These guys just don’t get it.
Economics 101. Corporations don’t pay taxes. If the government applies fees to banks to try to recover the shortfall in reimbursements for TARP, banks will have no choice but to pass those fees along to their customers. It’s simple. Americans will be paying the TARP shortfall.
The Obama Administration will claim that this money is going back to the American People via deficit reductions. Does anybody really believe that taxpayers will get their money back? Do you think they’re going to write us checks? Has anybody been paid back out of the billions that have already been recovered? Of course not, those funds weren’t even applied to paying down the deficit. Our Washington politicians can’t help themselves. Unspent money is better used, in their eyes at least, in earmarks and other vote buying schemes. This is nothing more than an indirect tax and the people pushing it know it.
We are in this mess now. There’s no getting out of it without the taxpayers footing the bill. How about we educate the American People that don’t get it by a direct tax on every person in the country that has an income? Maybe then people will start to understand the irresponsibility that got us here.
But then again, our politicians would probably attempt to keep those Americans who don’t pay taxes (almost half the country) from having to pay this direct tax. That would defeat the purpose. The consequences of getting into a loan that you know you can’t afford should be paid by those who did it. If these people are immune to the consequences then why should they care?
Forget making it an income tax. Most people have their income tax taken directly from their paychecks so they don’t actually understand what they are paying. Divide it out and send everybody a bill. Seeing that number on a piece of paper may finally open people’s eyes.
To blame banks for this mess is to ignore the fact that our government controls the actions of our banks through extremely rigorous regulation. Who put our government into place? We did. It’s the American People’s fault. To say that it’s the Democrats or the Republicans fault is even more disingenuous. Our government encouraged irresponsible lending and borrowing through Fannie Mae and Freddie Mac and through the Community Reinvestment Act and other federal programs that created the bubble in the first place. The CRA and all these other programs existed under both Republican and Democrat administrations. We elect these guys to make the laws, it’s our responsibility to take responsibility for it.
Try voting for a politician that doesn’t manipulate our financial system for political gain and we should be able to avoid these scenarios in the future.
Wall Street Journal article covering the story.
