While TARP was controversial and some folks still claim it was a massive failure, the government recently sold off its AIG stock at a nice profit. At this point, the state has gotten back $380 billion of the $418 billion that was distributed through TARP. This is about 90%.
As might be imagined, some people will still be concerned that the government is still about 10% shy of breaking even on TARP. Naturally, it is also worth considering the possible benefits of TARP. After all, if it helped prevent a total meltdown and the state has gotten about 90% of its expenditures back, then it seems like it was a pretty good deal.
Naturally, I expect people to give reasons why TARP was horrible.
I thought TARP was bad by because it was a Bush initiative, and everything Bush did was bad.
Also, remember the Dem claim that the Bush tax cuts only benefited the wealthy? Now we find out that the middle class benefited from the tax cuts, too. Who knew?
When I got my Bush era tax refund, I knew it was benefiting me-at least in the short term. But, there turned out to be a price for cutting taxes while increasing spending. As I deposited the refund, I remember thinking that we’d all pay for this someday.
So how much of the trillion dollar deficit do you think is due to insufficient taxation, and how much to excessive spending?
That is an excellent question. In fact, it is the trillion dollar question.
The easy answer is that taxation should equal the expenditures that we should make as a society. That is, we should pay for what society should provide. The devil, as always, is in the details.
I would say that there is probably a greater overabundance of spending than an under-abundance of taxation.
Like most folks, I would rather pay less taxes. But, like most folks, I also like what the state provides (defense, police, fire, roads, schools, and so on).
To also state the obvious, we need a serious conversation in this country about the matter. Unfortunately, what we mostly get is partisan politics and foolishness.
<<Face-palm…..
Seriously, the big problem with TARP is the idea that certain companies are too important to be allowed to fail. I don’t see much public good in companies that keep their profits in good times and socialize their losses in bad times.
Isn’t this an example of the corporate welfare that Mike rails against?
True-privatizing profit and socializing loss is not a fair system.
While I am against wealthfare, a case could be made that the state had to intervene to keep the economy from failing worse. Of course, a case can also be made that the companies that failed should have been allowed to collapse into ruin, perhaps dragging the entire world economy into the pit with them.
You are right to be concerned about “too big to fail.” After all, if a company is so big that its failure can wreck the world, then it is probably too big. From the standpoint of protecting civilization, limiting size could be justified on these grounds.
It also makes sense to split the traditional banking from the financial gambling to compartmentalize the damage. In general, I favor regulation that is aimed at preventing the economy from being crippled. That seems just as sensible as having laws against traditional crimes that harm society.
It goes beyond not allowing some companies to fail. Now we can’t even prosecute people from certain companies.
State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system. …
http://www.washingtonpost.com/blogs/post-partisan/wp/2012/12/11/too-big-to-fail-becomes-too-big-to-indict/