Tuesday, January 6, 2009
Since December 2007, Washington has committed $7.2 trillion to bailing out the bad investment bets of our financial system. It’s even thrown in a few billion for the pathetically managed automobile industry. And with the incoming Obama administration, that figure is likely to hit a nice round number — $8 trillion.
To put that in perspective, $8 trillion is 57% of our $14 trillion Gross Domestic Product (GDP). But here’s the beauty part — there is no way of knowing where the money went exactly and whether it is doing any good. Much of the money was supposed to go to borrowers. But the banks refuse to disclose what they’re doing with it. If Wall Street pays itself $16 billion in bonuses this year — down 50% from the 2007 high — that money will come from us taxpayers.
Am I the only one in the U.S. who thinks it’s a mistake to use taxpayer money with no strings attached? Is our system so badly skewed that the very people who caused the economic disaster are getting multimillion dollar bonuses from taxpayers who are losing their homes, jobs, and stock portfolios?
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On January 21st, we ought to make a deal with all the recipients of the money, tell us where it was spent by the end of February or give us back the money. With $11.3 trillion in national debt and a $1 trillion Federal budget deficit, we can’t afford to waste $7.2 trillion.
If this money is doing any good for the economy in terms of economic growth or job creation, then we’ll soon discover it when we get the money back in the Treasury. What are the banks hiding? Are they doing nothing with the money? Are they paying it out in bonuses? Are they making new loans?
The worst part is the lack of political will to demand these answers.
This article was posted: Tuesday, January 6, 2009 at 12:36 pm