Skragnon's Blog

Tax the banks, we won’t pay for it.

February 6, 2010
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I’m driving home the other night and I’m thinking how a in mid-January the President was on the radio talking about how he intends to get the TARP money back from the banks who borrowed it. Except he wants to only go after the top 50 firms in the country (who apparently have paid back a large portion of the TARP money).

I did some digging and I find that 829 firms received TARP money.  50/849 comes out to about 5.9% of the firms that received TARP money will be assessed the “financial crisis responsibility fee”.

This didn’t sit well with me.

First because anyone who believes that corporations pay taxes doesn’t understand basic economics.  Taxes are a cost of doing business, and you pass the cost of doing business on to the end user (that would be the little guy putting $5 from his paycheck into the bank).

Second, because this really seemed to smack of a bill of attainder to me.  Not in a literal sense, I know that the government won’t pass a law saying these financial firms are guilty of treason, but in a figurative sense.  These firms are being turned into pariahs of the highest order by our government and the media in this nation.  They are being accused of being the only reason our economy took a nose dive at the end of 2008.  It was the banks that destroyed us, so now they must be punished!

By all that is holy, if the behemoth that is the US Federal government is not partially culpable then we need to walk over to the sink, turn the faucet on high (tepid water please) and place our face firmly underneath the stream to wash the cobwebs off.

I’m not an economist, I don’t play one on TV, but no bank is going to give a loan to a person who can’t pay it back unless there is a gun being held to their head.  Do some digging, it doesn’t take long to find a history and summary of what happened.  You might start to choke, so don’t have a drink handy while reading.

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.
Thomas Jefferson

If someone from the government showed up at your door, is your first response a racing heart beat?  Sounds like the fear is on the wrong foot.

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Posted in Banking, Politics

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