Back Door Man

What do you do when you’re a likable democratic President, faced with declining approval ratings due to a slow economic recovery, and a groundswell of concern over a ballooning budget deficit?

Answer – Spend more tax dollars!!!!

Just as the core financial institutions start to pay back the bailout money – with interest, President Obama floats the idea of re-purposing those funds to create jobs.

Call it brilliant, call it necessary, or call it fraud?

Two major pieces of legislation have been passed to stabilize and jump-start our economy. TARP and the American Re-Investment and Recovery Act.

TARP was geared toward putting a floor under the collapsing financial industry. We all begrudgingly signed up for this, knowing in the back of our heads that we were headed for an It’s a Wonderful Life “run on the bank” moment.

The Recovery Act, a.k.a stimulus bill, was purportedly geared toward saving or creating jobs. We have spent very little of this money so far and there are tens of billions of dollars in this fund left to be requested and allocated. Much of the money to date has been used to fund short falls in state and local budgets.

But instead of tapping the large amounts of remaining funds that were allocated for stimulus in the Recovery Act, the administration, addicted to spending our tax dollars, wants to allocate TARP dollars for stimulus.

This would be kind of like taking $400M from the education budget a saying we need a bunch of spiffy new tanks! Or taking money from the Social Security trust fund and using it for a new space shuttle program!

I think that Americans are a little too “dis-connected” from our tax dollars. Do we realize it’s our money? That we earned with our own hard work?

Do we realize that when the government tells us they want our support to spend it on one thing, then decides to spend it on something else, that it would be called fraud in the private sector?

Mr. Obama, when all the funds in the stimulus package are tapped, and the economy is still not growing, then come ask us if you can spend more of our money. Then let us debate it. But don’t play the “bait and switch” telling us that we need to tap the TARP money to jump start the private sector when there is already another spending bill with funds allocated to do that.

How about we let the financial institutions pay their TARP debt back to the government, then let the government pay their debt.

What do you think?

Guest Blogger – Jeff Hine


4 responses to “Back Door Man

  1. Maureen Williams

    Right on the money, Jeff !! Not to mention, didn’t we “borrow” the TARP money from somewhere else (that presumably needed it), or did we just happen to have an extra $700 BILLION lying around, doing nothing? Or even worse, maybe we just printed it and handed it out, like a coupon (not transferrable, actual cash value 0.00000000000000000000000001 should now replace E Pluribus Unum on the US Dollar). Maybe we could put some of that interest back into the Social Security slush-I-mean-trust fund so that you and I won’t have to work til we’re a hundred and three just to be able to afford to live til we’re a hundred and three.


  2. The main point that I took away from is piece is that the congress should be more assertive on oversight of monies being repaid by the financial institutions as part of the TARP program. I think that would be a very good thing – Never liked impoundment (under Nixon) and wouldn’t want any more precedents set for the executive branch to get further creative on how money is actually disbursed.

    As for the title, well didn’t seem immediately relevant since it evoked the Doors at first. Otherwise, the tone of the writing comes off little shrilled in parts.

    However, the main message seems spot on. Unfortunately keeping abreast of these matters can be hard when one is overwhelmed by mundane matters. For instance, not sure many folks have kept track of the implications of having social security/medicare be off budget, while any surpluses from those trust funds being included in assumptions and calculations of federal deficits.

  3. Michael – thanks for the thoughtful comment on my post. I did struggle with an attention grabbing title and chose the classic blues reference to “sneaking in the back door” to cheat on your wife while your a work.

    A metaphor for “sneaking” TARP money to pay for jobs programs when there is plenty of money in another govt program to do that.

    I’m with you on your thoughts on medicare and SS. While I like the fact that the Senate is re-looking at the Healthcare Bill, pay attention to Senator Lieberman when he points out that the seemingly good idea of expanding Medicare to those 55 or older as a way to expand coverage, has massive implications on the solvency of medicare which is already in question.

    I applaud the creativity of how to expand coverage without a public option, but it just shifts the budget problem back into medicare.

  4. As if it was not enough to grab the $75B left over in the TARP fund and use it to do things that Stimulus I was supposed to do.

    Yesterday, the House began the process of passing Stimulus II – The Sequel. A $155B spending bill was passed, partially funded by the remaining TARP money, but including an additional appropriation on nearly $75B.

    The bill sounds frightening like what the original stimulus bill was supposed to do, proving once again that government just can’t get it right.

    One thing this bill does not have, of course, is assistance for small business. For heavens sake, why would we help out the people who actually create new jobs.

    Sometimes I wake up, I read the headlines, and I just don’t believe that they are true, but they are.

    Should the people of China start asking for a say in how we are spending their money? We’ve run out of our own, this is all theirs, and at some point, they are going to want it back.

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