Posted tagged ‘Geithner’

Another Bailout for GMAC? Seriously?

October 28, 2009
From Clusterstock:
Tim Geithner’s getting ready to shovel more taxpayer money down the rat hole, this time to GMAC.

GMAC, in case you’re in understandable denial, has been bailed out twice already.

And now Tim Geithner wants to shovel another $2.8 billion in.
What is the US taxpayer getting in exchange for all these GMAC bailouts?

Preferred stock.

Why are we getting preferred stock, which is neither a claim on the future upside of the company’s equity, nor a senior debt security that will be completely repaid in the event that taxpayers finally get mad as hell and won’t take it anymore?

Because Tim Geithner is worried that if he makes the folks who voluntarily lent money to GMAC — the bondholders — lose so much as a cent, the entire US economy will collapse.

Unbelievable. Sooner or later something has to give. And when it does, it won’t be pretty.


US Deficit Over $1 Trillion for the First Time Ever

July 13, 2009


AP WASHINGTON – Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time.

The imbalance is intensifying fears about higher interest rates and inflation, and already pressuring the value of the dollar. There’s also concern about trying to reverse the deficit — by reducing government spending or raising taxes — in the midst of a harsh recession.

The Treasury Department said Monday that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion.

The deficit has been propelled by the huge sum the government has spent to combat the recession and financial crisis, combined with a sharp decline in tax revenues. Paying for wars in Iraq and Afghanistan also is a major factor.

The country’s soaring deficits are making Chinese and other foreign buyers of U.S. debt nervous, which could make them reluctant lenders down the road. It could force the Treasury Department to pay higher interest rates to make U.S. debt attractive longer-term.

“These are mind boggling numbers,” said Sung Won Sohn, an economist at the Smith School of Business at California State University. “Our foreign investors from China and elsewhere are starting to have concerns about not only the value of the dollar but how safe their investments will be in the long run.”

Government spending is on the rise to address the worst financial crisis since the Great Depression and an unemployment rate that has climbed to 9.5 percent.

Congress already approved a $700 billion financial bailout and a $787 billion economic stimulus package to try and jump-start a recovery, and there is growing talk among some Obama administration officials that a second round of stimulus may be necessary.

This has many Republicans and deficit hawks worried that the U.S. could be setting itself up for more financial pain down the road if interest rates and inflation surge. They also are raising alarms about additional spending the administration is proposing, including its plan to reform health care.

President Barack Obama and other administration officials, including Treasury Secretary Timothy Geithner, have said the U.S. is committed to bringing down the deficits once the country has emerged from the current recession and financial crisis.

As if a deficit of more than $1 Trillion wasn’t bad enough, “Debt Day” (the point in the fiscal year when government spending exceeds revenue) was less than three months ago. Zero to -1 Trillion in less than three months.

How much deeper in debt can we go? A lot deeper if the federal government insists on going through with Cap & Trade, Universal Health Care, and maybe – just maybe – another round of stimulus.

Shhh – you can almost hear the Chinese from here…Spend, baby, spend!

Obama’s AIG Outrage

March 17, 2009

Yesterday’s news of AIG executives receiving $165 million in bonus payments was indeed enraging. Even more troubling was the news that AIG paid out over $100 billion to Goldman Sachs – a private business with deep ties to the US Treasury.

Today, Barack Obama expressed “outrage” over the executives bonuses, urging Goldman Sachs insider and current Treasury Secretary Tim Geithner to use “all legal means to stop AIG bonuses“, going so far as threatening to withhold further TARP infusions.

I have only one thing to say to this. Mr. President, your “outrage” today is much too little coming much too late. If you actually had any kind of moral opposition to wasting taxpayers money like this, you would have voted against the original Bailout Bill back in October. But you didn’t. You came in from the campaign trail to vote FOR this morally reprehensible legislation along with your opponent, John McCain.

If you actually thought there might be a moral hazard to giving away billions of dollars from our children’s future you would have joined the vast majority of American citizens who called, faxed, emailed and rallied against the Bailout Bill before it was made law. But you did not.

Your words today are hollow and insulting to all of us who said in September that nothing good would come of the Bailout. It is too late now, Mr. Obama, to play at righteous indignation over something you helped create.

Also jumping on the outrage bandwagon are Ben Bernanke (who asked for and wrote the Bailout), Tim Geithner (who oversaw distribution of the Bailout), Larry Summers, NY Fed President (and ex-Goldman economist) William Dudley, Rep. Barney Frank, Sen. Bob Corker and others (who voted for the bailout).

Americans, if you are indeed outraged by what is being done with your money it is time you learn who your true friends are. The Campaign for Liberty, Lew Rockwell and the Mises Institute are among those who spoke out and coordinated efforts against the Bailout. In fact, these are the people who knew the housing bubble would pop, knew it would effect the whole economy and know that the actions being taken now to “rescue” the economy will only make matters worse. Isn’t it time you got to know your real friends?