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| Obama admin generates $1.8 bn profit on bank bailout |
| Lalit K Jha/ PTI / Washington Jun 10, 2009, 12:27 IST |
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The billions of dollars of tax payer's money which the US President Barack Obama used to bail out almost-bankrupt banks, now appears to be a good investment, as the banks repaid $1.8 billion as their first set of loan to the federal government.
Though encouraged by the turn of events in just a few months of having taken over the reins of the United States, Obama, however, cautioned his fellow citizens that not all of the bailouts is going to be that sweet.
"While we know that we will not escape the worst financial crisis in decades without some losses to taxpayers, it's worth noting that in the first round of repayments from these companies the government has actually turned a profit," Obama said in his remarks at White House.
Obama's statement came after the Treasury Department said they are allowing 10 of the nation's biggest banks to repay $68 billion in funds which was given to them last fall at the height of the financial crisis as part of the $700 billion Troubled Asset Relief Program (TARP). The banks have paid $1.8 billion in interest on the loans.
"This is not a sign that our troubles are over — far from it," Obama, however, said. "The financial crisis this administration inherited is still creating painful challenges for businesses and families alike. And I think everybody sees it in their own individual districts. But it is a positive sign."
"We're seeing an initial return on a few of these investments. We're restoring funds to the Treasury where they'll be available to safeguard against continuing risks to financial stability. And as this money is returned, we'll see our national debt lessened by $68 billion — billions of dollars that this generation will not have to borrow and future generations will not have to repay," Obama said.
At the same time, Obama said the return of these funds does not "provide forgiveness" for past excesses or permission for future misdeeds. "It's critical that as our country emerges from this period of crisis, that we learn its lessons; that those who seek reward do not take reckless risk; that short-term gains are not pursued without regard for long-term consequences," he said.
Later in the day as many as 20 House Republicans sent a letter to the Treasury Secretary Timothy Geithner urging him to use the money to pay down the national debt. "The American taxpayer deserves to be the first one repaid on this debt," the letter said.
As the US confronts the worst recession this country has faced in generations, which has required extraordinary investments in the short term, Obama said: "Another imperative is addressing long-deferred priorities — health care, energy, education — which threaten the American economy and the well-being of American families."
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