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Some items to keep in mind: 1. War on Terror and TARP are large portion of the current USA deficit, probably 80% or higher. 2. Over-issuance of AAA ratings wi
by shareme 15y ago
Some items to keep in mind:
1. War on Terror and TARP are large portion of the current USA deficit, probably 80% or higher.
2. Over-issuance of AAA ratings will come back to bite as it has to be rolled-over at some point.
3. TARP spending direct result of not controlling the security class known as derivatives ...precedent last time we had to assert Federal control to correct market excesses in securities as 1929-1930 with the SEC act. IN other words we could force security exchanges to outlaw derivatives to bring order/stability back but anyone receiving bank lobby money will not broach that subject.
- kai-zer 15y agoFalse... TARP is expect to cost the taxpayers, $25 billion. A small price to pay to avert total financial ruin. http://cbo.gov/doc.cfm?index=11980&zzz=41404 http://cbo.gov/doc.cfm?index=11980&zzz=41404
- anonymoushn 15y agoIf you give me a loan, then as it expires I take out a new loan to pay you back, would you say that you've made money from the arrangement? I would say that you haven't, as if I default the second loan you still take a net loss across all our transactions. However in the case of TARP, many TARP loans were rolled over into non-TARP loans, without the principal being returned at all. We could also discuss whether it is a good idea to subsidize the losses of some parts of the financial and automotive industries but not others, whether this is really conducive to a healthy economy based on competition, and whether the incentive structure created by handing bags of stolen money to anyone who can credibly threaten to damage the economy is a good one, but this probably isn't the place to do it.
- deleted 15y ago[deleted]
- Andrew_Quentin 15y agoThat is quite curious because we never had any deficit reduction debate before 2007 or any talk about government having too much debt yet now we all the sudden do. I think if there was a graph of government debt it would show a big spike around 2008.