According to the WSJ, the White House is considering using unspent TARP funds to lower the deficit. Huh?
Bear with me, I'm a linguist and not a math guy. So Obama took out a loan to keep the economy from crashing. Now he's using part of that loan to pay down our debt. How is that debt reduction?
Take someone who wants to lose a few pounds. They put a piece of cake on their plate. Then later they decide not to eat the cake. Are they losing weight?
Smoke and mirrors.
Here's the story:
http://online.wsj.com/article/SB1257...IDDLTopStories
WASHINGTON -- The Obama administration, under pressure to show it is serious about tackling the budget deficit, is seizing on an unusual target to showcase fiscal responsibility: the $700 billion financial rescue.
The administration wants to keep some of the unspent funds available for emergencies, but is considering setting aside a chunk for debt reduction, according to people familiar with the matter. It is also expected to lower the projected long-term cost of the program -- the amount it expects to lose -- to as little as $200 billion from $341 billion estimated in August.
The idea is still a matter of debate within the administration and it is unclear how much impact it would have on the nation's mounting deficit levels. Still, the potential move illustrates how the Obama administration is trying to find any way it can to bring down
the deficit, which
is turning into a political as well as an economic
liability.
On the $700 billion Troubled Asset Relief Program,
the administration is considering a change that may appear to improve the fiscal situation. Agreeing not to spend a certain amount of TARP money will enable the White House, in its budget projections, to assume less money out the door and, therefore, less debt issued. The move would also reduce the deficit by an unknown amount since a certain level of spending and borrowing is already factored into estimated future deficits.
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