I have a question about TARP paybacks and the deficit.

[Vexatious Ape]

Since some of the major banks that got TARP money have begun paying back, BOA in particular, doesn't that considerably reduce our deficit?
http://www.themoneytimes.com/featured/20091203/bank-america-set-repay-tarp-money-id-1092981.html
If so, why isn't the news reporting it, or the talking heads yapping about it? Or am I missing something here.

[Bitwit1234]

1. It's good news for the democrats so

the MSM doesn't report it..now if it was good news for the republicans------

[MannyGoldstein]

2. It's Not A Large % of The Deficit

And it TARP probably doesn't even count as part of the deficit - there's probably some cool accounting tricks that were done.

In any case, TARP is only a small bit of the wet kiss given to the Bankers - the $13 trillion in loan guarantees for junk assets is astonishing in comparison.

[Zynx]

3. Indeed it counts against our deficit.

The TARP disbursements were counted toward the deficit. Repayments count against it. I hope they actually sit on this money for a little while in case the commercial real estate collapse brings the whole thing under again.

[HamdenRice]

7. The accounting would be interesting because technically it was an investment, not an expenditure

but I assume you are right. At the time, it looked like an investment that could end up being worth nothing, so I assume it was booked as an expenditure, and the payback is counted as revenue.

[Zynx]

12. In other forms of accounting, it would have not been counted as an expenditure.

The Federal Government does not have a capital budget, unfortunately. If it did, it could have gone there instead of in the general fund.

[SoCalDem]

4. Like pouring a cup of floodwater back into a still-flooding river

:(

[cbdo2007]

5. Why would they use that on the deficit? I'm sure it's being seen as a surplus and

will be spent on all the congresspeople's pet projects.

That was sort of the problem with the TARP is that most politicians don't really care about the deficit. Once the money was given to the banks it was pretty much written off as spent. One of them gives money back, then hey, that's a bonus that's probably not on the books somewhere.

[Vexatious Ape]

6. payback

I'm guessing the reason they would use that on the deficit is because it contributed to the deficit.

[cbdo2007]

11. Well, right. That would be the most logical thing to do with the money...

but these are our congresspeople we're talking about. I'm sure they'll just fine some use for the money that helps us in some other way rather than actually paying down the debt with it. The deficit is strange to our politicians because it isn't something that's "real". It's just a number and they see it as ok to have a deficit because it's money they used to help us all.

Let's say you win $1,000 in the lottery. Is it more fun to spend it on something or to send it to your credit card company to pay for stuff you bought 5 years ago? I'm sure there's stuff you really "Need" to spend the money on, cause you're tv is so old and stuff. Get my drift here?

[HamdenRice]

8. I believe it's revenue

Actually, I think at first it just goes back to the TARP fund and can be re-lent, and so isn't even general federal revenue. If the program winds down in surplus, TARP would turn the money over to the Treasury as revenue.

That's just my guess.

[MilesColtrane]

9. I've got a related question, if anyone knows the answer.

Anyone know how much interest the Treasury is getting back when this money is repaid?

[Vexatious Ape]

10. Good question

Bet the interest rate isn't even close to as high as some of the rates they slam on credit card holders.