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... wasted in the first stage of the bail-out ...

... because, after all, welfare for the rich is less effective as stimulus than welfare for everybody.

However, there is no $1.5b in stimulus. The TARP money was not stimulus, it was a financial bail-out. It ought to have been intended to prevent a complete collapse of the finance sector and assist the restructuring of the finance sector from egregiously expensive and grossly inefficient master of the productive and household sectors to a regulated utility providing essential services to the productive and household sector.

And of course because it was instead mostly spent trying to uncrack the broken eggs, the first half was mostly wasted, and much but not all of the second half will be wasted.

The Fed creation of money and playing 1990's commercial banking games with the national monetary authority ... that's also part of that same unholy mess.

The Stimulus is the $500b in government spending over 2 and a half years, or in other words $200b a year ... less than half the GDP accounts value for the cost of Federal defense spending.

As far as why the $200b a year should not be distributed on a per person basis ... because then we would get less stimulus per dollar added to the national debt to be serviced.

As to whether the $700b from the TARP would not be better distributed on a per person basis ... I just don't know. I wouldn't be surprised if the impact of handing the TARP money out to each person to either retire a debt or to establish a medium term (say, minimum three years) income earning deposit might not have more effectively directed the bail out to those financial institutions that are of some use to ordinary people.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sat Feb 28th, 2009 at 03:45:08 PM EST
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