Repaying TARP and the Myth Behind 'Taxpayer' Money

I'm still tired of hearing our elected officials call it 'taxpayer' money.

We all know very well that once that money is taken from our paychecks, or from our pockets, that the money is no longer ours, it's theirs - the government's.

They never called it taxpayer money before (They = our elected officials).

It was only when they irresponsibly started dishing out big bucks to irresponsible corporations that they decided it was a good idea to start calling it taxpayer money in order to get the taxpayer on their side.

This way, the taxpayer, really feels ownership of the money and directs their furor at the corporations who received the money, not the irresponsible bigwigs in Washington that use it to line their pockets and their districts as a matter of routine.

Now, ten of the nation's biggest banks have just announced that they have been given 'permission' to repay the TARP money (doesn't that sound ridiculous in itself?) that the government, uh, taxpayer, loaned them last year. Among the big banks given the green light to start repaying their debt are JPMorgan Chase & Co. (JPM), American Express Co. (AXP), Goldman Sachs Group Inc. (GS), U.S. Bancorp (USB), Capital One Financial Corp. (COF), Bank of New York Mellon Corp. (BK), State Street Corp. (STT) and BB&T Corp. (BBT).

It was a hard lesson to learn, but the above-mentioned have realized, hopefully, that doing business with the government comes with more strings attached than doing business with Don Corleone.

Personally, I'd rather see the money remain with the banks. Sure they screwed up in a big way and needed a bailout to survive, but at least they have a business plan designed to realize profits.

The federal government has no idea what that means, nor do they care to try.

If Social Security, Medicaid and the VA are the best that the government can do at running a business, then I'll take my chances with leaving the 'taxpayer's money' in the private sector - where the goal of turning profits and rewarding shareholders is the name of the game.

The private sector may have ridiculous expense accounts and enjoy living large (the fruits of hard work), but at least they work to make money in the meantime. In comparison, our elected officials have ridiculous expense accounts and enjoy living large while running record deficits.

Do you ever hear it called taxpayer money when its Washington's elected elite wasting it on lavish parties and not Citibank (C)?

If a private business went so long without giving investors a return-on-profit, especially without having a business plan geared towards profitability, then that business would lose the faith of its creditors and shareholders before ultimately winding up bankrupt.

In government the business plan is to realize deficits, not recognize profits, and then to spin the media coverage to their liking before the media reaches out to the American people and tells them what to think.

Now we are supposed to trust the government to not only fix a broken economy, but to also micromanage the most successful private sector in the world to the point where the White House wants to dictate salaries.

Maybe in Venezuela, but in America? I don't think so.

"We need to protect the taxpayer's money!" our elected officials declare.

Talk about misleading America.

Comments

[greedcanbgood:]

VERY well put...enough said! =)

Jun 10 08:47 AM

[DM32:]

Bulls eye -- you could also add Fannie and Freddie to the list of government run basket cases.

Jun 10 09:07 AM

[Mad Hedge F...:]

Well said. The world’s largest hedge fund is taking profits on one of its biggest positions. I’m talking about the US Treasury allowing ten banks to repay $83 billion in TARP money. I guess the banks really want to get the government green eye shades out of their board rooms, who have been surreptitiously swiping the soap out of the executive washroom. This means paying back 5% money when it costs 6% to fund in the markets, and 10% of you want to raise equity. I guess it’s worth it if this enables you to revive your celebrity golf tournaments in California for “clients,” throw Caribbean parties for your top producers, and get the Gulfstream out of storage after it couldn’t be sold. Could bonus compensation also be an issue? Gee, do you think? I have to begrudgingly give the government credit for making a ton of money on this trade. Not only did they borrow from us at zero and lend at 5% in huge size. They also got, at the point of a shotgun, fistfuls of equity warrants that have tripled. And they did stop the bank runs that took Morgan Stanley (MS) down to a near death experience of $6, boosting it back up to a positively virile $32. Alas, if only I could play by their rules. I have a question, Mr. Geithner. Does the government have to pay taxes on those profits? Will it report them?

Jun 10 10:26 AM

[Bill-LV:]

Right on. Publish those that voted for TARP, for the bailout, and vote against any that did!

Jun 11 12:34 PM

[molly moderate:]

I don't think the experts know exactly how to get us out of the financial mess, and I'm sure most regular people don't. I know the government isn't very good at managing money and programs, but obviously these financial institutions aren't either-- they should have been monitoring themselves so they wouldn't go bust and take others with them, but they weren't. I think if there hadn't been TARP or other rescue funds, some of these institutions wouldn't exist now. Maybe that would be for the best, but I don't think we should be forgetting why the taxpayer money was needed.
(Why on earth would the government tax the profits from the bailout. That doesn't make sense. ) Some people are just bitter about government--too bad there's a profit and not a loss from these loans so far. That's what it takes to make some people jubilant-- more government failure.

Jun 18 12:35 PM

[akapital:]

um, yes, they have always called it taxpayers money, this is just one of the few times that they called Corporate Welfare taxpayers money...but "they" (as if they are always the same people) called it taxpayers money when used for war, for free choice, for food stamps, for unemployment, for police, for firemen, for teachers, for postage...the list goes on...we hear it all the time when "they" complain about this or that...

Jun 29 04:12 PM