After reading a couple of diaries and comments about the evil Goldman Sachs actually making money and starting to prosper...I decided it was time to find out the answer to the age old question:
Is it good or bad for financial institutions to prosper and repay TARP funds with interest to the federal government?
So lets see what can happen:
- If financial firms payback TARP funds with interest the taxpayers get reimbursed and the deficit is lowered.
- Federal, State and Local tax receipts increase from corporate earnings as well as performance bonuses from the earnings. This can prevent more state and local layoffs and may even lead to more hiring of employees.
- Bonuses paid to employees can go to large ticket purchases that have been lagging and struggling in this economy and even re-start housing as well as vacation homes in some cases. These purchases can put people back to work and pay the commissions of real-estate agents.
- The stronger financial institutions will have more capital to lend to businesses so they can expand and hire more employees.
- The financial sector improvement can lead to higher consumer confidence due to stock market increases and other psychological market factors.
Of course these financial firms making money again, tends to make Kossacks angry as well which is a drawback...but hey with the 5 positive reasons above...I think a few pissed off Kossacks is worth an improving economic outlook....