Wednesday, October 15, 2008

Now that we Own the Banks,...

We, the American taxpayers, are now part owner of America’s leading banks. So, when can we expect to receive dividends from our investment?

The answer is very soon, but in the form of new taxes, not a check or electronic deposit. After all, somebody has to pay for the extra hundreds of billions of dollars that are being deployed to save the financial system. When and if our shares, of which the Treasury is temporarily trustee, are sold, hopefully for a profit, it is likely that Congress will find it more constructive to spend the money on new or existing programs than return it to us. That’s what they do with surplus Social Security taxes.

The constant refrain that the government is looking out for the taxpayer in administering the $700 billion appropriated by Congress will, in all probability, turn out to be a will-o’-the-wisp.

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