Burn the Bailout Money, It'd Be More Useful on Fire

Posted by Brad , Sadly, No! at 9:10 AM on December 7, 2008.

Say, how's the bailout going?

Some bailout holdings down $8 billion

Stock intended to eventually earn taxpayers a profit as part of the Bush administration's massive bank bailout has lost a third of its value -- about $8 billion -- in barely one month, according to an Associated Press analysis. Shares in virtually every bank that received federal money have remained below the prices the government negotiated.

Most of the Treasury Department's investments since late October have been in preferred bank stocks, more than $180 billion worth, with investments in giants like Citigroup and JPMorgan Chase and many small community banks. But the government also negotiated options to buy up to 1.2 billion shares of common bank stock that was valued at $27 billion.

The Treasury Department said it did not expect these common stock options to be profitable immediately and negotiated them so taxpayers could share in the wealth if the bank stocks recover.

Now, however, the value of that common stock is worth about $19 billion. If the government exercised all its warrants to purchase the stock today, it would lose money on 51 of its 53 agreements. Taxpayers would be out $7.9 billion.

Oh.

You know, it's nice that we're spending hundreds of billions of dollars to keep rich people from feeling bad about themselves, but I think I've come up with an even better plan: we take all the money left over in TARP and we set it on fire.

Just think of all the homes we could heat with that money. Imagine how much better this country would be if we converted all our cars to run on currency. After all, could there be any greener fuel than cold, hard cash?

I'm not saying this solution would be perfect -- I mean, burning $350 billion of our money supply doesn't sound like a healthy way to grow an economy -- but it's better than what we're doing now.

UPDATE: Alternatively, we could just use the money to prop up a pile of worthless shit and tell people that it's the most valuable commodity in the world. Since the late '90s, our economy has run entirely on this principle (e.g., that mortgage derivatives and pets.com shares would keep growing in value forever), and I see no reason to change that now. List your ideas for worthless commodities that we can use taxpayer dollars to prop up in the comments. My vote goes to...

...Pogs!

...the person in the comments who suggested Beanie Babies has the right idea. This could be balanced out by reviving the Furby as well.

UPDATE II: Atrios tells me that:

Just under 10 percent of all mortgages are delinquent or in foreclosure.

My solution: Let people get kicked out of their homes. We can then move them into new apartment complexes constructed entirely from Pogs. Nothing could possibly go wrong.

Gavin Adds: And there's also the shocking unemployment news today, sure.

See, everyone's getting so excited, but this is just one of those high-spirited George W. Bush practical jokes that we've come so well to appreciate.

Remember when he got to the White House, and his people made up a story that the Clintons had trashed the place, removing 'W' keys from the keyboards and writing on the bathroom walls and all that? That was a good one!

Now with the $8.5 trillion in bailouts, when Obama gets to the White House, all the money will be gone from the U.S. Treasury and stuffed into the pockets of the same arrogant bubbleheads responsible for cratering the economy, who will then squander it in shortsighted and selfish ways designed to give each of them a short-term advantage over their competitors, in effect taking a leaf blower to it all and blowing it into a giant, blazing fireplace of Fail -- after which everyone will agree to act surprised.

It'll be like, "Here's your U.S. government, Mr. Obama. We took the dollar signs off the keyboards."

Tagged as: economy, money, economic crisis, bailout, economic meltdown

Brad is a regular blogger for Sadly No!.