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<p>[QUOTE=&quot;NorthKorea, post: 1300278, member: 29643&quot;]When I said it isn&#039;t a problem of the US gov&#039;t, I didn&#039;t mean it isn&#039;t a problem FOR the US gov&#039;t. I meant that the US gov&#039;t didn&#039;t create the problem. I fully agree that the problems created by the private sector are a burden upon the US gov&#039;t and broader economy. I meant to say that it wasn&#039;t CAUSED by the US gov&#039;t, as people seem to be intent on believing.</p><p><br /></p><p>TARP/TALF was basically a way for Obama to repay his political backers. This is pretty straight-forward. Yes, the Big Three could have been allowed to fail, but Obama had promised the auto unions that he&#039;d save their jobs. Arguably, the US investment in GM is a failure (and if you take the most liberal approach of accounting for tax revenues generated from plant workers and social spending implied therein, you get, at best, a wash). But, let&#039;s be honest with ourselves, TARP/TALF created enough smoke and mirrors to float the stock market through what would have been a run on banks many times worse than the Great Depression. Some argue that the US gov&#039;t, even if it makes a profit on TARP, won&#039;t be rewarded for the risk it took on the investments. I disagree with that. Thanks to the bailouts, the DJIA effectively bottomed at ~8000 points. Yes, I&#039;m aware that it got as low as 6600, but that was during a three month &quot;bottoming&quot; that only someone trying to time the market would consider a bottom. Yes, TARP/TALF/PPIP benefited the top-1% of Americans, but it also benefited the retirement portfolios of the &quot;99.&quot; Without TARP/TALF/PPIP in place, the &quot;99&quot; would have been hurt by bank failures and economic collapse, with a DJIA bottom closer to that indicated by the Great Depression. Basically, we would have seen a bottom closer to 4500 points, and a secondary dip into the 800-3000 point range. The greatest threat to a money supply is fear. Fear results in hoarding and pessimism. If it cost the US gov&#039;t $1T to stymie fear, so be it. That subsidy is a small price to pay compared to the potential loss of $11T in US market capitalization we would see if the gov&#039;t didn&#039;t step in.[/QUOTE]</p><p><br /></p>

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