What exactly did happen to the bailout monies while Dubya was in?

[Grandpa Troll]

So many threads here, please help old Gramps, this bailout was touted as helping stimulate the economy while keeping afloat some industries leaders.

Then I hear Citigroup got help and is now taking possession later this year of a private jet for maybe 50 million dollars??

The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France.

The bank used TARP funds to purchase a new corporate jet for executives.The decision came 24 hours after the banking giant, which was rescued by a $45 billion taxpayer lifeline, defended buying the state-of-the-art Dassault Falcon 7X -- one of nine to be flying in U.S. skies -- as a smart business deal.

The jet, the epitome of corporate prestige and privilege, can carry 12 passengers in elegant comfort.

ABC News has learned that on Monday officials of the Obama administration called Citigroup about the company's new $50 million corporate jet and told execs to "fix it."

I remember catching Barney Franks in an interview saying how secure the bailout was and then sometime later I heard him say the new part of the bailout will be better than the first part because they learned lessons from the first part, hell, it was just a couple months ago..

So did we just give money away or is it actually doing anything for the economy?

thanks for helping me explain to myself why this is a good thing?

Gramps

[DanS]

Frank is just doing to the political thing -- of course the last guy did awful and my guy will do swell. But the bailout of the banks isn't stimulative. It just ensures that we have a banking system that works. Or at least this is a down payment to making sure that the banking system works. We may need an additional bailout.

I'm afraid that the politicians have oversold the benefits of the bailout.

[OneFootInTheGrave]

I am not sure that they "oversold" more like mis-sold ...

if there was no bailoout we woud >not< have a banking system, and that would be a disaster... this is why there is a bailout, and also why we will need as much as necessary...

without car manufacturers you could go on relatively easily comparing to 50%+ of your banks being insolvent...

that's also the problem with Ron Paul's (otherwise sound) position that we should not be going more into debt to come out of this one... if you remove financial infrastructure (or simply let if fail, as well that is what happens to mis-managed companies) the society/economy at large cannot go through such an infrastructure change without severe negative consequences, so the funds are there to keep the system ticking over, and also - ie like if this plane plan came through - a lot will be wasted, but that waste is relatively small comparing to the fallout without intervention.

[Dinner]

True the bailout saved the banking sector from wide spread collapse but that doesn't mean it wasn't mismanaged. Clearly we should have put more rules in it, as the British did, and required voting shares not general shares in exchange for the capital injection. If for no other reason then when it comes time to sell those share voting shares are worth more so tax payers will recoup more of their money. Next tracking exactly how banks used these taxpayer funds should have happened but Paulson and Bush said that wasn't needed. Lastly we should have gotten assured dividends for our shares, as the British did, in order to make sure taxpayers got the most value out of their money and lastly it would have been smart to require banks to actually lend some of the money rather then just hold on to it or give it out as executive bonuses or use it to buy new corporate jets.

[OneFootInTheGrave]

there are three threads with more or less the same points... but in short - this can still get a lot worse than it looks like, but if there is a major fallout, it will be of political nature and not really fiscal (that is just underlying problem), as market is not the final driver, but politics... as long as the markets are at least functioning in some limited capacity (ie the bailout as intervention, is interfering with the markets, but not enough IMO to cause a depression, I'd say that it is easing the pain of recession at least at this point) we will be OK. But markets do not function in a vacuum, ultimately behind all this there are political/other motives, so dependable on how the cards are played the outcome could be really bad, at least the market conditions are here now which could allow for a really unsettling scenario to unfold.

If politically the markets are disturbed enough, for example if the commie Chinese drop the dollar, or the Saudis/Oil producing countries than we could have such a fallout, other than that, all other nations are in on supporting the dollar and Europe/Japan will do as long as that's at all possible, and the current trade imbalances in order to either keep the status quo, or to ease the pain of the transition... so we might be coming into an era of slow economic growth and generally getting back into a healthier distribution of trade and wealth... but if that change happens abruptly, there would be serious consequences for our societies, and not just our "jobs"...

- the bailout, and the current 700bn is just a part of the story, but it is true that accountability is not really there... it is still a lot better than the first plan that the congress refused though ... and for us in the UK... yes we are under water, but the bailout does look sensible (at least from my point of view)... it remains to be see how will it work out though...

[Patroklos]

This jet was bought long before the bailouts or collapse, not that they couldn't have canceled the order and recouped some of the money. This one jet is also supposed to replace two current older jets that are actually listed for sale right now, the total cost of which nearly covers the cost of this one.

Don't get distracted by these shiny and irrelevant propoganda stunts, it is about as stupid as the manufactured issue of the auto execs flying into Washington. There is actual mismanagement out there it just isn't as flashy or individually large and thus not of interest for politicians attempting to grandstand, but added up makes for extreme waste and inefficiency. Getting rid of that will take untold hours of humdrum accountant types pouring over mountains of mindnumbingly boring work.

[Grandpa Troll]

there are three threads with more or less the same points...

Which ones, so many thrads getting jacked by sidebars, hard to read a proper explanation

Thanks for pointing them out for me

Gramps