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Profit Doesn't Absolve TARP
IBD Editorials ^ | May 16, 2011 | TOPM SCHATZ

Posted on 05/16/2011 4:57:17 PM PDT by Kaslin

According to a mid-May news story, Democrats are considering using the issue of the auto bailouts in the 2012 election — as a political asset.

The argument is, since government losses appear to be "minimal," Americans will likely see the auto bailouts — and by extension the entire Troubled Asset Relief Program (TARP) — as a positive. This is unlikely. Americans were not only turned off by the cost of the bailouts, but also by the driving principle behind them.

When Congress debated TARP in the fall of 2008, there were two main arguments against the plan: the dollar cost to taxpayers and the moral hazard of making it clear there were companies in the U.S. that were just too big too fail.

For several months, politicians and pundits have been sowing the "remarkable" story that TARP helped the economy (even though it is impossible to accurately determine what the U.S. economy would look like now had TARP never been passed) while earning a profit for taxpayers. (On March 30 TARP went from loss to profit, and another report was issued on April 22 touting the program's profitability).

But a recent story illustrates the inherent problems in allowing the government to so deeply intervene in private markets. In April a rumor that the Treasury Department may sell off its remaining 500 million shares in General Motors sparked a 1.3% decline in GM's stock price.

When the government takes over a company or intervenes heavily into one sector of the economy, it is often the largest consumer. One slight move can have a radical influence on the system, such as the decline of GM's stock on a rumor.

(Excerpt) Read more at investors.com ...


TOPICS: Business/Economy; Editorial; Government
KEYWORDS:

1 posted on 05/16/2011 4:57:19 PM PDT by Kaslin
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To: Kaslin

BS, no one really knows the true cost of TARP. Other than the fact that the democraps moved the government base line and the republicans seem to want to refuse to remove a trillion dollars of annual pork.


2 posted on 05/16/2011 5:05:20 PM PDT by org.whodat
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To: Kaslin

Democrats running on TARP should work out as well as running on Obamacare did in 2010.


3 posted on 05/16/2011 5:34:12 PM PDT by sportutegrl
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To: sportutegrl

Good point


4 posted on 05/16/2011 5:50:58 PM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: Kaslin

I would rather lose all the money tossed into that illegal, immoral, un-American program than give the socialists an excuse to claim it wasn’t as bad as it looks. Sadly, we will probably lose almost all of the money tossed into that pit, but the communists and the media will doctor the books and claim it wasn’t that expensive - the worst of both worlds, as usual with this crowd.


5 posted on 05/16/2011 7:48:23 PM PDT by Pollster1 (Natural born citizen of the USA, with the birth certificate to prove it)
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