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TARP paybacks

December 15, 2009

When I heard that banks were beginning to repay the TARP money they recieved from the government, I was happy and positive about the economy becoming more stable. And when I heard that Obama proposed banks start lending to small businesses, I was also positive.

But then I started reading about critics who claim there isn’t a need for more loans. And while I agree that perhaps America still has a long way to go before we have completely reached a better spot than we are in now from the recession, I wonder if those critics have thought about stipends and why money is actually borrowed. It’s meant to keep the economy flowing.

The catch-22 that most bank executives will agree, and have agreed, to start lending more money to small businesses, but tell their underlings to be careful about lending to bad apples. In an economy such as we face right now, isn’t every small business a bad apple? Shouldn’t the proposals for loans and the requirements to get one be revamped for a short while to help out the small businesses who will then turn around and help re-vamp the economy?

According to, Obama has said “that banks have agreed their aren’t enough small businesses to attempt the creditworthy risks needed, but that many small businesses that are creditworthy still do not recieve the loans necessary.”

Which brings me to my next problem. The banks are only paying back their bailout money because they want less government regulation. With that bailout money, execs weren’t meant to have large Christmas bonuses, and seven figure salaries. It was meant to be placed back into the economy to keep it running.

I wonder if the banks will actually heed Obama’s call to help out, or rather just stick to the old conservative ideal that change is bad, and keep running the way they have been, not loaning anything to anyone. Is that really the way to get the economy back up to where it was? It’s hard to bring about change, and harder during a recession, but we will always remain there if something doesn’t change.

Hopefully the banks do as they say they will, and actually start lending to creditworthy businesses, or the economy won’t ever look better.

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