Barry Sussman: Scratch the Big Bonuses and Turn Them Over to Borrowers?
Posted at 5:56 pm, February 2nd, 2010
As an old assignment editor I’m used to asking questions and not being embarrassed if they expose me as naïve or wrong minded, because sometimes there’s a good story lurking. So here are a few simple questions. The biggest financial institutions are said to be on the verge of issuing $145 billion in bonuses. My questions:
Q. Suppose no bonuses are issued: What happens to that $145 billion, or whatever the figure is? Do the banks and brokerages keep it? What would they do with it?
Q. Could the banks and brokers use that money to reduce charges to borrowers and clients? Would there be any reason not to do that? And, if they did – how much might an average bank borrower or brokerage client save?
Q. Or maybe the $145 billion could be made available for new loans? If the average loan is $200,000 or $300,000 for a home mortgage, by my arithmetic that comes to between 480,000 and 775,000 new mortgages if the bonuses are reduced to zero. (That’s just my simple arithmetic—dividing $200,000 and $300,000 into $145 billion. There may be hidden charges and other hookers involved that I’m not including. Regardless, we could be talking about putting those bonuses to work for a lot of people.)
President Obama is talking about taxing the big financial institutions to recover “every single dime the American people are owed” for bailing them out. That’s one way of dealing with the problem. I haven’t seen the idea of turning the money directly into cuts in fees or new mortgages discussed. Should it be?
February 4th, 2010 at 2:29 pm |
The 145 billion dollars is the taxpayers money, as would the taxes Obama want’s to levy against the financial institutions who are currently stealing our money. They are stealing it by borrowing it from the Feds at 0% interest, and then buying treasury bonds that pay 3% interest, that’s why there isn’t any money for new homes or to upgrade or expand businesses. Why would banks make a 30 year loan at 5% to someone, when they can get a risk free profit of 3% from the feds?
Any money that the banks make should go into paying back their debts first, and that includes their debt to the American people. If Obama tries to get our money back by levying taxes against them, they will just pass those taxes on to their users. The guys on top are never going to pay their fair share, and we all know it. They’ll declare record profits, pocket huge bonuses, then run before anyone knows that they are insolvent.