http://www.nytimes.com/2010/06/23/business/23tarp.html?partner=rss&emc=rss

Quote :

"The Treasury secretary, Timothy F. Geithner, said on Tuesday that taxpayers were recovering their investment from the financial bailouts as the program was wound down. But he acknowledged there would probably be a loss from the rescue of the insurer American International Group. Mr. Geithner told a watchdog panel that banks had repaid about 75 percent of the bailout money they received, and the government’s investments in those banks had brought taxpayers $21 billion."

The AIG part is crap, yes. That said, we should be happy that (1) the financial system didn't collapse, and (2) the government actually MADE MONEY from the bailout funds. Your tax dollars weren't wasted, Mr. Taxpayer.

6/27/2010 2:35:46 PM

And Goldman Sachs made record profits this year.

They should be at 110% of the bailout costs IMO.

6/27/2010 3:02:15 PM

21 billion - 36 billion = made money?

[Edited on June 27, 2010 at 3:30 PM. Reason : no wonder the government is so effective with money]

6/27/2010 3:29:49 PM

21 billion - 36 billion = made money?

Someone is counting chickens mighty early.

6/27/2010 3:59:07 PM

Well they may have made money on investments from the large banks, but overall the projected cost of TARP is at $105 billion, including AIG and the auto bailouts.

Quote :

"As a result of improved financial conditions and careful stewardship, the expected cost of TARP continues to fall. In August 2009, we projected that TARP would increase Federal deficits by $341 billion. Today, that number is down to $105 billion, which we view as a conservative estimate. And the President has proposed a Financial Crisis Responsibility Fee that will recoup those costs from the riskiest parts of our financial system"

http://www.financialstability.gov/latest/tg_06222010.html#_ftn1

Of course, $105 billion is still preferable to the collapse of the entire economic system so I guess it was successful.

6/27/2010 4:42:53 PM

Isn't the biggest profit making enterprise of the banks right now loaning money to the government? So in other words, the banks are paying back TARP off of the interest they're making by lending the government money.

I could have that completely wrong, correct me if I do. Besides, that isn't a particularly flattering article, you're basically taking Tim Geithner's word that everything is ok.

Quote :

"still preferable to the collapse of the entire economic system"

there is no guarantee we accomplished this, we essentially placed a bet that there were no fundamental structural problems in the US economy that could not be fixed by a rapid infusion of debt-finance liquidity. It remains to be seen if this was a good deal or not.

6/27/2010 5:11:25 PM

^ There are definitely structural problems remaining in the US economy, but EESA was passed to prevent the imminent problem of collapse from banks not lending money. We couldn't just not do anything.

6/27/2010 5:22:34 PM

^Yeah, there seems to be a consensus that we can legislate our way out of negative outcomes. Unfortunately, we can't - all we can do is prolong the inevitable.

6/27/2010 6:07:04 PM

Quote :

"all we can do is prolong the inevitable"

THE END IS NIGH
REPENT YOUR GOVERNMENT SPENDING
FOR THE ECONOMIC GOD WILL DEAL OUT GREAT JUSTICE TO THOSE WHO DO NOT BELIEVE!!!

6/27/2010 6:29:02 PM

I wish that were the case. It really doesn't matter what you believe though. There's a reason European countries are now moving towards austerity. They know they can't withstand the ravages of inflation. Germany knows all too well what hyperinflation can do. Of course, the United States is doing the complete opposite - we just spend more and more. According to Krugman, we're not spending enough.

If you want to believe Timothy Geithner, Ben Bernanke, and Paul Krugman, go for it. Even Greenspan is now saying that we can't afford to take on any more debt. Keynesians will destroy this country if we don't rip power away from them in the next few years. It may even be too late.

6/27/2010 7:43:25 PM

^ Pretty sure it's too late.

And lol to the premise of this thread. The banks are making all their money because the govt is buying their shit assets and paying the banks interest on their deposits.

Fannie and Freddie's losses are over a trillion dollars and still growing rapidly.

Where's that figure in Geithner's calculation???? OFF THE BOOKS!

6/27/2010 8:06:40 PM

http://www.scribd.com/doc/33637066/Bailout-Tally-May-2010

Makes me all fuzzy inside knowing the banks got nearly 5 times as much as the general public. The regulatory capture and the circle jerking between Wall Street and DC has just gotten a bit ridiculous.

6/27/2010 9:59:03 PM

^ They are counting what has been appropriated rather than what has actually been paid, which is how they get a ridiculous $10T figure that is 3x the size of the federal budget.

[Edited on June 27, 2010 at 10:28 PM. Reason : Simplified for general consumption]

6/27/2010 10:21:30 PM

Quote :

"There's a reason European countries are now moving towards austerity. They know they can't withstand the ravages of inflation."

The europeans are more prone to inflation because their economies are so interdependent.

6/27/2010 10:23:25 PM

Quote :

"(2) the government actually MADE MONEY from the bailout funds. Your tax dollars weren't wasted, Mr. Taxpayer."

Seeing as most of the banks that borrowed funds, perhaps 75%, were forced to borrow it against their will, then it is no surprise that they paid it back with interest: it was planned that way. The 75% that didn't want the money would pay interest, covering the losses from the 25% that have not and probably will never repay it. Again, as is becoming an American tradition, those that were sensible find themselves sacrificed for those that weren't.

6/27/2010 10:55:42 PM

Quote :

"(1) the financial system didn't collapse,"

It wasn't going to. But pres. Obama wasn't about to let a crisis go to waste.

6/28/2010 12:30:46 AM

I too don't believe the financial system would have collapsed. The Federal Reserve had all the authority needed to prevent any collapse.

6/28/2010 12:59:15 AM

http://www.nytimes.com/2010/06/28/opinion/28krugman.html

6/28/2010 11:13:26 AM

these assholes aren't Keynesian anyway. Otherwise they would have been pushing hard for rainy day funds back during the 90s and early 00's.

They're just spenders.

6/28/2010 11:17:21 AM

^yep

6/28/2010 11:25:30 AM

Krugman still warning against the boogeyman of deflation, I see. "Falling prices are bad! We can't have things getting cheaper, because wages can't adjust! We gotta print a ton of money!'

What a fool.

6/28/2010 11:27:30 AM

Of course, no mention from Krugman, with all his hyperventilating about Japan's stagflation, that they have been trying Keynsian techniques for nigh on 20 years now with no success.

6/28/2010 11:36:51 AM

They fail to realize that the Congress need not spend for the Fed to print money. Make it rain Bernanke!

6/28/2010 1:59:28 PM

Quote :

"But pres. Obama wasn't about to let a crisis go to waste."

Quote :

"these assholes aren't Keynesian anyway."

Haha. What president started TARP again?

[Edited on June 28, 2010 at 3:44 PM. Reason : .]

6/28/2010 3:43:41 PM

what's your point?

oh you only view issues through a partisan lens, is that right?

6/28/2010 3:56:57 PM

^ My partisan lens? Hahaha...you're the ones blaming Obama for something he didn't even do.

6/28/2010 3:58:17 PM

Quote :

"Haha. What president started TARP again?"

As Nixon stated, we're all Keynesians now. Governments have always used inflation as a way to fund perpetual war, which is essentially what Bush did. I don't think anyone here is going to claim that Bush was some great defender of free markets and sound fiscal policy.

Obama's term brought about the stimulus, the auto bailout, continued bank/GSE bailouts, and I'm sure there will be more to come. Bush did bad things...then Obama one upped him.

[Edited on June 28, 2010 at 4:36 PM. Reason : ]

6/28/2010 4:35:17 PM

ITT we pretend that everything we don't like is Keynesian.

6/28/2010 7:07:33 PM

nothing that the government is doing right now is keynesian. however, they claim it is because they need to make it sound legit.

if it were keynesian they would pay down the debt during times of surplus. balancing the budget aint shit. keynes called for paying down the debt during surplus times. nobody did that and nobody will do that, therefore none of these fucking policies are keynesian

[Edited on June 28, 2010 at 7:59 PM. Reason : ]

6/28/2010 7:58:32 PM

Quote :

"nothing that the government is doing right now is keynesian. however, they claim it is because they need to make it sound legit. if it were keynesian they would pay down the debt during times of surplus. balancing the budget aint shit. "

Our current administration has never been in power during a surplus. If anyone is to blame, it's not people claiming to be keynesian, it's the idea that came in power during the Reagan years of "don't tax but still spend".

Quote :

"nobody did that and nobody will do that"

The Clinton years were about the best you could hope for in terms of that.

6/28/2010 8:56:58 PM

Quote :

"balancing the budget aint shit. keynes called for paying down the debt during surplus times"

6/28/2010 9:09:35 PM

fuck having a horse first, I just want a goddamn cart.

[Edited on June 28, 2010 at 9:32 PM. Reason : who says you have to walk before you can run?]

6/28/2010 9:28:39 PM

Quote :

"I JUST WANT"

6/28/2010 9:49:57 PM

I don't get why these arguments always end up partisan. It's been policy since we went off the gold standard to inflate away debt. Both parties have blessed it. The only difference is the nuance in the amount of debt we rack up and which party is lucky enough to be in the good part of the business cycle.

6/28/2010 10:47:28 PM

Inflation is a great way to discourage people from hiding their money under their mattress. Gives people an incentive to have faith in the economy.

6/28/2010 10:50:37 PM

^
Inflation is good for making your money more and more worthless.

6/29/2010 12:53:29 AM

Quote :

"keynes called for paying down the debt during surplus times. nobody did that and nobody will do that, therefore none of these fucking policies are keynesian"

Clinton did it and practically all presidents before Reagan had his bright ideas, did it.

6/29/2010 12:55:22 AM

clinton did not do it

6/29/2010 8:44:21 AM

^ Clinton reduced the debt by making GDP grow at a rate greater than debt growth. You're just trying to put up some stupid semantics trap.

Quote :

"Inflation is good for making your money more and more worthless."

Cool, it can counteract the growth that causes our money to be worth too much, which stifles growth.

6/29/2010 10:54:30 AM

pay down the debt != make gdp grow faster than debt

son

who's playing semantics here

6/29/2010 11:18:45 AM

I can't count how many times I've been at the store and thought "damn, I have way too much purchasing power with these dollars...if only they would create more of them and give them to banks or special interests, so my money would be worth less."

This debate isn't about semantics, by the way, no matter how badly you want it to be. You'll pretend that Keynesianism is some lost ideal that no one understands except you, but not a single person is going to be fooled by that garbage. Keynesianism is a religion, and you're a zealous disciple. If you were right in your thinking, Zimbabwe would be the most prosperous nation on Earth.

[Edited on June 29, 2010 at 11:24 AM. Reason : ]

6/29/2010 11:19:14 AM

lets inflate artificial bubbles so we can get more income so we're fine when we pop it. great idea

6/29/2010 11:32:06 AM

Quote :

"pay down the debt != make gdp grow faster than debt"

But decrese debt does. You picked out the right word to imply that no president has decreased the debt when that statement is not actually true.

Quote :

"damn, I have way too much purchasing power with these dollars"

If your purchasing power increased without you having to invest it wisely, then you probably wouldn't be at that store cirrculating money and keeping our economy growing.

Quote :

"Keynesianism is a religion, and you're a zealous disciple."

HERP DERP

Quote :

"This debate isn't about semantics, by the way, no matter how badly you want it to be."

Not only do you not understand Keynesianism, but you don't even understand what Solinari and I are talking about. Solinari and I are discussing whether or not presidents have decreased the debt, it has little to do with keynesianism. And I do not think Keynesianism is some lost ideal or that no one understands it but me, but what you are doing is saying that !Liberitarian=Keynesian, which is not true. What FDR used was Keynesian, what Obama used is Keynesian.

Quote :

"If you were right in your thinking, Zimbabwe would be the most prosperous nation on Earth. "

If Liberitarianism worked Somalia would be the most prosperous nation on Earth.
Keynesianism is not just government spending. It's adjusting for aggregate demand.

6/29/2010 12:47:47 PM

Quote :

"If you were right in your thinking, Zimbabwe would be the most prosperous nation on Earth."

Come on, you are smart enough to know that is a ridiculous comparison.

6/29/2010 12:54:46 PM

Quote :

"If your purchasing power increased without you having to invest it wisely, then you probably wouldn't be at that store cirrculating money and keeping our economy growing."

Right. The idea being that if we have deflation, no one will spend money because they can just wait until later to buy something. After all, just look at laptop computers and cell phones. Quality constantly goes up and prices fall. And, as you would expect, no one ever buys laptops or cell phones. I mean, why would you? You'll be able to buy something way better in a year for less money. It's a no brainer.

Quote :

"And I do not think Keynesianism is some lost ideal or that no one understands it but me, but what you are doing is saying that !Liberitarian=Keynesian, which is not true. What FDR used was Keynesian, what Obama used is Keynesian."

No, I'm not saying that. I know what you and Solinari were talking about, but that's not the "semantics" I'm talking about. It's the argument that I don't know Keynesianism is, or that I'm somehow distorting its meaning. I'm not.

Quote :

"If Liberitarianism worked Somalia would be the most prosperous nation on Earth."

Oh, really? Somalia has a government that protects individual rights?

Quote :

"Come on, you are smart enough to know that is a ridiculous comparison."

What's the fundamental difference between what Weimar Republic/Zimbabwe/Argentina did, and what we're doing right now?

I would say it's that we're not actually printing out the bills yet. We don't really print that much money at all, it's created electronically now. And, in a lot of cases, the Federal Reserve isn't the only purchaser of Treasury Bills - it's foreign governments. The Federal Reserve does purchase Treasury Bills, though, and that's monetizing the debt, pure and simple. The mainstream belief is that the Chinese government, and other governments, will continue showing up to these Treasury auctions forever, no matter how fast our deficits grow, and no matter how unlikely we are to actually pay the bond yields once they mature. If we do pay out for bonds, it'll be with devalued money, because we have no other way to cover the cost.

[Edited on June 29, 2010 at 1:33 PM. Reason : ]

6/29/2010 1:26:42 PM

Quote :

"I would say it's that we're not actually printing out the bills yet."

Well, you answered your own question. I would also mention that Zimbabwe was never a great example of political stability to begin with. Not that the United States is, but I think we are a just a little better off than Zimbabwe.

6/29/2010 1:42:49 PM

spending money during a recession IS NOT keynesian.

if you spend money during a recession AND THEN pay down debt during profitable periods, then that is keynesian.

6/29/2010 3:35:29 PM

Quote :

"Clinton reduced the debt by making GDP grow"

No.


The Clinton prosperity was a bubble, but since it didn't pop until 2000 and it was overshadowed by September 11th, this is conveniently forgotten. Matter of fact, the current recession started in 2000 (hardly can blame it on Bush already at that point) but was masked by the growth in defense spending brought on by the wars in Afghanistan and Iraq.


Not saying Bush didn't take a bad situation and make it atrocious, but Clinton was as lucky as anything else.

6/29/2010 6:28:58 PM

Our current economic troubles can be traced back to Taft!

6/29/2010 6:32:00 PM

Quote :

"The idea being that if we have deflation, no one will spend money because they can just wait until later to buy something."

What a stupidly simplistic view. Most any economist will argue for stable inflation, this is so our money supply can grow with our economy. Our labor adds value to more and more goods everyday, a growing money supply should mirror that growth. Deflation screws that up and causes deflationary traps and frequent depressions, inflation reduces these and increase our responsiveness to those depressions.

Quote :

"It's the argument that I don't know Keynesianism is, or that I'm somehow distorting its meaning. I'm not."

You don't know what it is. You seem to think Keynesianism is the same as come combination of government spending and printing money.

Quote :

"What's the fundamental difference between what Weimar Republic/Zimbabwe/Argentina did, and what we're doing right now?"

They did not use deficit spending as a response to economic recession. You asking this question is more than proof that you have no idea what Keynesianism is.

Quote :

"The mainstream belief is that the Chinese government, and other governments, will continue showing up to these Treasury auctions forever, no matter how fast our deficits grow, and no matter how unlikely we are to actually pay the bond yields once they mature. If we do pay out for bonds, it'll be with devalued money, because we have no other way to cover the cost."

Treasury bills are money. We inflated our currency as soon as we issued them.

Quote :

"spending money during a recession IS NOT keynesian. if you spend money during a recession AND THEN pay down debt during profitable periods, then that is keynesian."

Applications of Keynesianism are both. During periods of growth we should reduce government deficit, during periods of recession we should increase government deficit. Both are responses to change in aggregate demand, thus either could be considered Keynesian.

Quote :

"No. The Clinton prosperity was a bubble, but since it didn't pop until 2000 and it was overshadowed by September 11th, this is conveniently forgotten."

You can't say no to that, it has been proven, just look at charts. What caused the growth was irrelevant, as they are both measured in the same terms, if the GDP was artificially inflated then the debt would have been as well. Clinton did lower the debt.

Additionally your statement could arguably be true for the 2002 downturn, but certainly not the 2001 downturn, which was directly caused by the 9-11 attacks.

[Edited on June 29, 2010 at 6:44 PM. Reason : ]

6/29/2010 6:40:11 PM