TARP Now Truly Lives Up To Its Name

Does anyone else find this shameful?

In a speech this morning, Paulson laid out his priorities for some $350 billion of the bailout fund that remains uncommitted. Much of the first half was used for direct capital investments into banks.

At least some of the the remainder, Paulson said, should be used to reinvigorate the market for credit cards, student and auto loans — which combined account for some 40 percent of consumer credit.

“This market, which is vital for lending and growth, has for all practical purposes ground to a halt,” Paulson said.

So Treasury has burned through the first $350B and now they are proposing to prop up every credit industry in the country with the remaining half of the $700B boondoggle? If in September we were standing on the precipice of an almost vertical slippery slope to the abyss, then in November we’ve decided to go for a nice sled ride to the bottom on a sled fashioned from a pile of dollars.

It makes one wonder, how on earth do they propose to get people approved for more loans and convince them to borrow again? Shall Congress pass a law requiring every American over 18 yrs. of age to take out at least X dollars in loans (for whatever, it doesn’t matter to the economy)? Will they then require banks to issue said loans to Americans who are underemployed and up to their eyeballs in existing debt that they can’t manage? Unless the Feds can wave a magic wand and give middle and lower class Americans a serious wage boost, this can’t possibly work for more than a few months. Oh, wait..

Update:
I also took a minute this morning to write my Senator and Representative, as well as the Speaker of the House and the minority leadership, asking them to insist on disclosure of the FED’s activities under the TARP (and additional lending facilities). I suggest that every American that cares about the fate of this nation do the same. Feel free to co-opt any language from this site as you see fit. Those unfamiliar with this issue may want to read this article from Credit Writedowns, Bloomberg News sues the Fed under Freedom of Information Act.

It is urgent that the public be informed about the activities of the Treasury’s TARP program. The spirit of the TARP legislation requires disclosure and transparency. Taxpayers deserve to know what assets the Federal Reserve is taking on its balance sheet, from whom it is acquiring these assets, and how the assets are being valued. Americans have a keen interest in understanding the risk involved to the taxpayers. The FED’s refusal to provide this information under FOIA leads one to assume that it is a very large risk, indeed.

Update 2:
GE Says Government Will Guarantee Debt

Congress to take up $25B automaker aid pkg.

Paulson announcement: Treasury Officially Abandons Purchase of Troubled Assets

Quote of the Day: “The U.S. didn’t nationalize the banks; the Banks privatized the Treasury.” -Jesse’s Cafe Americain