by Jerome Armstrong, Thu Nov 19, 2009 at 05:53:26 AM EST
The spintasic idea of using the remaining TARP money to payoff a part of the deficit is being laid at Geithner's feed, as his idea.
Dean Barker points out that this is a gimmick:
A loan is expected to be paid back. When Congress appropriates money for a loan, it does not add to the deficit. The government lends out money, but it owns a loan that it expects to be paid back. The only cost to the government is either any subsidy implicit in the loan or the losses on loans that are not repaid.
The Congressional Budget Office expected the bulk of the TARP money to be repaid, therefore it was never scored as spending. Only the expected losses were scored as spending. Therefore, the Obama administration cannot use unallocated or repaid TARP funds to pay down the debt -- that is what CBO always assumed would be done with the TARP money.
It's a nice trick to claim this, but serious news outlets should not let them the Obama administration get away with such silliness.
Update [2009-11-19 11:4:28 by Jerome Armstrong]:
The thing I like about when politicians get trashed and thrown into the gutter, losing everything, is that when they get back up, they tend to be a bit more honest. Case in point, Eliot Spitzer: Obama Economic Policies Ineffective, A Continuation Of Bush: