[lbo-talk] "The bailout returned a profit for the US taxpayer!"

[Max Sawicky]

Forgive the econo-wonkery, but a literal return on a loan is not really a
profit insofar as the loan is provided at below market rates.  In that case
the return or 'profit' is negative.  Even with a market rate, an included
loan guarantee still implies a subsidy.  (Without the guarantee, the
borrower would demand a higher interest rate.)  If the borrower could afford
market rates w/no guarantee, then there is no rationale for the Gov to make
the loan.

Of course, getting back more than you put out looks good and the subtleties
above are lost on many people, especially politicians and journalists.

I haven't looked at the numbers so I couldn't say how the Federal programs
shake out from this standpoint.

On Fri, Oct 21, 2011 at 10:18 AM, Alan Rudy <alan.rudy at gmail.com> wrote:


> A limited, vulgar and liberal response could be made as follows (chosen to
> stay within that person's frame of reference... a radical response would be
> just a tad different):
>
> I'd imagine that the person was referring to the bank bailout and the way
> that the banks paid the US treasury back, as fast as they could and with
> interest... anything to get out from a potentially renewed regulatory
> terrain.
>
> Of course, this utterly and completely brackets all other forms of costs,
> such as the collapse of the housing market, the effects of the recession,
> the damage to pension funds, the accelerated rate of the reduction and
> elimination of employee health benefits, the resultant local, state,
> federal
> and industrial cost-cutting, the collapse of the job market, etc.
>
> When the US people are paid back for those things, then, maybe, the US
> people will have been partially repaid.
>
> A
>
> On Fri, Oct 21, 2011 at 9:51 AM, Adam Proctor <proctorvt at gmail.com> wrote:
>
> > The first question I would ask is: which bailout?  The second thing I
> would
> > say is, "Sir/Ma'am, there is no way to get back a sum total which is MORE
> > THAN US GDP with interest.  It's economically and fundamentally
> impossible.
> >  Read more here from my friend "Petrino diLeo":
> > http://socialistworker.org/2011/09/07/the-16-trillion-bailout   This is
> > some
> > of the best analysis around on the bailouts.
> >
> > -A
> >
> >
> >
> >
> > On Fri, Oct 21, 2011 at 9:40 AM, Rick <cr70814 at verizon.net> wrote:
> >
> > > I heard someone criticize the Occupy Wall Street-ers for complaining
> > about
> > > the bailout a few years ago: "Aren't you aware that the bailout
> actually
> > > returned a profit for the US taxpayer?"  Can someone comment on the
> > veracity
> > > of this claim?
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>
> --
> *********************************************************
> Alan P. Rudy
> Assistant Professor
> Sociology, Anthropology and Social Work
> Central Michigan University
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