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In a press event in New Hampshire, President Obama called for $30 billion of returned TARP funds from bigger banks to be put towards a lending fund for smaller banks to go to small businesses, a suggestion that was immediately criticized by Republicans who want to put the money towards paying off the deficit. In my opinion, the move was the right one to make last year, and it’s just not enough to help out right now.
Since the initial bailouts back in Bush’s last year, and even more so in the ones done by Obama of banks and auto companies, a big criticism has been that the money would have been better served going to help out people and smaller businesses in the first place, such as creating a personal debt relief fund. Personally, while I dislike needless government spending, If the government had been required to give money to any private person or group, it should have been to the people, either directly or indirectly through a small bank fund like Obama is suggesting. Artificially propping up bigger institutions may stop the initial trouble, but it doesn’t always treat the cause of the problems; banks took most of the year to get back to earlier lending levels, thus preventing the money from truly being introduced to the economy. Individuals could have used the money to help pay off the debts that they had mounting, especially the foreclosures which dominated the national attention when the first TARP was passed. Small businesses could have paid their debts and redesigned themselves to take on extra workers, nipping the growth of unemployment in the bud. Trying to boost money available for “job creation” now could be helpful to fighting unemployment, but it would have seemed more sincere if it had been at least Obama’s first policy move. Of course, Bush was partly to blame for this mess, as well; even I can admit that. The first TARP was his policy, after all. However, many of the people who passed it through Congress are still there today, making the problem a bipartisan one. Until someone takes account for the first round of failures, I’m not sure I want to trust my money to another scheme.
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