Wednesday, January 28, 2009

More Bank Bailout

If I have said it once, I have said it a hundred time, when you start giving away money, the recipients will keep coming back for more.
Major U.S. banks are still hemorrhaging red ink, despite massive taxpayer aid, and President Barack Obama is under pressure to take a high-stakes political gamble -- asking for another bailout.

Whether he would get one from a skeptical Congress is unclear, given the wide dissatisfaction with the first bailout, known as the Troubled Asset Relief Program, or TARP, a $700 billion fund to stabilize the banks and Wall Street.

The political danger of backing another aid package was vivid on Thursday when the House of Representatives voted 270-155 against releasing a second allotment of $350 billion to the TARP. The money will be released, nonetheless, because the Senate previously voted not to block the funds.

With the most recent TARP vote as a backdrop, analysts said that, if Obama sought more bailout money and Congress approved it, financial markets and bankers would certainly be pleased.

But lawmakers who voted in favor of such a program could pay a high price with voters in elections two years away.
Quite frankly, we cannot buy our way out of this fiscal crisis. Yes, steps should be taken to minimize the impact on innocents, but we are probably going to have to ride this one out on a different plan.

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