Bailout nation continues. Over at the Washington Examiner, Byron York writes up Barney Frank’s plan to spend dividends from TARP before the taxpayers can get their grubby hands on them. The idea was that bailed-out financial institutions would hand over shares of preferred stock that paid a dividend for the government in exchange for the TARP money. If the dividends were paid promptly and the institutions repaid the TARP funds, it would theoretically be possible for the federal government to turn a profit.
According to the GAO, the federal government has received over $6 billion dividends payments through June 12. Under the original TARP legislation, such money was supposed to be used to pay down the debt. Under Barney Frank’s “TARP for Main Street Act of 2009,” it will instead go to Democratic housing programs and community activists, potentially including ACORN — bad ideas that will get worse if bailout recipients increasingly don’t pay dividends or repay the TARP funds themselves.