I can't tell if this is an Obama decision or a Bush decision, but Hank Paulson is trying to tell us that they're going to save some of the $700 billion stimulus package for the next president.
Some $290 billion of the first $350 billion authorized under the program already has been used or committed for use, and Paulson said he wanted to reserve the balance of it for the incoming administration of President-elect Barack Obama, who takes office on January 20.
This smells funny.
My immediate take: This is the Bush administration (and congressional GOP) trying to push responsibility off on "the Democrats" for any TARP funds used to bailout needy homeowners at risk of foreclosure.
Now, personally, I am a fiscal libertarian and believe in the power of free and fair trade. I believe that regulations ought to be placed on banks and businesses - so that there is no "blank check" written to our businesses. If you're going to do that kind of "bailout blank check," it needs to be given (IMHO) to ALL Americans, regardless of age or income, or in direct proportion to income. The basic principle should be some sort of fairness - not benefiting one group over another, but trying to deal lawfully and equitably with all.
(There is, by the way, an important difference between stimulus that benefits all regardless of income versus stimulus that is proportional to taxes paid. In this situation, I think the former is better policy due to the circumstances we're in and the unusual pressure felt by the consumers at the low end of the financial totem pole.)
Quite simply, Bushco depended on big business to grow, and for that growth to trickle down to consumers. But as Obama eloquently stated on the stump, "The pain trickled up." This worked in reverse. As consumers got pinched more and more, we've seen consumer debt rise to a point where consumers no longer have any money to spend. This has resulted in a precipitous drop in retail spending, which is causing businesses to feel the pinch, which is further pinching our financial and credit markets, which has basically frozen the whole economy worldwide.
What concerns me is the inaction of Bushco (and Paulson) in the face of this crisis.
People are hurting.
The longer we wait, the longer we hurt. And the longer we hurt, the more it hurts. And the more it hurts, the longer it will take for us to get out of this mess.
Now, perhaps the Treasury is not ready to act because they still need to deal with regulating the system. I'm ok with that. But we ought be talking about how this is going to work, rather than simply doing nothing.
I don't usually agree with Barney Frank, but in this case, he's right. Part of the TARP was specifically meant to help homeowners in crisis. Instead, we're bailing out banks and big business. That's wrong.
How to help:
Call your US Rep and Senator and ask them to demand Treasury to take action and present a plan.
Call the House Financial Services committee members, especially those in the GOP. Tell them that we need to help seniors, young working families, and the disabled and ill. This is no time for inaction, people.