President Obama has advocated reallocating TARP money which has been returned by various banks to instead be spent on jobless programs. The President has advocated that Congress should change the TARP law to allow for this use.
I strongly disagree with the President - not because jobless benefits aren't needed, but rather because his first responsibility is to maintain faith with the people of this country. TARP (or Troubled Asset Relief Program) dollars were designed to keep teetering banks afloat by relieving them of their so-called toxic assets - assets like Credit Default Swaps and other forms of real estate Derivatives. Presidents Bush and Obama both assured us it was necessary to avoid economic calamity. Considering how manifestly juxtaposed both men were politically, when two people of such disparate views advocate the same thing, I tend to think they are putting aside political strife and that it probably was true, we needed to act.
That said, if banks which took money now say they no longer need it, and are returning it to relieve themselves of oversight or limitations on pay or for whatever reason, then the money should simply go back into the general funds and be used to limit/reduce the debt for this fiscal year NOT be redirected at the whim of the President and Congress. One of the key distinguishers *supposedly* between Bush - who would call up down - such as saying we were bringing about regime change in Iraq if Iraq changed it's mind about WMD inspections - and Obama, was that Obama promised to NOT pass bills in the middle of the night, not try to sneak things (like say, yellow-cake in Niger) by us. This looks like the same old games, and it's wrong.
The proper way to pass a law is to do just that, propose the law for it's intended purpose, argue it, vote on it, and if it's passed, sign it. If we need another $300B in jobless benefits, then promote that, gain public approval, be transparent, and move forward. Do not burden the public with more debt without their explicit and direct consent as represented by their representatives arguing the point on the floor of Congress on its own merits and then agreeing to fund it. That's how it is properly and fairly done, and no other way.
I agree with you in principle, but at the same time if the money has already been labeled as "spent" rather than "loaned" by the Republicans, why not spend whatever comes back? [I'd hate to make liars of them.]
ReplyDeleteThe whole philosophy behind Obama's spending is that we need to invest in American business now in order to boost the economy so that we can start generating the type of revenue needed to eventually resolve the deficit.
This an aggressive tactic (and not very popular because of the risks) but it needs to be followed through. Laying off the pedal before the economy shows real signs of recovery would be a mistake.
Thank you for your comment AB, and on behalf of my colleagues, Pen and ToE, and myself, I'd like to welcome you to Penigma.
ReplyDeleteI hope you find the writing, both the original posts and comments, interesting and challenging.
Apathyboy,
ReplyDeleteFirst, thanks for the comments, please feel free to comment often.
Second, I agree that Obama's philosophy is to try to boost American business spending, I just don't happen to think the government has all that much impact, either due to taxation, or spending.
The best we can hope for is that the government can soften the impact of three decades of ignoring the infrastructure and ignoring the plight of wages/benefits of American workers as they have steadily dwindled, all while the wealthiest Americans have amassed massive sums.
Hopefully Obama's attempts to forestall Depression have worked, even if only temporarily, but unless and until we do something to begin growing the American wage base, we have no hope of paying off our deficits, no hope of paying for Medicare and no hope of a brighter future. The government is, after all, only a tool - it works as the powerful direct it, for the moment, it seems to be working to try to redress some inequities (slightly), but in 5 or 10 years, that pendulum will again swing, and if we've not adopted an ethic that recognizes all of us suffer when some of us suffer, we will face a bleak future indeed.
ok let's try that again..
ReplyDelete