According to the Wall Street Journal, Bank of America (NYSE: BAC) is offering to repay part of the government bailout money it received last year, and the U.S. isn't ignoring the offer.
Supposedly, the U.S. wants the bank to pay at least $500 million in order to stave off a pact that would result in the government losing on certain assets. People familiar with the matter classify the moves as an "extra measure" of federal aid for Bank of America in order to complete its acquisition of Merrill Lynch. Supposedly, both sets of the discussions would allow Bank of America to "reduce a layer of federal involvement in its affairs."
So, let's allow a bank that needed TARP funds and owes the government billions of dollars to get by with just paying $500 million. Why couldn't these people have been in charge of my student loans? The bank only wants to repay the $20 billion it received as incentive to take over Merrill ... none of the TARP funds would be repaid -- yet? Reportedly, this is a two-step process, that would include a second payment that could return $25 billion in funds originally doled out as part of TARP. I hope so, I would hate to think that the government would have lent money with no hopes of having it paid back. Of course, sillier things have been done by the government.
This reminds me of a quote that I saw a few days ago and my wife asked me about, "The problem with socialism is that eventually you run out of other people's money to spend." Does this apply here? Somewhat, as most of America will say that it was their tax money that was spent to bailout the banks -- and they would be right. This money has to be paid back, right? I mean the government isn't just giving away money, are they?
I have had faith in the government in the past, but I would be lying if I said I wasn't losing faith. Please make Bank of America pay back the money, or take over my debts -- one of the two.
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Reader Comments (Page 1 of 1)
9-01-2009 @ 1:33PM
Dan Barnett said...
Mark,
You can ask the Fed. Govt. to take over your debts when they force you into making lousy deals like they did when forcing BAC to complete the Merrill deal after it was apparent to all that Merrill valuations were more imagination than accounting.
Also for an article allegedly about BAC re-paying money; you spend alot of time talking about bail-outs and taking money from the Govt. BAC is paying the TARP funds back. That should be good news to you. The TARP funds did what they were meant to do; i.e get BAC & others over the tough times.
9-10-2009 @ 7:07PM
howaboutthis said...
At least BAC is starting to repay back some of the money. I don't expect them to be able to repay it all in 1 time.. but this is definitely a step in the right direction. Cause I rather them repay a little the 1st time instead of a hugh sum.... so BAC does not have to come back later asking for more help.