What is $400 billion between friends? Recently, in this blog, I reported that the federal deficit for fiscal 2009 was $1.4 trillion. Well, I was wrong. Bernie Madoff has nothing on the U.S. Treasury Department when it comes to financial shenanigans. It turns out that our country's real deficit is closer to $1.8 trillion ... see The Real Deal. This was because our Government is treating bail-out funds as though they are not money down a rat hole ... kinda like the way Goldman Sachs, Morgan Stanley, et alii dealt with all their "investments" in Credit Default Swaps. This is not just irresponsible, I think it may well be criminal. If Geithner can't figure out his personal income taxes, how can we expect him to keep our federal finances straight? I predict that Obama, on his up-coming visit to China, might have to bob and weave through this deficit legerdemain over his King Pao chicken.
Friday, November 13, 2009
Deficit Hawk
What is $400 billion between friends? Recently, in this blog, I reported that the federal deficit for fiscal 2009 was $1.4 trillion. Well, I was wrong. Bernie Madoff has nothing on the U.S. Treasury Department when it comes to financial shenanigans. It turns out that our country's real deficit is closer to $1.8 trillion ... see The Real Deal. This was because our Government is treating bail-out funds as though they are not money down a rat hole ... kinda like the way Goldman Sachs, Morgan Stanley, et alii dealt with all their "investments" in Credit Default Swaps. This is not just irresponsible, I think it may well be criminal. If Geithner can't figure out his personal income taxes, how can we expect him to keep our federal finances straight? I predict that Obama, on his up-coming visit to China, might have to bob and weave through this deficit legerdemain over his King Pao chicken.
I also just read that Geithner also plans to use TARP funds to reduce the federal budget deficit. In other words, we are going to borrow money to reduce the amount of money we must borrow. Wha??
ReplyDeleteAren't companies starting to pay back the bail-out money?
ReplyDeletehttp://money.cnn.com/2009/11/16/news/companies/gm_results/
Let us see ... Goldman Sachs did pay back its original $10 billion of TARP funds in June. However, last January it got $13 billion of additional taxpayer money in a pass-through from AIG (which it doesn't have to pay back).
ReplyDeleteIt also changed its charter to become a "bank" even though it doesn't accept deposits or make bank-type loans. This means it can borrow money from the Federal Reserve at essentially no interest which it can then turn around and speculate on in the commodity market and in Credit Default Swaps (again).
It is also expected to pay out almost $20 billion of bonuses this December to its employees.
The fact that Goldman Sachs was the second biggest contributor to Obama's campaign has nothing to do with the U.S. taxpayers lavishing such largess on these fat cats.