Aficionado

    Gold Member

    Joined:
    Dec 1, 2007
    Messages:
    2,135
    Likes Received:
    18
    Gender:
    Male
    Location:
    Texas


    I'm no expert on any of this, and I'm too lazy to read any articles from Mother Jones or the Economist that might explain it to me, but ...

    1. Did Lehman Brothers trigger a "disastrous collapse of the market" or did it simply cause people to take a second look and more accurately assess the value of the myriad corporations that make up "the market"?

    2. If the latter, isn't TARP all about convincing people to re-adopt their earlier, inaccurate assessments of those values?

    3. Ultimately, isn't the stock market supposed to reflect the true value of the corporations that comprise it?

    4. If so, wouldn't it be best to just let that happen now, rather than kicking the can down the road?
     
  14. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    1. Yes, Lehman's collapse started the ball rolling, although BearStearns gave it a good nudge.

    2. TARP is about recapitalizing financial institutions, and taking their illiquid assets off the books for now so banks can focus on easing lending, and not fall into bankruptcy, which, technically, some of them were already in before TARP

    3. From a free market standpoint, yes. No one else will lend to these companies, so they turned to the last resort, the government: see General Motors, Chrysler. Their stock prices right now, however, generally reflect investors' fears of many things, including possible bankruptcy, government intervention, a recession

    4. The market has collapsed. 14,000 to 7,000 in a matter of a few months classifies as a collapse to me. The banking and financial sector almost collapsed due to mass amounts of money lost ultimately because of depreciating home prices, but then the Treasury and Fed stepped in to prevent that from happening.
     
  15. B_Nick4444

    B_Nick4444 New Member

    Joined:
    Nov 24, 2007
    Messages:
    7,002
    Likes Received:
    12
    Gender:
    Male
    Location:
    San Antonio, TX
    exactly the point I was making -- about taking a partisan perspective or approach ( I also wanted to spare any readership of my usual rant about tweedle dee and tweedle dum -- the repubs and the dems, or vice versa)

    not entirely fruitless -- that was the other point I was making

    Q: who, really, is being served by administration?

    A: ancient words of wisdom -- follow the money trail
    !


    exactly correct!

    but then again, if Obama is part of the political structure that got him elected, the decisions he makes aren't really his -- possibly ineluctably part and parcel of the process and structure he is a part of, and serves?

    the more things "change", the more they remain the same!
     
    #15 B_Nick4444, Apr 7, 2009
    Last edited: Apr 7, 2009
  16. B_Nick4444

    B_Nick4444 New Member

    Joined:
    Nov 24, 2007
    Messages:
    7,002
    Likes Received:
    12
    Gender:
    Male
    Location:
    San Antonio, TX
    nothing has "collapsed"

    boom and bust cycles are an in inevitable part of the economic cycle

    in the end, they are just periods of adjustment and re-alignment



     
  17. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    Matter of perspective I guess, a 50% dip is pretty heavy
     
  18. HazelGod

    Gold Member

    Joined:
    Dec 11, 2006
    Messages:
    7,531
    Albums:
    1
    Likes Received:
    9
    Gender:
    Male
    Location:
    The Other Side of the Pillow

    If this is true, then why are the taxpayers spending hundreds of billions of dollars for something that would "inevitably" take place on its own anyhow?

    We're back to my original question: what the fuck are we buying with all this money?
     
  19. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    $600 billions dollars worth of credit default swaps and collateralized debt obligations...how's that for an investment in our future

    ...and equity positions and treasuries, but those bare little risk compared to the above mentioned
     
  20. B_Nick4444

    B_Nick4444 New Member

    Joined:
    Nov 24, 2007
    Messages:
    7,002
    Likes Received:
    12
    Gender:
    Male
    Location:
    San Antonio, TX
    " ... The Obama administration’s role in backing the firms’ bonuses underscores its preoccupation with protecting the wealth and power of the American financial elite.

    During the AIG scandal, Obama initially declared he was “outraged” that AIG, which has received some $180 billion in government funds, was rewarding some of the very executives and traders whose risky bets on credit default swaps and other derivatives had led the company to ruin and helped bring the US and global financial system to the point of collapse. In the face of a furious counterattack by Wall Street firms and much of the media, following passage of a bill by the House of Representatives imposing a 90 percent surtax on some AIG bonuses, Obama quickly shifted gears and mounted a public campaign opposing congressional efforts to tax the bonuses.

    Fannie Mae, Freddie Mac executives to receive millions in bonuses
     
Draft saved Draft deleted