From the Scriptorium
Federal Budget Deficit Reduction:
Paper #1
There are not many in the Congress that I think should be there because most or inept at governing past their own interests….however….I appreciate Wisconsin’s Rep. Paul Ryan, a Repub…he is young and sharp on financial and budgetary issues…..he has authored a couple of proposals for cutting the budget deficit, while some are good and others I differ with what he see…..I will analyze these proposals…there are 8, I believe….I will give my take on each of his proposals…..(I know you did not ask, but you will get it anyway)
First up is his Cancel Unused TARP Funds and it reads like this:
The proposal would prohibit the Treasury Dept. from exercising authority under the Emergency Economic Stabilization Act to disburse funds for new commitments. Only those funds pursuant to legally binding contracts entered into on or before enactment the enactment of this legislation will be disbursed.
All TARP Funds returned to the Treasury–including dividends, interests or other payments–will go tp deficit reduction and will not create headroom for the Treasury to exercise additional authority.
All this sounds all to simple, huh? While I may agree with Ryan somewhat, I cannot jump on this bandwagon…..this part is just a political game being played now that auto makers are fairly stable, I will agree that the fund was basically a blackmail payment to AIG, Goldman and the other Banksters….but there are still banks that are in real trouble, banks that have people’s lives deposited in them and they may need some help secure the people’s savings and other personal things.
I will agree that using the TARP fund for other spending is not doing us any good and that part of it can be shut down……but to totally shut it down while the banks are in trouble, about 700 so far, is just irresponsible and NOT in the best interests of the country. But all this seems suspect to me….why? Now that the gamblers on Wall Street have gotten there money from the taxpayers it is some how good policy to start trying to cutting spending.
Deficit spending was originally used to generate demand, not liquidity…..this plan did the opposite….since it is NOT being used for what it was designed to do…then I will agree with Rep. Ryan….reluctantly……
As I understand it, the Tarp fund was created to prop up failing banks and big businesses whilst the system stabilised.
The reason no one knows where all that money has gone is that they didn’t want people to know which were the most vulnerable banks etc and make a bad situation worse.
All that sounds logical, but (in my opinion) in fact it isn’t. The real problem is that ordinary people often without realising it, have becom embroiled in the banks’ and others’ games of roulette played with other people’s money.
If the Tarp money had been used to guarantee realatively “small” investment savings (to the savers, NOT the banks) if those banks went down, the amount of money would have been less, the small guy would have been protected and “too big to fail” would not have been an issue.
Deficit spending almost NEVER increases demand, or jobs. That’s because the demand and the jobs that it does increase are all government or government sponsored jobs and needs – so the taxpayer is paying for his own f*cking job – that’s intelligent, isn’t it?
REAL jobs and therefore demand is increased under a capitalist system by encouraging startups and competition, not by protecting the old, the outdated and the failing as you (even more then the UK) currently have right now.
Tarp should be cut off RIGHT NOW and returned to the treasury along with any repayments made and two new funds set up with the money – 1) to protect the small guy and let the wealthy paddle theri own canoe and 2) a fund to help, encourage and finance startups by people and small groups with what is judged to be a viable business plan and new ideas.
Twelve months down the line from that (if all protectionism and ridiculous red-tape was all removed at the same time and the big corporations had to compete in the REAL world), America would be asking, “Crisis? What crisis?”
All that is good…..(now here comes the but)……..but the problem, as I see it, is small businesses will continue to suffer if the consumer is not spending….no matter how much we throw at the problem demand is the only way to start the economic engine…I think it is too late at this time…..ALL the cash has gone where they wanted it to go……
Well, yes, it should never have been spent in that way to my way of thinking. But things balance out and the consumer doesn’t HAVE to borrow money to spend.
A question for you – how would you start or seriously increase demand without increasing individual personal debt?
A good question and one that may not agree with your vision….I would send a refund check to taxpayers making less than $50,000….they are the ones that would most likely take it and spend it….sorry to say I would have done that in the first place, it is too late to try it now…..
Well, yes, that’s one way. I certainly think it’s better than giving it to banksters.
However, I do think there’s something more important to most ordinary people when it comes to spending – especially to those who have a degree of sense of personal fiscal responsibility – and that’s confidence in the future of the economy and how they will personally be affected. My view is F*UCK Wall Street and its “confidence” or lack of it – if people gamble, they can expect to lose sometimes – shit happens as they say!
If SMALL savers and investors in banks can feel that their money is safe and “protected”, they’ll have a lot more confidence to continue spending and THAT was why I suggested fund #1 above.
I’m (as you know) never in favour of supporting the wasters in our societies, but the confidence and wellbeing of the hard working little guy is absolutely VITAL to a democratic nation if it wants to continue to thrive.
I know…..as I am….but we have to admit…if these people get a free check they will spend the cash and that is what our economy needs consumers actually spending money….
Oh, obviously I agree – it’s just that a one time cheque (check) is a bit short term compared with other options, isn’t it?
Yes it is short erm….but if done could effect the long term goals of a recovery.,…baby steps before the giant steps…..not the opposite…exactly what was done and it has helped NO one on Main Street….
Well, it hasn’t helped anyone on Main Street because it was never intended to. It was always ONLY about protecting the banks, finance houses and big corporations.
These politicians always have that same habit of treating the big guys as if they are actually important to the country and should be used to set the standard, whereas it’s the small to medium sized operations that employ by far the greatest proportion of the working population in BOTH our countries.
However, I guess it’s the big guys that pay THEM (the politicians and officials) the most – openly or otherwise!
So true…..it is the way of the government…..governance by the donors….