The $700 Billion Revolving Credit Account
You may be aware that one of the last acts of the Bush administration was to pass TARP (Troubled Asset Relief Program) legislation. This legislation was too quickly passed in the fear of the moment with banks teetering on the brink of failure. The idea was to provide a fund from which the Treasury Secretary could provide temporary cash to banks which had (on Barney Frank’s orders) given mortgages to people who couldn’t pay them back; or which had invested in bundled mortgages as derivatives.
What you may not know is how this corrupt legislation will interfere with freedom for all Americans. Here’s how it works:
TARP money comes from tax dollars Americans pay to the federal government; except since our government spends anywhere from $1.10 to $1.50 for every $1.00 it receives in the form of taxes, this money had to be borrowed. (These tricks are performed by trained experts: DO NOT TRY THIS AT HOME!)
So when I say that TARP money is from taxes, it really probably isn’t – it is actually borrowed from the communist Chinese government; and wealthy Saudi Arabian, Russian, and other oil oligarchs. Nevertheless through TARP the government creates a drawer full of money - $700 billion dollars – so Treasury Secretary Geithner can use it as he will.
The trouble with TARP
First, Bush used $17.4 billion of TARP money to give to General Motors. That was illegal because money from the U.S. treasury must be spent on what the enabling legislation permits it to be spent on. (Article 1, Section 9 paragraph 7)
Next, Mr. Obama gave GM another $65 billion, gave some to Chrysler, and a bunch more to hundreds of suppliers like Borg Warner. All of it illegal. So since the precedent is set and no one will stop them, the Executive Branch will give it to anyone they like.
Note: at this point, the federal government has controlling equity positions in Chase Bank, AIG the insurance giant, General Motors, and Chrysler, and a large number of smaller companies.
You probably already know all this, but here’s what you probably didn’t realize: TARP loans – usually secured by equity in the form of stock in these companies – are supposed to be repaid.
Here’s the kicker; let’s say that $50 billion in TARP loans is paid back to the federal government, it goes into the general fund. But through an accounting procedure which was part of the TARP legislation, the $50 billion shows up as a credit back in the TARP fund! So if TARP has loaned $500 billion of $700 billion with $200 billion remaining; and then $50 billion is paid back, the $50 billion isn’t relief for the taxpayers who have to pony up the $700 billion. Noooo, it goes back into the TARP fund – now back up to $250 billion – so the Treasury Secretary can loan it out to any company he wants keeping the process going.
There is no end to this program, no circumstances under which it will end. You can see Treasury Secretary Timothy Geithner explain it to you. We got taxed $700 billion plus interest (that will go on forever), to create a slush fund so the federal government could support companies they like, and kill companies they don’t. Keep in mind that the administration refuses to act constitutionally and loan the money only to financial institutions. Since no one has stopped them, they are completely free to use $700 billion in tax dollars to manipulate not only the companies and their products; but also which companies get money and which don’t. There are no criteria whatsoever for who gets money and who doesn’t – that is left entirely up to one man - Tim Geithner – leaving the whole thing open to massive fraud.
What’s this got to do with your freedoms? Everything. First, there is no Constitutional basis for loaning any private company federal dollars, so the whole TARP thing is unconstitutional. But if we grant that something had to be done to save certain banks, then it would certainly be unconstitutional to spend TARP money on any company that wasn’t a financial institution which the legislation required, and much of it has been spent on manufacturing companies, supply companies, insurance companies, and others. If the government can get away with acting unconstitutionally regarding Article 1, Section 9 paragraph 7 of the constitution; it can get away violating any other part of it: denying you protection from an illegal search for example, or the right to practice your religion; it might want for you to not carry a gun, speak out against the government, or to assemble peaceably to petition the government for redress of grievance. Every right you have in the Constitution is, in the Obama administration, negotiable.
Second, this administration and all future administrations now have almost a $700 billion slush fund they can use to treat companies differently based on whether they are political allies or not, whether they are unionized or not; or based on whether the owners support liberals or conservatives; even based on whether a given company might provide competition to a political supporter. This means that any company disposed to support your opponents in politics may be driven out of business because a Treasury Secretary chooses to help a competitor. For example if GM makes cars no one wants, and Ford is doing well, the government – looking out for it’s own interests as an owner of GM stock- could drive Ford out of business by financially supporting GM.
We must speak out. We must Comment on blogs, call our Representatives and Senators, write letters to the editors, and articulately speak to people we know and make them aware of what’s going on. So get with it; start now. Subscribe to www.cultureandfreedom.com and get the Posts sent to your email so you stay informed. We probe beneath the news and cut through the rhetoric. Our goal is not to cover every bit of exciting news; rather it is to help prepare you to discuss what’s really at stake, and the stakes could not be higher than they are right now.