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Archive for Saturday, December 19, 2009

$30B in bailout aid planned for small firms

December 19, 2009

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— The Obama administration is setting aside $30 billion from the financial bailout fund for a range of initiatives designed to encourage lending to small businesses to aid the economic recovery.

With the financial system stabilized, the administration will focus most of its resources from the $700 billion fund on programs to revive the job market and keep people in their homes, according to an internal document obtained by The Associated Press.

The document spells out how the Treasury Department plans to spend money from the fund before it expires in October 2010. It says $40 billion would go to new and existing programs to boost consumer and business lending.

Of that amount, $30 billion would back lending to small companies, according to a Treasury official who spoke Friday on condition of anonymity because no final decisions on the program have been made. An additional $21 billion would finish funding the administration’s troubled mortgage relief program.

Comments

jmadison 5 years ago

No mention in this story, but one must assume this money is coming from the TARP program. The Obama administration has a slush fund from which it can reward its favored few businesses. The original TARP legislation did not include provisions to dispense funds in this manner.

kansasmutt 5 years ago

Nope, it didnt. Infact the original Busch plan had NO guidelines at all to follow, just give it out and go. At least the Obama plan might keep the money from going to businesses who dont need it, but step in and grab it. Who knows at this point, but at least it might have some restriction , unlike Busch`s plan.

Flap Doodle 5 years ago

"A new analysis of the $157 billion distributed by the American Reinvestment and Recovery act, popularly known as the stimulus bill, shows that the funds were distributed without regard for what states were most in need of jobs.

“You would think that if the stimulus money was actually spent to create jobs, there would be more stimulus money spent in high unemployment states,” said Veronique de Rugy, a scholar at the Mercatus Center who produced the analysis. "But we don't find any correlation."

The Mercatus Center at George Mason University in Virginia is one of the nation's most respected economic and regulatory think tanks and has a Nobel prize-winning economist on staff. The econometric analysis was done using data provided by Recovery.gov -- the government website devoted to tracking the stimulus data -- as well as a host of other government databases.

Additionally, Mercatus found that stimulus funds were not disbursed geographically with any special regard for low-income Americans. “We find no correlation between economic indicators and stimulus funding. Preliminary results find no statistically significant effect of unemployment, median income or mean income on stimulus funds allocation,” said the report.

The Mercatus Center analysis also found that Democratic congressional districts received on average almost double the funding of Republican congressional districts. Republican congressional districts received on average $232 million in stimulus funds while Democratic districts received $439 million on average.

“We found that there is a correlation [relating to the partisanship of congressional districts],” de Rugy said. Her regression analysis found that stimulus funds are expected to decrease by 24.19 percent if a district is represented by a Republican.

“During the appropriations process, you're not surprised to see the Democrats are getting more money, but in this case a lot of the money we're looking at is going through HUD [Department of Housing and Urban Development], or Department of Education, Department of Transportation etc. and they're following a formula,” she said. “But the correlation exists, and not only does it exist -- when you look at how much money we're talking about, it's a pretty big deal.”

The analysis found that neither congressional leadership positions of local members nor presidential preference in 2008 were factors in stimulus allocation by congressional district.

Finally, the Mercatus analysis shows that a majority of the funds allocated went to public rather than private entities -- nearly $88 billion to $69 billion. While some of the money given to public entities may eventually filter down to the private sector, it's much less transparent how money given to public entities is spurring economic growth and job creation."

http://www.washingtonexaminer.com/opinion/columns/Report-Stimulus-funds-not-targeted-to-states-that-need-jobs-79530417.html

ivalueamerica 5 years ago

Bush really kicked us in the gonads one last time with his poorly written and no rules whatsoever stimulus plan.

BigPrune 5 years ago

I wonder what the Obama administration considers "small firms?" It's quite obvious almost zero net results for the taxpayers who funded this boondoggle. I just read a news article last week that said citi had modified 100,000 mortgages and like only 1700 homes were stopped from foreclosure. Of course when I google for the article it is nowhere to be found. But the guys who started google also helped fund Obama's campaign. Must be nice to control the media.

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