December 14, 2009

Wrong About Something Else

I wrongly predicted that most of the money spent by both the Bush and Obama Administrations bailing out the big banks would not be paid back.  This appears to have not turned out as I had predicted.  Of the many things I've written about, this is one that I'm particularly glad to have been proven wrong about.

The question then becomes, what should be done with the money when it is paid back?  (It won't be paid back all at once, of course.)  The answer should be obvious -- now that the financial affairs of the pillars of our economy are in some kind of order; this money should be used to get the government's finances in order.

Let's use repaid stimulus, bailout, and TARP dollars to reduce the deficit or buy back the national debt.  Nothing else.


Libertarian Advocate said...

Burt: It would be one thing if the "money" was real, but in fact we used funny money (debt) to bail out the banks so, in effect we aren't really getting back hard currency to spend on paying down the debt.

We would just be canceling $650 Billion of debt, against a total debt of what now appears to be about 12.2 Trillion per the rapidly escalating Debt Clock you have embedded in your front page. Also, I read this morning on Drudge that the Administration is now looking to raise the debt ceiling by yet another $2 Trillion.

Burt Likko said...

The debt clock is pretty much correct. Cancelling $650B of debt would reduce that $12.2T to $11.55T, and that would be better than just letting it increase.

The debt ceiling is already $13.5T, and health care reform is probjected about about $1T -- what does Obama need the extra money for?

Friendly Technocrat said...

I agree that this money being 'paid back' is not even real money. It's borrowed money. We can't do anything with it except un-borrow it.