We talk a lot about the lies this Administration tells about the economy, but last week, we got a whopper. Here's the president on the campaign trail talking about TARP.
“We got back every dime we used to rescue the financial system, but we also passed a historic law to end taxpayer-funded Wall Street bailouts for good. “
Every dime? I wish it were true, but unfortunately the taxpayer is still out of pocket on the bailout of the financial industry. Naturally, Fannie Mae and Freddie Mac lead the way. Together they owe taxpayers $140 billion, actually more.
Remember they were at the center of the mortgage meltdown, backing billions in loans that went bust. Not only have they not gotten around to paying us back, but they are now more important to the housing market than in the headiest days of the housing boom. Then there's the international insurance company AIG. We're still owed more than $2.5 billion from the nearly $69 billion bailout it got. Government motors, I mean General Motors, got more than $50 billion- a bailout this president is very proud of. GM still owes us more than half of that!
Ally Financial, formerly known as GMAC, has barely repaid anything. The company still owes taxpayers nearly $11 billion. Vhrysler has re-paid most of its bailout, but still owes us more than a billion bucks. Those are just the companies you've heard of. There are also a slew of companies you may not be familiar with: CIT group, South Financial Sterling Financial, Midwest Bank Holdings, Integra Bank Corp., and a lot of smaller banks that got caught up in the mess.
Here's the bottom line on our TARP spending, according to the folks at ProPublica: the government disbursed almost $604 billion to 926 recipients. A little more than half of that debt has been paid back-only about $343 billion. We are still owed almost $174 billion, four years after the crash.
The government has made some money on the deal for itself- some $87.3 billion, but I’d advise you not to look for it in your refund check. As we've seen, the money, or at least the biggest stakes, tend to go to cronies. Not you and me.
Case in point today: A123 Systems Inc., an electric car battery producer, filed for bankruptcy. The company received a $249 million grant as part of the $90 billion in stimulus that the president earmarked for developing green energy. Solyndra, as you will recall, is already in bankruptcy.
Here's the president back in April of 2010.
“A123 was one of the 48 companies to win a recovery act grant for advanced battery technology. That grant helped A123 hire 44 new workers. and that grant is supporting the construction of 3 new plants in the state of Michigan, which A123 expects will allow it to hire more than 120 workers by the end of this year, more than 1000 by the end of next year and more than 3,000 by the end of 2012. Today's news is another sign that we are on the right track
Whether its $90 billion for green energy or $604 billion to the financial sector, blanketing the country with taxpayer dollars has not fixed what ails us. It has not lifted our economy. It hasn't improved the fortunes of the middle class. 23 million of us are unemployed or underemployed. The proportion of Americans on food stamps recently hitting a new high, 3.5 years after the recession was supposed to be over!
Throwing money at a problem doesn't solve it. What we are missing is leadership!
The Willis Report with Gerri Willis investigates the top business stories, outs corporate scams and polices D.C. policy.