Follow The Law

• There are legitimate debates about the necessity, efficacy, and propriety of the Troubled Asset Relief Program (TARP). But kudos to Senator Judd Gregg (R-NH) for telling it like it is.
  
  When the TARP legislation was enacted, part of the law said that any monies repaid by the banks would go into the general fund and thereafter be used for the retirement of national debt. No ifs, ands, whereas’s, maybe’s, or discretion. That is the law. White House Budget Director, Peter Orszag, tried to insinuate that the Obama Administration would use paid back funds for new loans to small businesses. Senator Gregg correctly reminded the Administration that we are a country of laws, and those laws must be followed, even when this President doesn’t like them.

  Beyond the disrespect for the law comes the question of when it is time to end this program.  As with any government subsidy or bailout, the danger of perpetuity are real and in the case of the TARP, all too real.

  Heritage pointed out why TARP, perhaps somewhat needed initially, should be ended here

  One of the points raised by Heritage is a good one:

  Strengthen Capital Standards: Congress should strengthen capital standards to discourage financial firms from reaching the point that their failure could endanger the entire financial system.

  Instead of encouraging banks and others to lend to high risk clients and make a joke of fractional banking, Congress should take a lesson from our parents and grandparents are ensure that the law requires prudence.

  But perhaps the biggest scam of all, one that the Administration won’t admit to, and is the dirty little secret around the country, is that banks are lending to private entities because they can get a sure rate of return by lending to the government.

  How?

  Banks currently borrow money FROM the government at 0% interest, and lend it back TO the government, at 3 – 4% interest.   Meanwhile, American taxpayers are hurting, unemployment rises, and small business has no access to credit.

  

  Should anyone wonder why banks aren’t lending?  We must put a stop to free money, to a select few, who then, in turn, fleece the taxpayer.  This is not a populist rant, this is the real world.   A world in which our children and grandchildren are saddled with debt, while a select few make billions, and unemployment rises.  It is bad policy, bad governance, and it is just plain wrong.

  So Bravo to Senator Gregg for exposing PART of the problem – arrogance of power.  Now if only someone had the political courage to tell the American people that pain is coming, but like resetting a bone or curing a toothache, the pain incurred now will lead to long term wellness.  Pain like foreclosures, auto plant closings, and dislocation of workers. But as long as we try to make this pain free, the only people who will be hurt are the little ones who wake up everyday expecting us to leave them a country better than we found it.

  
  

 

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