In 2008, at the peak of the financial crisis, Congress voted “No” to the $700 billion TARP bill. Some readers might recall how a number of GOP congressmen bravely banded together and flipped Wall Street “the bird”. That didn’t happen this time around. Even though the bill is three times bigger than the TARP ( $2.2 trillion), no one lifted a finger to stop it. Why?
Fear, that’s why. Everyone in congress was scared to death that if they didn’t rush this debt-turd through the House pronto, the economy would collapse while tens of thousands of corpses would be stacking up in cities across the country. Of course the reason they believed this nonsense was because the goofy infectious disease experts confidently assured everyone that the body-count would be “in the hundreds of thousands if not millions.” Remember that fiction? The most recent estimate is somewhere in the neighborhood of 60,000 total. I don’t need to tell you that the difference between 60,000 and “millions” is a little more than a rounding-error.
Maybe they should have talked about that in congress before they voted for this trillion-dollar turkey? Maybe they should have thought a little more about how the money should be distributed: Should it go to the people who actually buy things, generate activity and produce growth, or to the parasite class that blows up the system every decade and drags the economy down a black hole? That seems like something you might want to know before you pass a multi-trillion dollar bill that’s supposed to fix the economy.
What readers need to realize is that the Treasury has accepted the credit risk for all of the loans that default. In other words, the American people are now on the hook for 100% of all of the loans that go south, and there’s going to be alot of them because the banks have no reason to find creditworthy borrowers. They get a 5% cut off-the-top whether the loans blow up or not. And, that, my friend, is how you incentivize fraud which, as Bernie Sanders noted, “is Wall Street’s business model.”
It also helps to explain why Trump has repeatedly rejected congressional oversight of the various bailout programs. He’s smart enough to know a good swindle when he sees one, and this one is a corker. The government is essentially waving trillions of dollars right under the noses of the world’s most ravenous hyenas expecting them not to act in character. But of course they will act in character and hundreds of billions of dollars will be siphoned off by scheming sharpies who figure out how game the system and turn the whole fiasco into another Wall Street looting operation. You can bet on it.