Obama’s new bank plan still won’t help public

Money to banksPresident Barack Obama’s new plan to give money to banks with the promise that banks will lend the money to small business looks good on paper.

But the odds are that the banks will keep the money and it won’t find it’s way to the public.

Like the original program that was supposed to increase lending, the plan doesn’t really force the banks to funnel the money to its customers.

From The Huffington Post:

The Obama administration’s new proposal to stimulate the economy would send money to smaller banks, with the hope that they would then lend it to small businesses. But because the program would rely on incentives rather than directives, those banks could conceivably end up using the money for other things.

President Obama on Tuesday announced that $30 billion in repaid TARP money will be funneled to small- and medium-sized banks so they can increase their lending to small businesses.

But the original TARP was supposed to increase lending, too. And it didn’t.

One Response to "Obama’s new bank plan still won’t help public"

  1. woody188  February 3, 2010 at 4:14 pm

    Wouldn’t it be smarter to bypass the bankers at this point?

    Rather than lend, the bankers gave themselves $150 billion in bonuses this year. There is no evidence giving them more money will make them lend it out.

    I don’t really blame bankers for being greedy. It’s sort of their nature. But we should blame insane politicians for thinking doing the same things will end in a different result.

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