Wednesday, January 14, 2009

Its Your Money

Isn’t it nice that congress is so concerned about the us. They worked hard to pass the $700B Economic Stimulus Act and get some of that money into the hands of the banks so we could all benefit from the boost in confidence. Now they are proposing a plan to further separate the bad loans those banks made from the good loans and they want more transparency in how Mr. Obama will spend the remaining money. They really are taking good care of the American people.

The reality is that over $300B was given to the banks without any requirements at all. The facts suggest that credit has not become more readily available, retailers have had a dismal 4Q and no one really knows where the money went.

The Fed yesterday proposed a plan to let banks separate bad loans into “Bad” banks (a completely separate entity) where the American public’s meager equity interest lies from the bank’s good loans. This will give the banks more incentive to loan if they aren’t bothered by the pesky bad loans. Isn’t this like saying to a person in Bankruptcy that they can keep the car, house and goodies, all their income and not get a black mark? The Bankruptcy Court will just separate those pesky debts and loans into another entity so the debtor can go out and spend more to stimulate the economy.

This morning I saw an article in the newspaper (aren’t most of my tirades prompted by something in the newspaper) where our esteemed senior Senator Orin Hatch was calling for more control and transparency in how the Obama administration distributed the rest of the Economic Stimulus Package. Isn’t that like a burglar saying he wants to make sure the police handle his stolen items in a reasonable manner?

This is your money they are so casually throwing around. You do have a say and you can complain to your Senator or Congressman or Congresswoman. Or you can just whine about it like I do and think there is nothing we can do about it. This is what started the civil unrest in the 60’s.


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