Forums - Politics Discussion - USA to break even on bailouts

Rath said:

http://www.bbc.co.uk/news/business-17720012

 

 

The US will make a profit from bailing out the nation's banks and carmakers at the height of the financial crisis, the Treasury Department has said.

The bank bailouts may result in a return of $2bn (£1.3bn), the Treasury said in its latest projections for the government's response to the crisis.

And the recovering auto industry has added 230,000 jobs as a result.

The recession was the worst since the Great Depression and $19.2tn of wealth was wiped out, it said.

"Although the economy is getting stronger, we have a long way to go to fully repair the damage the crisis has left behind," the Treasury said.

"We are still living with the broader economic cost of the crisis, which can be seen in high unemployment."

The vast majority of the projected returns - more than $179bn - come from the Federal Reserve's huge investments and loans to banks.

The Fed and the Treasury together invested $182bn just to save insurance giant AIG.

Tarp

In terms of the bank bailouts, the much-maligned Troubled Asset Relief Program (Tarp) that provided money to more than 700 banks has already realised a $19bn profit.

The bailout of carmakers General Motors and and Chrysler - which was also part of Tarp, cost $22bn, the Treasury said.

"But the cost of a disorderly liquidation to families and businesses across the country that rely on the auto industry would have been far higher," it added.

The US Treasury still owns more than 30% of GM's ordinary shares.

In the end, the Treasury expects to make $22bn from Tarp's bank bailouts and $2bn on Tarp's loans to restart the credit markets, offsetting the auto bailouts.

 

 

 

So it stopped the collapse of their banking/car industry and ended up not costing the government money.

This was bullshit by the government to self support itself with the reserve contiueing the ridiculous banking regulations that will continue.  Also they saved the auto manufacturers because big oil is such a generous campaign sponsor.  If the auto makers would have suffered their own consequences, electric cars and small electric car manufacturers would have prospered greatly in the results of the auto industry heavyweights being out of the picture.  The bail outs were for nothing but self preservation of the government and politicians in their regular daily lives and business.  They bailed out their own futures from collapse.

The American people were deprived of a brighter future with electric cars having a bigger presence and banking conglomerates going away to make room for the smaller banking institutions to develop like always in their support of small and minority business owners.



Consoles owned: NES, N64, PS1, GC, PS2, Wii.

Currently playing...

COD:BO GE007 Conduit2 SpyBorgs ST:BH MA:GitS

Around the Network
wiifan75 said:

This was bullshit by the government to self support itself with the reserve contiueing the ridiculous banking regulations that will continue.  Also they saved the auto manufacturers because big oil is such a generous campaign sponsor.  If the auto makers would have suffered their own consequences, electric cars and small electric car manufacturers would have prospered greatly in the results of the auto industry heavyweights being out of the picture.  The bail outs were for nothing but self preservation of the government and politicians in their regular daily lives and business.  They bailed out their own futures from collapse.

The American people were deprived of a brighter future with electric cars having a bigger presence and banking conglomerates going away to make room for the smaller banking institutions to develop like always in their support of small and minority business owners.


On another note, the government should have given us all that money so we could have bailed out ourselves from all the debt that we owed all those banks and auto notes.  And let those industries still fix themselves.  America is about freedom and fairness.  Who is bailing out my small business that employs over 40 people during this down economy.  No bank is loaning me money and I still have to pay my vehicle expenses and the higher costs of fuel and all other fees in order to continue.  If a business fails, something else the same or better comes into the picture.  America wasn't saved.  If a business, no matter how large, runs itself into the ground, then it should have been left alone to fail.  That gap would have been filled by other and better businesses that would have grown to employ all those unemployed people.



Consoles owned: NES, N64, PS1, GC, PS2, Wii.

Currently playing...

COD:BO GE007 Conduit2 SpyBorgs ST:BH MA:GitS

thismeintiel said:
Kasz216 said:

Ah duh. Probably should explain that.

They're claiming a profit essentially because federal reserve excess funds are greater then the projected.

So there claims of profit aren't actually based off of TARP but over what is "projected" economic bonuses that allowed the Federal Reserve to make more money off of it's usual stuff.

Since the Federal Reserve tends to make an excess profit and pass that along to the government. (Despite conspiracy theorists claims that the Fed is owned by banks.)

The biggest issue with it is well... Economic models quite honestly suck 90% of the time.  Your lucky if they're remotley accurate... as can be seen by the fact that the same economic model completely overestimated the effect of the stimulus.

So basically they are basing this on a few billion extra the Fed might make, as opposed to the government making back the 1T+ spent on bailouts?

They're saying that the sale of the banking institutions and car values that were bought by the government (which was what the bailout essentially did) is going to generate more money than was spent on buying them. Net profit.

 

@Wiifan. If any of the big banks (or Fannie/Freddie) had failed they would have brought the others down with them. The entire system is tied together. Total economic collapse is not really that healthy.



I'm sorry, but if you actually look at either program the typical American got screwed ...

In the auto bailout Bondholders (also known as retirement funds) were illegally wiped out to protect the interests of big labour; and in the bank bailout financial executives were protected from the consequences of their mistakes while the typical American home owner was allowed to continue suffering.

Even with screwing typical Americans, this is still just an accounting "trick" to hide the truth from fools.

If I printed $100 and loan you that for a few years.
Then you pay me back $90. I've profited $90.

Around the Network
Galaki said:
If I printed $100 and loan you that for a few years.
Then you pay me back $90. I've profited $90.


What? You'd have lost $10?

This is more like being paid back $101. They're getting back a tiny amount more than they put in.



Rath said:
Galaki said:
If I printed $100 and loan you that for a few years.
Then you pay me back $90. I've profited $90.

What? You'd have lost $10?

This is more like being paid back $101. They're getting back a tiny amount more than they put in.

No, I didn't lose any.



wiifan75 said:
Rath said:

http://www.bbc.co.uk/news/business-17720012

 

 

The US will make a profit from bailing out the nation's banks and carmakers at the height of the financial crisis, the Treasury Department has said.

The bank bailouts may result in a return of $2bn (£1.3bn), the Treasury said in its latest projections for the government's response to the crisis.

And the recovering auto industry has added 230,000 jobs as a result.

The recession was the worst since the Great Depression and $19.2tn of wealth was wiped out, it said.

"Although the economy is getting stronger, we have a long way to go to fully repair the damage the crisis has left behind," the Treasury said.

"We are still living with the broader economic cost of the crisis, which can be seen in high unemployment."

The vast majority of the projected returns - more than $179bn - come from the Federal Reserve's huge investments and loans to banks.

The Fed and the Treasury together invested $182bn just to save insurance giant AIG.

Tarp

In terms of the bank bailouts, the much-maligned Troubled Asset Relief Program (Tarp) that provided money to more than 700 banks has already realised a $19bn profit.

The bailout of carmakers General Motors and and Chrysler - which was also part of Tarp, cost $22bn, the Treasury said.

"But the cost of a disorderly liquidation to families and businesses across the country that rely on the auto industry would have been far higher," it added.

The US Treasury still owns more than 30% of GM's ordinary shares.

In the end, the Treasury expects to make $22bn from Tarp's bank bailouts and $2bn on Tarp's loans to restart the credit markets, offsetting the auto bailouts.

 

 

 

So it stopped the collapse of their banking/car industry and ended up not costing the government money.

This was bullshit by the government to self support itself with the reserve contiueing the ridiculous banking regulations that will continue.  Also they saved the auto manufacturers because big oil is such a generous campaign sponsor.  If the auto makers would have suffered their own consequences, electric cars and small electric car manufacturers would have prospered greatly in the results of the auto industry heavyweights being out of the picture.  The bail outs were for nothing but self preservation of the government and politicians in their regular daily lives and business.  They bailed out their own futures from collapse.

The American people were deprived of a brighter future with electric cars having a bigger presence and banking conglomerates going away to make room for the smaller banking institutions to develop like always in their support of small and minority business owners.

Chaos speeds change, to be sure, but... it's chaos. The balance between stability and freedom is something that needs to be carefully maintained so that natural liberties are preserved as much as possible, but so that we can also be afforded a measure of comfort and peace in our lives. That's why you need free market controls in many cases. The harder part, however, is fighting these institutions that were necessarily conceived in hard times and prevent them from overstaying their welcome, which also occurs in market and labor regulations. The problem is too many special interests and not enough generalized leadership.



New Smash, New Mains

Werewolf Bar Mitzvah, Spooky Scary

Rath said:
thismeintiel said:
Kasz216 said:

Ah duh. Probably should explain that.

They're claiming a profit essentially because federal reserve excess funds are greater then the projected.

So there claims of profit aren't actually based off of TARP but over what is "projected" economic bonuses that allowed the Federal Reserve to make more money off of it's usual stuff.

Since the Federal Reserve tends to make an excess profit and pass that along to the government. (Despite conspiracy theorists claims that the Fed is owned by banks.)

The biggest issue with it is well... Economic models quite honestly suck 90% of the time.  Your lucky if they're remotley accurate... as can be seen by the fact that the same economic model completely overestimated the effect of the stimulus.

So basically they are basing this on a few billion extra the Fed might make, as opposed to the government making back the 1T+ spent on bailouts?

They're saying that the sale of the banking institutions and car values that were bought by the government (which was what the bailout essentially did) is going to generate more money than was spent on buying them. Net profit.

 

@Wiifan. If any of the big banks (or Fannie/Freddie) had failed they would have brought the others down with them. The entire system is tied together. Total economic collapse is not really that healthy.


That doesn't look like what the actual slides say.  I think it's a matter of your recap just getting things wrong.

Worth noting too they've excluded about 46 billion in bailout funds on the basis of "Not meant to be recovered." and  in general counts zero stimulus measures.

I'd suggest reading the actual source material.   Again...

http://www.treasury.gov/resource-center/data-chart-center/Documents/20120413_FinancialCrisisResponse.pdf

Each slide seems to have it's own asterick to make itself look good and count things such as US treasury bond buys.  Which are well... silly... because the tax payers don't actually win out on US taxpayer bonds.  Since US taxpayer bonds are paid by US taxpayers.

 

Or at least some better reportered articles on the matter

http://blogs.wsj.com/economics/2012/04/13/treasury-taxpayers-likely-to-profit-from-financial-rescue-programs/

http://www.bloomberg.com/news/2012-04-13/treasury-says-crisis-stability-programs-expected-to-break-even.html

 

It's a small selection of a bigger issue that's been selected and presented with not a small amount of trickery to make things look good.  It's a puff politcal piece to gear up for election season.

You've more lr less been had.



Around the Network
I heard on the news a few months back that the real amount of the bailout was in the 7trillions was that some spin or what??