You are correct that that was the original intent. But Paulson quickly
changed course. To my knowledge, none of the TARP has yet been used to
purchase the troubled assets. It has all gone to AIG, BofA, CitiBank,
etc, and lately Detroit. But those were all loans or preferred stock
purchases (same as a loan, in that the banks will buy them back when
solvent). Why do you think the right is screaming Socialism; because the
US is now a major owner in those enterprises. I think I heard the US has
a 6% stake in BofA, the largest creditor.
The TARP may yet be used for troubled assets, if you listen to Barney
Frank and Obama. But the Republicans have had a sudden conversion to
fiscal responsibility (easy, when you don't hold the purse strings) and
will probably fight it.
Jeff Wright wrote:
Again, TARP was a loan, Economic Recovery Package is spending.
It's all spending and TARP is not a loan. It's an outright purchase
"troubled" assets and equities. It's also a blank check for the POTUS and
Treasury Secretary to spend on any damn thing they want.
http://en.wikipedia.org/wiki/Troubled_Assets_Relief_Program
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