Bank of America announced in a surprise move it would pay back Uncle Sam (the taxpayer) the $45 billion in federal bailout money loaned to them under the federal TARP program, that according to a report out of the Associated Press. Also reported, Bank of America said it raised $19.29 billion from a securities offering that , along with cash would be used to repay the money. The action when completed will free Bank of America from limits on executive compensations and other government restrictions.
There is more good news for Uncle Sam. The Bank of America has paid $2.54 billion to the government so far in dividends on the TARP money. The government also received "warrants" in return for the bailout and could receive between $943 million or $2.5 billion for the "warrants" when repurchased by Bank of America the report also stated.
What is most important is that the federal government put this and future TARP money payback to good use and start balancing the federal budget and not create one more penny of debt. We have enough of that and now is the time to start putting our fiscal house back in order. Our economic future will be bright once again if we have the courage to take a stand on the issue.
The payback is proof once again the federal government can do things right with the correct approach and safe guards and the best safe guard is for the people to be involved and let their voices be known. The key is Presidential leadership with the courage to change the status quo. There is some good economic news out there, not much, but more than there has been and that is positive. With the right leadership from the President, any problems can be met head on and taken care of. Government itself is only a problem when elected officials make it so. That is not our destiny but our fate and as the first civilization and its people knew 5000 years ago we can change our fate at any time. It just takes leadership and courage to do so.
Note 1: I reported on destiny and fate in a commentary dated 12/31/08 titled "The U.S., Past, Present and Future.
