Sunday, January 17, 2010

just when it could not get any more bizarre

This is a quote from the president on his radio address on 1/16/2010. (I had to listen to it 4 times to make sure I heard it correctly, then I went to the president's web site to read the transcript.) He was talking about the people who are opposed to the imposition of new fees on banks and other financial institutions who took TARP money last year.

"Those who oppose this fee have also had the audacity to suggest that it is somehow unfair. That because these firms have already returned what they borrowed directly, their obligation is fulfilled. But this willfully ignores the fact that the entire industry benefited not only from the bailout, but from the assistance extended to AIG and homeowners, and from the many unprecedented emergency actions taken by the Federal Reserve, the FDIC, and others to prevent a financial collapse. And it ignores a far greater unfairness: sticking the American taxpayer with the bill."

So because these firms took TARP money, just paying the money back is not enough. Never mind that the Government forced some of these banks to take the money without actually needing it. Remember, some were forced to take it so that the banks that actually needed the money would have a better chance of repaying it.

The theory here is that people would be less willing to do business with a bank that had the need for a bailout rather than one that did not need it.

Several banks have paid the money back; they fulfilled their responsibility. Now the government is saying that it is not enough. Rather than letting capitalism do its job, the government stepped in and in the process and they saved the people who made bad decisions and are punishing those who made good ones. But the line that talks about the entire industry benefiting is even more ominous. Everybody benefits from saving the financial sector. Who will be next??

Look at this another way. Many people in the military received government back loans for their house through the VA loan program. Most pay off their mortgages just fine. However, there are those who do not and default. Now the Government is on the hook for a certain portion of that money. So since some have defaulted, anyone who has ever taken money and bought a home for this problem will now get taxed on the money they received, even if they have paid that loan completely off.

Does that sound right? I didn't think so.

Get off the "those rich folks" bandwagon and start looking at what is being done in your name.