I somehow missed this article from Forbes over the weekend. Apparently, with the banks stabilized, the Treasury is considering handing out some of the remaining $700 billion in the "TARP" bailout funds to bail out small businesses. Forbes reports:
Under the proposal, the administration would use money from the Trouble Asset Relief Program, or TARP, to expand a Small Business Administration program for small-business loans.
It's kind of amazing how these funds have evolved. As the excerpt noted, TARP actually stands for "Troubled Asset Relief Program." Instead of the originally intended program seeking to buy ugly assets from banks, the Treasury decided to essentially give them big loans instead. Then they decided to expand who could get it, considering insurance companies, credit card companies and of course auto companies. Now it looks like even small businesses are welcome to party under the TARP.
And the Public-Private Investment Program -- the closest thing to the intended Troubled Asset Relief Program -- is limping out of the gate. But hey, if you've got $700 billion, you might as well spend it right?
That was the Treasury's attitude. As a result, I find how Congress and both the Bush and Obama administrations treated this $700 billion slush fund completely appalling. The Treasury having the discretion to do pretty much whatever they want with this magnitude of money probably deserves some constitutional inquiry. If Congress or the Obama administration wants to help small business, then by all means, they can do so. But they should do so through proper channels -- not by giving them money intended to stabilize the financial system.
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