So the news this week has been about how a number of the big banks have paid back their TARP loans early. Also there are a lot of TARP funds that never got dispersed. I think it comes up to something around $200 Billion.
Wednesday, December 09, 2009
The Obama administration and Congressional leaders of both parties are lining up their plans for this supposed windfall. Corporate interests want it to be used to offset a cut in the corporate tax rate. Democrats want to use it for another round of stimulus spending aimed at things like green technology, infrastructure and jobs creation.
I think both ideas are flawed. The complaints about corporate tax rates are a constant. They'd complain if it were only 1% and if it were 0% they'd insist on subsidies. The stimulus idea is politically driven by the need to appear to be doing something until the economy gets better. The problem there is that the first rounds of stimulus are still being dispersed and the economy appears to be on the right track already. So spending another $200 Billion could end up being overkill.
We should use the money to pay down our deficit. We borrowed it in the first place and while $200 Billion would be a small portion of the overall deficit, it would help. We're spending money left and right. For the most part, I think that spending is justified. I'm not some ideologue who thinks deficit spending is socialism or that government doing anything at all means that the next step will be that they put me in a concentration camp. But I do think that it is reasonable to argue that if we find that we borrowed a little more than we thought we needed, we should pay down the loan with the extra money.
Posted by Raised By Republicans at 5:20 AM