In less than a week, the city of New Orleans will begin celebrating Mardi Gras including over 20 different parades in a ten day span. Come Fat Tuesday though, all the parades will be over and revelers will have to wait another year before they can try and grab throws from the passing floats. The American taxpayer is not so lucky. For over a year we have been paying for a parade of bailouts which, despite President Barack Obama’s promise of change, doesn’t seem to have an end in sight. A quick recap of the boondoggles so far, and those around the corner, include:
The Stimulus, February 9, 2008 – At a bush league price of only $168 billion, Speaker Nancy Pelosi (D-CA) and Majority Leader Harry Reid (D-NV) passed, and President Bush signed the first measure that economists assured us would save the economy. The core of the bill was tax rebate checks for more than 111 million U.S. households (a carbon copy of the tax cuts in Obama’s current stimulus plan). Also in the bill thanks to hard lobbying from Pelosi: increased limits on the size of mortgage loans that Fannie Mae and Freddie Mac could buy. Remember when the left still thought government could keep the bubble from bursting?
The Housing Bailout, July 30, 2008 – A bill that David Broder praised as proof that “Congress Works“, the ’08 housing bill again increased the limit on size of the loans Fannie and Freddie could buy, put taxpayers on the hook for an increased $300 billion in new FHA lending authority, cut local governments a check for $3.9 billion to buy foreclosed properties, and provided $15 billion in temporary tax breaks for home buyers. Oh … and it also gave the Treasury Department the authority to buy Fannie and Freddie stock … but don’t worry … those government sponsored entities could never fail.
TARP I: The First $350 Billion, October 3, 2008 – Originally sold to the American people as an acutely targeted program to rid the financial sector of toxic mortgage assets, the Troubled Asset Relief Program quickly lost all coherence. First the money was used to inject capital into select U.S. banks, but then Secretary Hank Paulson announced he would purchase stock in non-bank financial firms and provide federal financing for investors in securities backed by consumer debt such as car loans, student loans, and credit cards. The last of the first $350 billion was swallowed by the failing auto giants General Motors and Chrysler.
TARP II: The Second $350 Billion, January 15, 2009 – Following the required formal request from Treasury Secretary Henry Paulson, the Senate failed to stop the second $350 billion TARP funding mere days before President Obama was sworn in. The world is waiting with bated breath to find out how Tax Cheat Timothy Geithner plans to blow his first $350 billion, but already his plans have been all over the place. Early in January, Geithner made it clear his plans would be as incoherent as Paulson’s, promising to “broaden its scope … to municipalities, small businesses, homeowners and other consumers.” Now Geithner is singing a tune closer to Paulson’s original vision including more government purchases of bank equity, with strings attached, including loan modification programs. We’ll see what happens.
The Mother of All Stimuli, sometime next week, 2009 – Already clocking in at over $1.34 trillion over ten years, Obama’s Trillion Dollar Debt Plan is Bushonomics on steroids. The bill is a straight forward attempt to permanently redistribute spending and power away from the private sector and toward government at the cost of trillions of dollars in tax dollars from our children.
TARP III: The Tax Cheat Returns, ???, 2009 – Few people know exactly what Geithner will announce tomorrow, and nobody knows if Geithner will keep his word. But everybody expects that whatever he outlines will eventually require more money. The New York Times reports that the effort”will almost certainly entail a far bigger commitment of taxpayer dollars than the $350 billion left from last year’s $700 billion effort to right the system, and probably far more than the stimulus package.“So after Obama gets his $1.34 trillion, expect Geithner to be passing the plate around again.
The Housing Bailout II, ???, 2009 – Could the Obama Administration really come to the American people asking for more deficit spending after a $1.34 trillion stimulus and a $??? trillion TARP Bailout? Yes they can! The New York Times reports: “And the final part, which Mr. Obama is not expected to announce for days, involves spending billions of dollars more to prevent home foreclosures, for fear that the displacement and anger created by throwing people out of their homes, and putting more properties onto a glutted market, will create a psychological and financial death spiral.”