Bank bailout estimate cut by $200 billion

[rastaman]

Bank bailout estimate cut by $200 billion

The Obama administration had estimated the cost to taxpayers of the $700-billion Troubled Asset relief Program would be $341 billion but now says it can cut that by $200 billion.

Monday, December 7, 2009

WASHINGTON (Reuters) - The projected long-term cost of the U.S. government's bailout of the nation's big banks is going to be at least $200 billion less than previously thought, a Treasury Department official said on Sunday night.

The Obama administration had estimated the cost to taxpayers of the $700-billion Troubled Asset relief Program, or TARP, would be $341 billion but now says it can cut that by $200 billion.

"That improvement is driven by the fact that Treasury's investments to stabilize the system are delivering higher returns than anticipated and that Treasury does not anticipate having to draw upon the full $700 billion in TARP authority," the Treasury official said.

Congress approved the TARP program when the financial crisis was raging last year so that the government could inject money into ailing banks and keep them from dragging the whole financial system down.

It has never been popular politically so the administration is eager for any good news to tamp down anger at the bailouts.

With financial markets now firming up and banks lining up to repay their TARP funds, Treasury will have some room to consider whether and how some TARP funds can be used for other purposes like job creation and deficit reduction.

"Taxpayers will pay less than previously thought, and the deficit and debt will be lower," Treasury said.

The budget deficit hit a record $1.4 trillion in fiscal 2009 and is expected to be around the same in fiscal 2010 because of the government's huge borrowing needs.

Banks are eager to repay their bailout money in order to free themselves from government-set restrictions on pay that they fear will make them less competitive in relation to banks that have already exited the TARP program.

In the past week, Bank of America said it intends to repay $45 billion of TARP funds and, once that happens, some $116 billion of bailout funds will have been repaid. Treasury said it now estimates that $175 billion will be repaid by the end of 2010.

Citigroup Inc is trying to persuade the U.S. government to allow it to repay $20 billion in taxpayer funds before a window to launch a share sale effectively shuts by the middle of next week, the Financial Times reported on Sunday.

The government used TARP funds to prop up banks as well as to invest in some industrial firms like General Motors. It is receiving interest and dividend payments from firms that it invested in but there still will be long-term costs.

President Obama is scheduled to deliver a speech on job creation on Tuesday and it is anticipated that he will discuss using TARP funds for job creation. There are objections to doing so from some Capitol Hill Republicans, who say any money returned from TARP investments should be devoted exclusively to deficit reduction.

Treasury singled out banks that got bailout money as particularly strong performers in terms of producing dividends and repaying the funds they received.

"Total bank investments of $245 billion in FY2009 (the U.S. tax year that ended September 30) that were initially projected to cost $76 billion are now projected to bring a profit of $19 billion," the official said

[cutthemdown]

They said from the start that the govt could make a lot of the bank bailout money back. Stimulus package? well not so much.

[Garcia Bronco]

Let's see if the return it to the debt.

[Rigs11]

bad news for repubs. bank of america already said they were paying back, now this.

[Smiling Assassin27]

Let's see if the return it to the debt.

Dude, get serious. We all know that the money will be diverted to some other spending initiative, presumably something vague like 'infrastructure', designed to create or save more fictional jobs. In fact, this new 'jobs initiative' involving weatherization and stuff will be funded from those monies. Debt? C'mon now.

Besides, hold the phone. Obama came out on Monday saying we will be winding down TARP and use those unused funds for the brilliant job initiative outlined above. Today, though, Tiny Tim Geithner threw this chestnut at us:

Bailout Program Extended to October: Geithner
GEITHNER, TARP, BAILOUT, FUNDS, GOVERNMENT
The Associated Press | 09 Dec 2009 | 09:42 AM ET

Treasury Secretary Timothy Geithner says the administration is extending the financial bailout program until next fall.

In a letter to House and Senate leaders, Geithner says the extension is "necessary to assist American families and stabilize financial markets."

Money from the $700 billion taxpayer-funded bailout program has helped rescue big Wall Street firms, auto companies and others.

That's angered many Americans, who feel the government hasn't provided them with relief from high unemployment and rising home foreclosures.


Geithner says the program will be extended until Oct. 3, 2010.


I'm no wordsmith, but I do believe we have a major contradiction here. Is it being 'wound up' or is it being 'extended'? If it is to be extended, you can say bye bye to the $200 billion. This White House is being run by rank amateurs who can't even communicate on the simplest level. It's like a facepalm per day with this goof.

How many of you would like to take your vote back now?

[bronco militia]

he saved us some money!!!!

President Obama is scheduled to deliver a speech on job creation on Tuesday and it is anticipated that he will discuss using TARP funds for job creation.

umm nevermind

[Rohirrim]

An infrastructure jobs program would be a good idea.

[Garcia Bronco]

An infrastructure jobs program would be a good idea.

Didn't they already allocate money for this infrastructure reinvestment?

[cutthemdown]

so even though they tout most of first stimulus unspent as of yet they need to take the bank bailout money, that is coming back in, and spend that also.

Unbelievable. Once Obama spends this money the economy truly is owned by him.

[TheDave]

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 09 Dec 2009 at 05:25:56 PM GMT is:
<TABLE border=5 cellSpacing=5 cellPadding=5><TBODY><TR><TD align=middle>http://www.brillig.com/debt_clock/debtiv.gif</TD></TR></TBODY></TABLE>The estimated population of the United States is 307,436,403
so each citizen's share of this debt is $39,335.38.

The National Debt has continued to increase an average of
$3.84 billion per day since September 28, 2007!

[Rohirrim]

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 09 Dec 2009 at 05:25:56 PM GMT is:
<TABLE border=5 cellSpacing=5 cellPadding=5><TBODY><TR><TD align=middle>http://www.brillig.com/debt_clock/debtiv.gif</TD></TR></TBODY></TABLE>The estimated population of the United States is 307,436,403
so each citizen's share of this debt is $39,335.38.

The National Debt has continued to increase an average of
$3.84 billion per day since September 28, 2007!

Damn! What we need is a new derivatives bubble. Hopefully, Goldman Sachs can come up with something.

[TheDave]

Damn! What we need is a new derivatives bubble. Hopefully, Goldman Sachs can come up with something.

and to think it was just over 4 trillion before GWB took office.

That dumb ass pushed it to over 10 in 8 years. Then this numb nuts comes in and adds 20% to that in less than a year.

Everyone one of these guys from both parties shpould be hung for "Economic Treason".

[Rigs11]

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 09 Dec 2009 at 05:25:56 PM GMT is:
<TABLE border=5 cellSpacing=5 cellPadding=5><TBODY><TR><TD align=middle>http://www.brillig.com/debt_clock/debtiv.gif</TD></TR></TBODY></TABLE>The estimated population of the United States is 307,436,403
so each citizen's share of this debt is $39,335.38.

The National Debt has continued to increase an average of
$3.84 billion per day since September 28, 2007!
how much of that is due to Obamas spending?

[TheDave]

how much of that is due to Obamas spending?

It was 10.2ish when he took office...

[Rohirrim]

I wonder if it might have been a bad idea to ship our manufacturing overseas and become an import nation? Gee, thanks, Sam Walton. :wave:

[watermock]

First, that money wasn't even supposed to go to the banks to pay their losses in the derivatives market, where most losses occurred, but to help with the millions of forclosures, however, congress didn't put enough specifics.

Second, they paid these monies (virtually interest free) back early not out of the goodness of their heart, no, but for the sole purpose of that money returned was so exorbitant bonuses they had planned for the end of the year, despite continuing misery in the economy.

[watermock]

If I were president, I say screw you, **** the debt, **** the banks, and **** anyone else thsat isn't an American from owning our land.

We don't need the globalists, and we still have some warships.

Global warming?

Canada.

Next?

[Inkana7]

If I were president, I say screw you, **** the debt, **** the banks, and **** anyone else thsat isn't an American from owning our land.

We don't need the globalists, and we still have some warships.

Global warming?

Canada.

Next?
What the **** is wrong with you?

[Garcia Bronco]

I wonder if it might have been a bad idea to ship our manufacturing overseas and become an import nation? Gee, thanks, Sam Walton. :wave:

Thank the taxes on Business that allowed this to happen across the board.

[rastaman]

Thank the taxes on Business that allowed this to happen across the board.

Thats bogus and you know it! It was the Reagan tax cuts, deregulation, and breaking down of the import/export tarrif laws and taxes that are largely responsible for America economic, financial and domestic problems we see today.

The trans-globalist and economic royalist have rigged the system in their favor at the expense of the average Americans in the income levels from minimum wage to $250K.

Garcia you should be on OUR SIDE not the monied interest who have tried to take America and the world for that matter into the 2nd Republican caused Great Depressioin.

WE ARE MAD AS HELL AND WE AIN'T TAKING IT ANYMORE.

[Garcia Bronco]

Thats bogus and you know it! It was the Reagan tax cuts, deregulation, and breaking down of the import/export tarrif laws and taxes that are largely responsible for America economic, financial and domestic problems we see today.

The trans-globalist and economic royalist have rigged the system in their favor at the expense of the average Americans in the income levels from minimum wage to $250K.

Garcia you should be on OUR SIDE not the monied interest who have tried to take America and the world for that matter into the 2nd Republican caused Great Depressioin.

WE ARE MAD AS HELL AND WE AIN'T TAKING IT ANYMORE.

You have no idea the taxes a business faces in this country. So I am not going to even have this discussion with you. We have the one of the highest corporate tax rates int eh world. Chew on that when your job leaves the country.

[rastaman]

You have no idea the taxes a business faces in this country. So I am not going to even have this discussion with you. We have the one of the highest corporate tax rates int eh world. Chew on that when your job leaves the country.

Chew on this! Corporation do not pay nearly the amount of taxes due the the loopholes and illegal offshore accounts and tax heavens! Sure on paper it appears Corporations and the wealthy pay taxes. However, once they're lawyers and tax experts work there magic Corporations are luck to pay 25% or any taxes at all.

After the Republican Great Depression, FDR put this nation back to work, in part by raising taxes on income above $3 to $4 million a year (in today’s dollars) to 91 percent, and corporate taxes to over 50% of profits. The revenue from those income taxes built dams, roads, bridges, sewers, water systems, schools, hospitals, train stations, railways, an interstate highway system, and airports. It educated a generation returning from World War II. It acted as a cap on the rare but occasional obsessively greedy person taking so much out of the economy that it impoverished the rest of us.

Through the 1950s, though, more and more loopholes for the rich were built into the tax code, so much so that JFK observed in his that dropping the top tax rate to 70% but tightening up the loopholes would actually be a tax increase.

JFK pushed through that tax increase to take us back toward FDR/Truman/Eisenhower revenue levels, and we continued to build infrastructure in the US, and even put men on the moon. Health care and college were cheap and widely available. Working people could raise a family and have security in their old age. Every billion dollars (a half-week in Iraq) invested in infrastructure in America created 47,000 good-paying jobs as Americans built America.

But the rich fought back, and won big-time in 1980 when Reagan, until then the fringe “Voodoo economics” candidate who was heading into the election trailing far behind Jimmy Carter, was swept into the White House on a wave of public concern of the Iranians taking US hostages. Reagan promptly cut income taxes on the very rich from 70% down to 27%. Corporate tax rates were also cut so severely that they went from representing over 33% of total federal tax receipts in 1951 to less than 9% in 1983 (they’re still in that neighborhood, the lowest in the industrialized world).

The result was devastating. Our government was suddenly so badly awash in red ink that Reagan doubled the tax paid only by people earning less than $40,000/year (FICA), and then began borrowing from the huge surplus this new tax was accumulating in the Social Security Trust Fund. Even with that, Reagan had to borrow more money in his 8 years than the sum total of all presidents from George Washington to Jimmy Carter combined.

In addition to badly throwing the nation into debt, Reagan’s tax cut blew out the ceiling on the accumulation of wealth, leading to a new Gilded Age and the rise of a generation of super-wealthy that hadn’t been seen since the Robber Baron era of the 1890s or the Roaring 20s.

And, most tragically, Reagan’s tax cuts caused America to stop investing in infrastructure. As a nation, we’ve been coasting since the early 1980s, living on borrowed money while we burn through (in some cases literally) the hospitals, roads, bridges, steam tunnels, and other infrastructure we built in the Golden Age of the Middle Class between the 1940s and the 1980s.

We even stopped investing in the intellectual infrastructure of this nation: college education. A degree that a student in the 1970s could have paid for by working as a waitress at a Howard Johnson’s restaurant (what my wife did in the late 60s – I did so working as a near-minimum-wage DJ) now means incurring massive and life-altering debt for all but the very wealthy. Reagan, who as governor ended free tuition at the University of California, put into place the foundations for the explosion in college tuition we see today.

The Associated Press reported on August 4, 2007, that the president of Nike, Mark Parker, “raked in $3.6 million [in compensation] in ‘07.” That’s $13,846 per weekday, $69,230 a week. And yet it would still keep him just below the top 70% tax rate if this were the pre-Reagan era. We had a social consensus that somebody earning around $3 million a year was fine, but above that was really more than anybody needs to live in America.

In the worldview Americans held in the 1930-1980 era, Parker’s compensation was reasonable. But William McGuire (aka in the business press as “Dollar Bill“) taking over $1.6 billion – $1,600,000,000.00 – from the nation’s second largest health insurance company (you wonder where your health care dollars are going?) would have been considered excessive before the “Reagan Revolution.”

There is much discussion of what the floor on earnings should be – the minimum wage – but none about the ceiling. That’s largely because effectively there is no ceiling, and those who control vast wealth in America are happy to have Americans fight over “How poor is too poor?” just so long as nobody asks “How rich is too rich?”

When Reagan dropped the top income tax rate from over 70% down to under 30%, all hell broke loose. With the legal and social restraint to unlimited selfishness removed, “the good of the nation” was replaced by “greed is good” as the primary paradigm.

In the years since then, mind-boggling wealth has risen among fewer than 20,000 people in America (the top 0.01 percent of wage-earners), but their influence has been tremendous. They finance “conservative” think tanks (think Joseph Coors and the Heritage Foundation), change public opinion (Walton heirs funding a covert effort to change the “estate tax” to the “death tax”), lobby congress and the president (who calls the “haves and the have-more’s” his “base”), and work to strip down public institutions.

The middle class is being replaced by the working poor. American infrastructure built with tax revenues during the 1934-1981 is now crumbling and disintegrating. Hospitals and highways and power and water systems have been corporatized. People are dying.

And Bush, following closely in Reagan’s footsteps, made things worse.

[JJJ]

High corporate tax rates are dumbest thing on the planet. If you want to create jobs you must remain competitive against other countries with your corporate tax rates. Even leftie European governments understand that.

[watermock]

The International Bankers, Govemnent incompetence the agenda of the MIC has destroyed this country, which is what they have planned.

I have one thing to say to those who relish in our downfall, "Be carefull what you wish for."

[Meck77]

Remember Obamas speech that he was going to get tough on banks?

Turns out the your tax dollars are being used against you by buying up tax liens across the country. WOW.....

Obama ran on change. It's flat out gotten worse under his watch. Much worse. You guys can cry about bush all you want. Crying won't make your 401ks come back. At least under Bush even you Bush haters were making money! Now it's just the big banks!

http://azstarnet.com/real-estate/article_662a10e9-c317-5b92-a51b-9efa96fce37d.html

Mock you called it buddy.