Tuesday, 23 September 2008

TARP - Troubled Assets Relief Program

If you're a normal American; sensible, prudent, don't borrow more than you can afford to repay, work hard and save up for your treats, then you should be spitting tacks at TARP. Henry "Hank" Paulson, the US Treasury Secretary, has a plan to spend seven hundred billion of your tax dollars (yes, $700bn!) to bail out the feckless spendthrifts who aren't like you at all.

There are only two glimmers of hope in the whole situation...

Firstly, the Troubled Assets Relief Program "TARP" might never happen. And secondly because it will be buying in a reverse auction, lowest bidder wins, it might actually make money in the long term; although I wouldn't hold my breath on that.

How much is $0.7tr anyway? Well it's twenty times what Bill Gates is worth, or perhaps you prefer to think of it as one twentieth of the entire GDP of the USA. It's about the same as the military budget, including everything: army, navy, air force and marines. Basically, it's a lot of money; a huge heap of the stuff.

And where will Hank get this cash from? Well, he'll borrow it. It's not like borrowing got us into this mess in the first place, is it?

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