“We want our Money Back”

How many times have you heard President Obama utter these words? For me, it has been 200 times too many. What irritates me is that he says this and he either doesn’t know the facts or refuses to accept them. Consider the excerpt from the most recent Treasury report on the TARP Capital Purchase Program.


To date, the disposition of warrants has succeeded in significantly increasing taxpayer returns on the TARP preferred investments that have been repaid by Banks. As of December 31, 2009, Treasury has received $4 billion in gross proceeds on the disposition of warrants in 34 banks, consisting of (i) $2.9 billion from repurchases by the issuers at agreed upon fair market values and (ii) $1.1 billion from auctions.1 For those 34 institutions, Treasury received an absolute return of 3.1% from dividends and an added 5.7% return from the sale of the warrants for a total absolute return of 8.8%.

Did anyone you know earn 8.8% on any investment last year? Do you know of any other government program that actually makes money for the taxpayer?

Did President Obama not read the report that Treasury created? Is he not aware of what is happening in his own administration? Or does he just like to bully the banks?

Now let’s look at who received TARP funds:

As you can see from the chart below TARP funds were given to not only banks, but also to AIG, GM, GMAC, Discover and oddly enough the suppliers to GM. As you can see almost half of the TARP funds were given to non-banks (47%). Of the $191 billion given to the banks, $149 billion has already been repaid. In other words 78% of the money given to banks under the TARP program has already been repaid. In contrast, none of the money has been paid back from AIG or any of the auto companies.

I think it is right for President Obama to ask for his money back, he just needs to ask the right people. Let’s not be beating on the banks to return the TARP money until we see at least 75% of the funds returned from these non-bank entities that should have never received TARP funds in the first place.

Make Savings Automatic

Many American Families Don’t Have Savings Accounts

 

The latest Federal Reserve Board Survey of Consumer Finances data, revealed that most low and moderate income households don’t have savings accounts:

• 68% of low-income households (incomes below $18,900) – don’t have a savings or money market account.
• 52% of moderate-income households (incomes $18,900 -$33,899) – don’t have a savings or money market account.
•  42% of middle-income households (incomes $33,899 - $53,599) don’t have a savings or money market account. 
• Only 20% of upper-income households income of $89,300+ don’t have an account.

 Kind of hard to be a saver if you don't have a savings.  If you don't have a savings account, now would be the perfect time to set one up and if you are getting a tax refund, have the refund directly deposited into your new savings to give you a nice jump start.  

 

A nationwide survey this month showed that a large majority of Americans (83%) believe that the most effective way to build up personal savings balances is to automatically transfer funds from a paycheck or from checking to savings. 

  

While many consumers believe in this systematic approach to savings, most don't actually have these systematic transfers set up for themselves.  Setting up a systematic savings transfers is really easy.  You can have money directly deposited to your savings account right from your paycheck or with most online banking programs you can just set up a transfer yourself.  With online banking you decide the amount and frequency of these transfers and can easily adjustment instantly.  The key is to make sure they happen automatically.  If you don't see it you won't spend it.

   

Next week is America Saves Week, and the message you will be hearing from many Banks and consumer groups is “Make Savings Automatic”.   Why not make it a point to set up a automatic deposit from your payroll or a transfer from your checking into a savings account ever pay period.  You will be amazed at how quickly the dollars will add up.  You owe it to yourself to "Pay Yourself First" and "Make Savings Automatic.".

 

 

 America Saves Week

 

 

A Billion, it's Nothing . . . Or Is It?

How many zeros in a billion?  We have become desensitized to these large numbers and I thought it would help to put them in perspective.  We are only talking about billions, yet our government is throwing around trillions of dollars, so just imagine how much more horrifying this would be if we looked at trillions instead of billions.

The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spending YOUR tax money. A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of its releases…  

• A billion seconds ago it was 1959
• A billion minutes ago Jesus was alive
• A billion hours ago our ancestors were living in the Stone Age
• A billion days ago no one walked on the earth on two feet

A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.

  

While this thought is still fresh in our brain, let's take a look at real life example.  After hurrican Katrina, Louisiana Senator Mary Landrieu (D) requested Congress for 250 BILLION DOLLARS to rebuild New Orleans.  Interesting number....what does it mean?  Let's examine it by doing some simple division:

• Well... if you are one of the 484,674 residents of New Orleans (every man, woman, and child) you would get $516,528.
• Or... if you have one of the 188,251 homes in New Orleans, your household would get $1,329,787.
• Or... if you are a family of four... your family would get $2,066,012.

Are you serious?  Washington, D.C., HELLO! Are all your calculators broken??  Wouldn't we have been much better off just offering $250,000 to each household and have them repair/rebuild their homes by employing workers in the local market?  Think of the multiplier effect of doing that!!

We need sanity back in government, and the realization that "We the People" , not the government, are the solution to our problems.